The DCIT(OSD), Ahmedabad Range-1, Ahmedabad V. Banyan Chemicals Pvt.Ltd., Ahmedabad

ITA 240/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8669 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-03-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 12-01-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Keywords: Business income
• Section: 271(1)(c); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING: 24.03.10 DRAFTED ON: 24.03.10 ITA NO.240/AHD/2007 ASSESSMENT YEAR : 2001-2002 DCIT(OSD), RANGE-1, 3 RD FLOOR, JITENDRA CHAMBERS, R.B.I. LANE, ASHRAM ROAD, AHMEDABAD VS. BANYAN CHEMICALS LTD. ZYDUS TOWER, SATELLITE CROSS ROAD, S.G.HIGHWAY, AHMEDABAD. PAN/GIR NO. : AAACB 8545 N (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI M.C.PANDIT SR.DR RESPONDENT BY: NONE O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-V, AHMEDABAD, DATED 18.10.2006. 2. THE ONLY GROUND OF THE APPEAL OF THE REVENUE REA DS AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN LAW AND ON FACTS IN CANCELING THE PENALTY LEVIED U/S.271(1)(C) OF RS.2,10,339/-. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAD DECIDED THIS ISSUE AS UNDER:- IN THIS CASE ASSESSMENT WAS COMPLETED DETERMINING TOTAL INCOME OF RS.24,57,075/- AS AGAINST RETURNED INCOME OF RS. - 2 - 3,44,630/-. ASSESSEE WENT IN APPEAL AND AFTER APPEA L, TOTAL INCOME WAS DETERMINED AT RS. 8,76,460/-. THE DISALL OWANCE WHICH WAS CONFIRMED WAS ON ACCOUNT OF EXCESS CLAIM OF EXEMPTION U/S.10B OF THE ACT. AFTER CONSIDERING REP LY OF THE ASSESSEE , THE ASSESSING OFFICER LEVIED A PENALTY O F RS.2,10,239/-. 4. CHALLENGING THE LEVY OF PENALTY, THE ID. AUTHORI SED REPRESENTATIVE STATED THAT THOUGH THE ASSESSING OFF ICER HAD RESTRICTED THE CLAIM OF THE ASSESSEE U/S. 10B, BUT IT WOULD BE RELEVANT TO NOTE THAT ASSESSEE OH ITS OWN HAD POINT ED OUT THIS FACT VIDE LETTER DTD. 12.11.2002 ADDRESSED TO THE I TO, WARD- L(L), BARODA WITH WHOM THE CASE WAS BEING ASSESSED AT THE RELEVANT TIME. HE POINTED OUT THAT IT WOULD BE RELE VANT TO GO THROUGH THE REPLY GIVEN TO THE SHOW CAUSE NOTICE BE FORE LEVY OF PENALTY IN WHICH IT WAS POINTED OUT THAT ASSESSEE H AD VOLUNTARILY AND BEFORE INITIATION OF ASSESSMENT PRO CEEDINGS ITSELF HAD WRITTEN THIS LETTER POINTING OUT THAT EX CESS CLAIM IS BEING WITHDRAWN. IT WAS THEREFORE ARGUED THAT THIS WAS NOT A CASE WHERE PENALTY SHOULD HAVE BEEN LEVIED. IN VIEW OF THESE FACTS, IT WAS REQUIRED THAT COPY O F THAT LETTER SHOULD BE OBTAINED FROM THE ASSESSING OFFICER TO EX AMINE WHETHER THAT LETTER WAS FILED WITH THE ASSESSING OF FICER OR NOT. VIDE LETTER DTD. 10/10/2006, DY. CIT, AHMEDABAD CIR CLE-1, AHMEDABAD HAS SENT A COPY OF THAT LETTER WHICH WAS RECEIVED IN THE ASSESSING OFFICER'S OFFICE ON 12/11/2002. RELE VANT PORTION OF THAT LETTER IS AS UNDER: 'WE HAD FURNISHED OUT' INCOME-TAX RETURN ON 31/10/2001 VIDE ACKNOWLEDGEMENT NO. 00876 DECLAR ING TOTAL INCOME OF RS.3,44,630/-. IN OUR RETURN OF INCOME, WE BEING 100% EOU, HAD CLA IMED THE ENTIRE BUSINESS INCOME OF RS.2,43,95,626/- AS EXEMP T U/S.10B OF THE INCOME-TAX ACT. THE SAID BUSINESS INCOME HAS BEEN DERIVED FROM EXPORTS AS WELL AS LOCAL SALE OF GOODS MANUFACTURED BY US, AS UNDER: SR. NO. PARTICULARS RS. 1 EX PORT TURNOVER 4,06,60,622 - 3 - 2 LOCAL TURNOVER 13,21,835 3 TOTAL TURNOVER AS PER P&L ACCOUNT 4,19,82,457 4 BUSINESS INCOME AS PER RETURN 2,43,95,626 5 PROFITS DERIVED: (A)ON LOCAL SALES (PROPORTIONATE ) (4X 2/3) 7,68,123 (B) ON EXPORTS (BALANCE) (4-5(A)) 2,36,27520 TOTAL 2,43,95,626 WHILE PREPARING OUR RETURN OF INCOME WE LOST SIGHT OF AMENDMENT IN SEC. 10B WHICH CAME TO BE APPLICABLE F ROM A.Y. 2001-02, BY WAY OF INSERTION SUB-SEC.(4) WHICH PROV IDED THAT WHAT IS ELIGIBLE U/S.10B WOULD BE THE AMOUNT WHICH BEARS TO THE BUSINESS INCOME OF THE EOU, THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE EOU. BY VIRTUE OF THIS AMENDMENT, WE WERE SUPPOSED TO HAVE CLAIMED EXEMPTION U/S.10B OF RS.2,36,27,520/- BEING PROFIT DERIVED FROM EXPORTS AS AGAINST RS.2,43,95,626/- CLAIMED IN THE RETURN. AS SUCH, WE HAVE INADVERTENTLY CLAIMED EXCESS EXEMPTION U/S.10B BY RS.7,68,106/-. WE HAVE THEREFORE, TO REQUEST YOUR GOOD SELF TO KIN DLY TAKE INTO CONSIDERATION THE ABOVE INADVERTENT MISTAKE WHILE F INALIZING THE ASSESSMENT IN OUR CASE.' 5. THE ABOVE SHOWS THAT IN THIS CASE, THE ASSESSEE HAD VOLUNTARILY SENT THIS LETTER TO THE ASSESSING OFFIC ER POINTING OUT THAT BY MISTAKE THE CLAIM OF DEDUCTION U/S.10B WAS MADE AND WHICH NEEDS TO BE CORRECTED. IT WOULD ALSO BE RELEV ANT TO NOTE THAT THIS FACT WAS POINTED OUT TO THE ASSESSING OFF ICER, IN RESPONSE TO THE SHOW CAUSE NOTICE WHICH WAS ISSUED BEFORE LEVYING PENALTY. IN FACT IN THAT LETTER THE ENTIRE CONTENTS OF THE LETTER WAS REPRODUCED BY THE ASSESSEE. IN NUTSHELL, IT IS CLEAR THAT CLAIM U/S, 10B WHICH WAS WITHDRAWN BY THE ASSE SSING OFFICER DURING THE COURSE OF ASSESSMENT ALREADY WIT HDRAWN - 4 - VOLUNTARILY BY THE ASSESSEE VIDE ITS LETTER DATED. 12/11/2002, WHICH WAS BEFORE THE INITIATION OF ASSESSMENT PROCE EDINGS, IN THIS CASE. THEREFORE, IT CANNOT BE SAID THAT THE AS SESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME SO THAT ANY PENALTY COULD BE LEVIED. IN VIEW OF THE ABOVE, PENALTY LEVI ED BY THE ASSESSING OFFICER IS CANCELLED. 3. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE HAS FILED AN ADJOURNMENT APPLICATION WHICH WAS REJECTED BY THE BENCH AS THE REASON FOR SEEKING ADJOURNMENT WERE NOT FOUND T O BE PLAUSIBLE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED O N THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE O N RECORD. IN THE INSTANT CASE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT BY THE LEARNED ASSESSING OFFICER OF RS2,10,339/- WAS DELET ED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BY OBSE RVING AS UNDER :- 5. THE ABOVE SHOWS THAT IN THIS CASE, THE ASSESSEE HAD VOLUNTARILY SENT THIS LETTER TO THE ASSESSING OFFIC ER POINTING OUT THAT BY MISTAKE THE CLAIM OF DEDUCTION U/S.10B WAS MADE AND WHICH NEEDS TO BE CORRECTED. IT WOULD ALSO BE RELEV ANT TO NOTE THAT THIS FACT WAS POINTED OUT TO THE ASSESSING OFF ICER, IN RESPONSE TO THE SHOW CAUSE NOTICE WHICH WAS ISSUED BEFORE LEVYING PENALTY. IN FACT IN THAT LETTER THE ENTIRE CONTENTS OF THE LETTER WAS REPRODUCED BY THE ASSESSEE. IN NUTSHELL, IT IS CLEAR THAT CLAIM U/S, 10B WHICH WAS WITHDRAWN BY THE ASSE SSING OFFICER DURING THE COURSE OF ASSESSMENT ALREADY WIT HDRAWN VOLUNTARILY BY THE ASSESSEE VIDE ITS LETTER DATED. 12/11/2002, WHICH WAS BEFORE THE INITIATION OF ASSESSMENT PROCE EDINGS, IN THIS CASE. THEREFORE, IT CANNOT BE SAID THAT THE AS SESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME SO THAT ANY PENALTY - 5 - COULD BE LEVIED. IN VIEW OF THE ABOVE, PENALTY LEVI ED BY THE ASSESSING OFFICER IS CANCELLED. 6. BEFORE US, IT WAS ADMITTED BY THE LEARNED DEPART MENTAL REPRESENTATIVE THAT DIFFERENCE BETWEEN THE RETURNED INCOME AND FINALLY ASSESSED INCOME WAS ON ACCOUNT OF LESSER GR ANT OF DEDUCTION UNDER SECTION 10B AT RS.1,48,66,127/- IN PLACE OF R S.1,53,97,955/- CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME. WE FIND THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS OBS ERVED THAT THE ABOVE EXCESS CLAIM OF DEDUCTION UNDER SECTION 1 0B WAS VOLUNTARILY WITHDRAWN BY THE ASSESSEE BY ITS LETTER WRITTEN TO THE LEARNED ASSESSING OFFICER PRIOR TO THE COMMENCEMENT OF ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION AND TH E ASSESSEE HAS SATISFACTORILY EXPLAINED THE REASON FOR EXCESS CLAI M OF DEDUCTION IN THE RETURN OF INCOME. WE FIND THAT NO ERROR IN THE ORDER ABOVE OBSERVATION OF THE LEARNED COMMISSIONER OF INCOME T AX(APPEALS) COULD BE POINTED OUT BY THE LEARNED DEPARTMENTAL RE PRESENTATIVE. IN THE CIRCUMSTANCES, WE FIND NO MERIT IN THIS APPEAL OF THE REVENUE AND ACCORDINGLY THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 26/03/2010. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTA NT MEMBER AHMEDABAD; DATED 26/03/2010 PREPARED AND COMPARED BY : PARAS - 6 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD