The ITO, Wrd-4(2), Ahmedabad V. Johnson Screen (I) Pvt.Ltd., Ahmedabad

ITA 2428/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0465 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-11-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 05-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S BENUPANI
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Business income
• Section: 271(1)(c); 80HHC; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI H.L. KARWA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING:4.11.2009 DRAFTED ON:11-11-2 009 ITA NO.1344/AHD/2006 ASSESSMENT YEAR : 2003-2004 JOHNSON SCREEN (I) LTD. 5/B, RASHMI SOCIETY, MITHAKHALI CIRCLE, NAVRANGPURA, AHMEDABAD. VS. INCOME TAX OFFICER, WARD-4(2), AHMEDABAD. PAN/GIR NO. : AACFJ 1310 Q (APPELLANT) .. (RESPONDENT) ITA NO.2428/AHD/2007 ASSESSMENT YEAR : 2003-2004 INCOME TAX OFFICER, WARD-4(2), AHMEDABAD. VS. JOHNSON SCREEN (I) LTD. 5/B, RASHMI SOCIETY, MITHAKHALI CIRCLE, NAVRANGPURA, AHMEDABAD. PAN/GIR NO. : AACFJ 1310 Q (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI D.S.BENUPANI CIT D.R. RESPONDENT BY: SHRI MEHUL K. PATEL O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-VIII, AHMEDABAD DATED 02.03.2006 IN APPEAL NO.CIT(A)-VIII/4(2)/068/05-06, AND ORDER DATED 16.0 3.2007 IN APPEAL NO.CIT(A)- VIII/ITO/4(2)/240/06-07. ITA NO.1344/AHD/2006 2. THE GROUND NOS.1 AND 2 OF THE APPEAL READS AS UN DER: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LEARNED AS SESSING OFFICER IN ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 2 - REDUCING THE CLAIM OF DEDUCTION UNDER SECTION 80IA TO RS.1,28,01,093/- AS AGAINST DEDUCTION CLAIMED BY THE APPELLANT UNDER SE CTION 80IA AT RS.1,30,00,252/-. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN UPHOLDING THE ACTION OF THE LEARNED ASS ESSING OFFICER IN EXCLUDING THE INTEREST OF RS.23,93,712/- FROM THE P ROFITS OF THE BUSINESS FOR THE PURPOSE OF WORKING OUT THE ELIGIBLE PROFITS FOR ALLOWING DEDUCTION UNDER SECTION 80IA OF THE ACT, ON THE GROUND THAT INTERES T INCOME IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN UPHOLDING THE ACTION OF THE A.O. IN REDUCING THE AM OUNT OF DEDUCTION UNDER SECTION 80HHC TO RS.9,87,715/- AS AGAINST THE DEDUC TION CLAIMED BY THE APPELLANT AT RS.17,29,848/-. 3. SINCE THE FACTS AND ISSUE INVOLVED IN THE ABOVE GROUNDS OF APPEAL ARE COMMON, THEY ARE BEING CONSIDERED AND DECIDED TOGET HER AS UNDER. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ON VERI FICATION OF THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80HHC, IT WAS OBSERVED BY THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE CLAIMED PROFIT OF THE BUSINESS AT RS.4,50,64,022/-. ON SCRUTINY OF PROFIT & LOSS ACCO UNT, IT WAS OBSERVED THAT IT WAS INCLUSIVE OF OTHER INCOME. THE ASSESSEE WAS ASKED T O FURNISH DETAILS OF OTHER INCOME, IN RESPONSE TO THE SAME, THE ASSESSEE EXPLA INED THAT OTHER INCOME INCLUDED SCRAP SALES AT RS.9,69,415/- AND INTEREST INCOME OF RS.23,93,712/-. THE LEARNED ASSESSING OFFICER FOUND THAT THE INTEREST IS EARNED BY THE ASSESSEE BY USING ITS SURPLUS FUNDS IN FORM OF INTER CORPORATE DEPOSITS A ND FIXED DEPOSIT WITH BANK AND THEREFORE, IN HIS VIEW, INTEREST INCOME EARNED BY T HE APPELLANT DOES NOT FORM PART OF PROFIT OF THE BUSINESS. THE SAME IS REQUIRED TO BE EXCLUDED FROM THE PROFIT AND GAINS OF BUSINESS BEING INCOME FROM OTHER SOURCES. RELIAN CE WAS PLACED ON THE FOLLOWING DECISION: (A) K.S.SUBBUAH OILAI & CO. PVT. LTD. 260 ITR 304 ( MAD) (B) A.S.NIZAR AHMED & CO. 259 ITR 244 (MADRAS) (C) K. RAVINDRANATHAN NAIR 262 ITR 669 (KERALA) (D) JAWAHARLAL GUPTA 263 ITR 10 (KERALA) ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 3 - THE LEARNED ASSESSING OFFICER ALSO MENTIONED THAT T HE SUPREME COURT HAS DISMISSED THE SLP AGAINST THE JUDGEMENT DATED 13.02 .2003 AND 17.02.2003 OF KERALA HIGH COURT IN ITA NO.14 AND 16 OF 2003 IN TH E CASE OF SOUTHERN CASHEW EXPORTS VS. DCIT (264 ITR 142) WHEREIN THE HIGH COU RT BY FOLLOWING DECISIONS REPORTED IN 243 ITR 192, 253 ITR 553 AND 253 ITR 3 19 HAD DISMISSED ASSESSEES APPEAL HOLDING THAT INCOME DERIVED FROM DEPOSITS MA DE WITH BANK WAS NOT ENTITLED TO RELIEF UNDER SECTION 80HHC. THEREFORE, THE LEARN ED ASSESSING OFFICER EXCLUDED THE INTEREST PORTION FROM THE PROFIT UNDER THE HEAD PROFIT AND GAINS AND REDUCED THE PROFIT OF THE BUSINESS BY RS.23,93,712/- WHILE COMP UTING THE DEDUCTION UNDER SECTION 80HHC AND 80IA OF THE ACT. IN APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE ORDER OF LEARNED ASSESSING OFFICER. 5. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT IN PRINCIPAL DEDUCTION UNDER SECTION 80IA AND 80HHC SH OULD NOT BE ALLOWED TO THE ASSESSEE. HE FURTHER SUBMITTED THAT THE LEARNED ASS ESSING OFFICER HAS NOT ASSESSED THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHE R SOURCES IN THE COMPUTATION OF INCOME IN THE ASSESSMENT ORDER AND THEREFORE, FOLLO WING THE DECISION OF HON'BLE HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TA X VS. SHRI RAM HONDA POWER EQUIP & OTHERS. (2007) 289 ITR 475 (DEL) NETT ING OFF OF INTEREST INCOME WITH INTEREST EXPENDITURE SHOULD BE ALLOWED TO THE ASSESSEE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTE D THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE LEARNED ASSESSING OFFICER OBSERVED THAT INTEREST INCOME OF RS.23,93,712/- EARNED BY THE ASSESSEE WAS OUT OF INVESTMENT MADE IN FDR AND INTE R-CORPORATE DEPOSITS OUT OF SURPLUS FUNDS. THE LEARNED ASSESSING OFFICER THEREF ORE, VIEWED THAT SUCH INTEREST INCOME WAS NEITHER INCOME DERIVED FROM INDUSTRIAL U NDERTAKING NOR BUSINESS ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 4 - INCOME BUT WAS INCOME ASSESSABLE UNDER THE HEAD OTH ER SOURCES. THEREFORE, DEDUCTIONS UNDER SECTION 80HHC AND 80IA WAS ALLOWED BY EXCLUDING THE SAID INTEREST INCOME. THE LEARNED AUTHORISED REPRESENTAT IVE OF THE ASSESSEE POINTED OUT FROM THE COMPUTATION MADE BY THE LEARNED ASSESS ING OFFICER IN THE ORDER OF ASSESSMENT THAT INTEREST INCOME WAS NOT SEPARATELY ASSESSED BY HIM UNDER THE HEAD INCOME FROM OTHER SOURCES AND THEREFORE, NETTING OF F OF INTEREST EXPENDITURE SHOULD BE ALLOWED. WE FIND THAT THE ORDER OF THE LEARNED A SSESSING OFFICER READS AS UNDER: 4. FURTHER, THE AMOUNT OF PROFIT OF THE BUSINESS W AS ALSO MODIFIED AND EXCLUDED INTEREST INCOME AT RS.23,93,712/-. THE INT EREST INCOME EARNED BY THE ASSESSEE DOES NOT FORM PART OF PROFIT AT THE BU SINESS. THE INTEREST IS EARNED BY THE ASSESSEE BY USING ITS SURPLUS FUNDS I N FORM OF INTER CORPORATE DEPOSITS AND FIXED DEPOSITS. THE SAME IS REQUIRED T O BE EXCLUDED FROM PROFIT AND GAIN OF BUSINESS BEING INCOME FROM OTHER SOURCE S. THIS ISSUE HAS BEEN DECIDED IN THE FOLLOWING CASES. 1. K.S.SUBBUAH OILAI & CO. PVT. LTD. 260 ITR 304 (M AD) 2. A.S.NIZAR AHMED & CO. 259 ITR 244 (MADRAS) 3. K. RAVINDRANATHAN NAIR 262 ITR 669 (KERALA) 4. JAWAHARLAL GUPTA 263 ITR 10 (KERALA) EVEN THE SUPREME COURT HAS DISMISSED SLP AGAINST T HE JUDGEMENT DATED 13/2/2003 & 17/02/2003 OF KERALA HIGH COURT I N ITA NO.14 & 16 OF 2003 IN THE CASE OF SOUTHERN CASHEW EXPORT V/S. DCI T WHERE IN THE HIGH COURT BY FOLLOWING DECISIONS REPORTED IN 243 ITR 19 2, 253 ITR 553, 253 ITR 319 HAD DISMISSED ASSESSEES APPEAL HOLDING THAT IN COME DERIVED FROM DEPOSITS MADE WITH BANK WAS NOT ENTITLED TO THE REL IEF U/S. 80HHC SOUTHERN CASHEW EXPORT V/S. DCIT SLP NO.15119-20 OF 2003 (26 4 ITR 142). IN VIEW OF THE ABOVE INTEREST IS EXCLUDED FROM THE PROFIT UNDER THE HEAD PROFIT & GAIN. THE PROFIT OF BUSINESS IS REDUC ED BY RS.23,93,712/-. FURTHER, THE ASSESSEE CLAIM FOR DEDUCTION UNDER SEC TION 80IA OF RS.1,30,00,253/- IS ALSO REVISED AS RS.1,28,01,093/ -. THUS, AMOUNT OF PROFIT OF BUSINESS FOR THE PURPOSE OF DEDUCTION U/S.80HHC WAS ALSO MODIFIED AS RS.2,98,69,217/- & CONSEQUENTLY, DEDUCTION U/S. 80H HC WAS ALSO REWORKED AS RS.9,87,715/-. 8. IN OUR CONSIDERED VIEW, IN READING AN ORDER OR A NY OTHER DOCUMENT EMPHASES SHOULD BE GIVEN TO SUBSTANCE OVER FORM. IN THE INST ANT CASE, IT IS OBSERVED THAT LEARNED ASSESSING OFFICER HAS CATEGORICALLY HELD IN THE ORDER OF ASSESSMENT THAT INTEREST INCOME EARNED BY THE ASSESSEE IS ASSESSABL E UNDER THE HEAD INCOME FROM ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 5 - OTHER SOURCES. SIMPLY BECAUSE, THERE IS A MISTAKE I N THE PRESENTATION OF COMPUTATION, IT CANNOT BE HELD THAT THE LEARNED ASS ESSING OFFICER HAS NOT HELD THAT INTEREST INCOME WAS NOT ASSESSABLE UNDER THE HEAD I NCOME FROM OTHER SOURCES. WE FURTHER FIND THAT THE ASSESSEE HAS NOT CHALLENGED O R DISPUTED THE FINDING OF THE LEARNED ASSESSING OFFICER THAT INVESTMENT IN FDR AN D INTER-CORPORATE DEPOSITS WERE MADE OUT OF SURPLUS FUNDS. THE ASSESSEE HAS A LSO BROUGHT NO MATERIAL BEFORE US TO SHOW THAT ANY INTEREST BEARING BORROWED FUNDS WERE UTILISED FOR EARNING THE INTEREST INCOME. THUS, IT IS NOT THE CASE OF THE AS SESSEE THAT ANY INTEREST EXPENDITURE WAS INCURRED FOR EARNING INTEREST INCOME. IN THE AB OVE CIRCUMSTANCES, WE DO NOT FIND FORCE IN THIS GROUND OF APPEAL OF THE ASSESSEE WHICH IS DISMISSED. 9. GROUND NO.4 OF THE APPEAL READS AS UNDER: 4.0. THE LEARNED COMMISSIONER OF INCOME TAX(APPEAL S) ERRED IN UPHOLDING THE ADJUSTMENTS CARRIED OUT BY THE A.O. T O THE TOTAL TURNOVER AND THE PROFITS OF THE BUSINESS WHILE WORK ING OUT DEDUCTION UNDER SECTION 80HHC OF THE ACT BECAUSE ACCORDING TO HIM THE PROVISIONS OF SECTION 145A WERE CORRECTLY INVOKED B Y THE A.O. 10. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE HAS DISCLOSED TOTAL TURNOVER OF RS.15,15,1 0,699/- IN THE CERTIFICATE IN FORM NO.10CCAC FILED ALONGWITH RETURN OF INCOME. THE ABO VE AMOUNT DID NOT INCLUDE SALES TAX AMOUNTING TO RS.63,43,679/- AND CENTRAL E XCISE DUTY AMOUNTING TO RS.1,80,24,351/- WHICH SHOULD HAVE BEEN INCLUDED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CHOWRINGHEE SA LES BUREAU VS. CIT 87 ITR 542 AND SINCLARE MURAY & CO. PVT. LTD. 97 ITR 615. ACCORDINGLY , HE ADDED THE AMOUNT OF SALES TAX AND EXCISE DUTY TO THE TURNOVER OF THE ASSESSEE FOR CALCULATING DEDUCTION UNDER SECTION 80HHC OF THE ACT WHICH WAS CONFIRMED IN APPEAL BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). WE FI ND THAT THE ISSUE IS NOW SETTLED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. LAXMI MACHINE WORKS (2007) 290 ITR 6 67 (SC), WHERE IT WAS HELD THAT EXCISE DUTY AND SALES TAX ARE NOT INCLUDA BLE IN TOTAL TURNOVER IN THE FORMULA CONTAINED IN S. 80HHC (3). WE THEREFORE, S ET ASIDE THE ORDERS OF THE LOWER ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 6 - AUTHORITIES AND DIRECT THE LEARNED ASSESSING OFFICE R TO RECOMPUTED THE DEDUCTION ALLOWABLE TO THE ASSESSEE UNDER SECTION 80HHC OF TH E ACT AFTER EXCLUDING THE AMOUNT OF SALES TAX AND EXCISE DUTY FROM THE TOTAL TURNOVER OF THE ASSESSEE. THUS, THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED. 11. GROUND NO.5 OF THE APPEAL READS AS UNDER: 5.0 THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) ERRED IN UPHOLDING THE ACTION OF THE AO IN REDUCING THE AMOU NT OF DEDUCTION UNDER SECTION 80IA WHILE CALCULATING UNDER SECTION 80HHC OF THE ACT. 12. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE VERY FAIRLY CONCEDED THAT THE ISSUE STANDS COVERED AGAINST THE ASSESSEE BY THE DECISION OF DELHI SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ASSIST ANT COMMISSIONER OF INCOME TAX VS. HINDUSTAN MINT & AGRO PRODUCTS (P) LTD. (20 09) 119 ITD 107 (DELHI) (SB), WHEREIN IT WAS HELD THAT IN VIEW OF THE PROVI SIONS OF SECTION 80-IA(9) DEDUCTION UNDER SECTION 80HHC IS TO BE ALLOWED ON P ROFIT AND GAINS AS REDUCED BY THE DEDUCTION CLAIMED AND ALLOWED UNDER SECTION 80- IB AND 80-IA. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 13 GROUND NO.6 OF THE APPEAL READS AS UNDER: 6.0 THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LEARNED AS SESSING OFFICER IN CHARGING INTEREST UNDER SECTION 234A, 234B, 234C AN D 234D OF THE ACT AND ACTION IN INITIATING THE PENALTY PROCEEDING S UNDER SECTION 271(1)(C) OF THE ACT. 14. AT THE TIME OF THE HEARING THE LEARNED AUTHORIS ED REPRESENTATIVE OF THE ASSESSEE DID NOT PRESS THIS GROUND OF APPEAL AND AC CORDINGLY THE SAME IS DISMISSED AS NOT PRESSED. ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 7 - ITA NO.2428/AHD/2007 15. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LA W AND ON FACTS IN CANCELLING THE PENALTY OF RS.3,45,925/- LEVIED UNDER SECTION 2 71(1)(C) OF THE INCOME TAX ACT, 1961. 16. THE BRIEF FACTS OF THE CASE ARE THAT THIS APPEA L IS FILED AGAINST THE PENALTY ORDER UNDER SECTION 271(1)(C) DATED 26.10.2006 OF I TO, WARD-4(2), AHMEDABAD. THE LEARNED ASSESSING OFFICER LEVIED THE PENALTY WI TH REFERENCE TO DISALLOWANCE OUT OF DEDUCTIONS CLAIMED UNDER SECTION 80IA AND UN DER SECTION 80HHC AT RS.1,99,159/- AND RS.7,42,133/- RESPECTIVELY. HE LE VIED A MINIMUM PENALTY EQUIVALENT TO TAX PAYABLE ON THE SAID DISALLOWANCE. IN DOING SO, HE HELD THAT THE APPELLANT FURNISHED INACCURATE PARTICULARS BY NOT C OMPUTING THE ELIGIBLE DEDUCTION UNDER SECTION 80IA AND 80HHC CORRECTLY. ACCORDINGLY , HE HELD THAT THE ASSESSEE WAS LIABLE FOR PENALTY UNDER SECTION 271(1)(C). 17. IN APPEAL BEFORE THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS), THE ASSESSEE CONTENDED THAT THE DISALLOWANCES EFFECTED WERE HIGHLY DEBATABLE AND ARE BEING CONTESTED AT VARIOUS STAGES AND MERE CHANGE O F INCOME ON SUCH ISSUE CANNOT CONSTITUTE THE NECESSARY INGREDIENTS FOR LEVY OF PE NALTY UNDER SECTION 271(1)(C). HE ALSO DREW MY ATTENTION TO THE APPELLANT ORDER FOR T HE A.Y. 2001-2002 DATED 23.11.2006 WHEREIN ON SIMILAR CIRCUMSTANCES, THE PE NALTY WAS CANCELLED BY CIT(A)-VII, AHMEDABAD. HE ALSO RELIED ON THE DECISI ON OF THE JURISDICTIONAL ITAT IN THE CASE OF JAL LTD. VS. ACIT, CIRCLE-1, NAVSAR I IN ITA NO.2780/AHD/2003 DATED 7.1.2005 AND DCIT (ASSTT.) SPECIAL RANGE-2, B ARODA V. PROJECT TECHNOLOGIES PVT. LTD. BARODA IN ITA NO.2200/A/1997 DATED 16.11. 2004 WHEREIN IT WAS HELD THAT WHERE ALL THE COMPLETE DETAILS NECESSARY FOR COMPUT ATION OF INCOME WERE FILED AND ONLY THE DEDUCTION WAS VARIED THEN THERE WAS NO CAS E FOR CONCEALMENT PENALTY. IN THE CASE OF THE APPELLANT ALSO THE VARIATION WAS ON ACCOUNT OF ISSUES BEING DEBATED AT VARIOUS STAGES LIKE EXCLUSION OF BUSINESS RECEIP TS IN CALCULATING THE EXPORT PROFIT ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 8 - OR AS THE CASE MAY BE INCOME DERIVED FROM THE INDUS TRIAL UNDERTAKING AND IN THAT VIEW OF THE MATTER, I FIND THIS TO BE A CASE FOR DI SALLOWANCE OF EXCESS CLAIM ONLY AND NOT A CASE WHERE PARTICULARS WERE CONSCIOUSLY FURNI SHED INACCURATELY. I AM IN AGREEMENT WITH THE REASONING GIVEN BY CIT(A)-VII, A HMEDABAD WHILE DISPOSING THE PENALTY ORDER RELEVANT FOR THE A.Y. 2001-2002. THERE IS ALSO NO MATERIAL TO HOLD THAT THE APPELLANT INTENTIONALLY WORKED OUT A HIGHE R CLAIM OF DEDUCTION THERE BEING NO MATERIAL ALTOGETHER. IN THE LIGHT OF THE ABOVE D ISCUSSION, THE CONCEALMENT PENALTY OF RS.3,45,925/- IS CANCELLED. 18. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE FILED COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AS SESSMENT YEAR 2001-02, WHEREIN VIDE ORDER DATED 19.04.2007, IN ITA NO.801/AHD/2007 , THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT LEVIED F OR DISALLOWING DEDUCTION UNDER SECTION 80HHC TO THE ASSESSEE AS THE ASSESSEE HAD N OT ADJUSTED BROUGHT FORWARD LOSS WHILE CLAIMING DEDUCTION UNDER SECTION 80HHC. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT AS TH E ISSUE AT HAND IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, FOLLOWING THE SAME, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) SHOULD BE CONFIRMED AND APPEAL OF THE REVENUE SHOULD BE DISMI SSED. 19. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORT ED THE ORDER OF THE LEARNED ASSESSING OFFICER. 20. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80IA AND UNDER SECTION 80HHC OUT OF WHICH AMOUNT OF RS.1,99,159/-AND RS.7,42,133/- RESPECTIVE LY WAS DISALLOWED BY THE LEARNED ASSESSING OFFICER IN THE ASSESSMENT ORDER. WE FIND THAT IN THE QUANTUM APPEAL, WE HAVE HELD THAT SALES TAX AND EXCISE DUTY ARE NO INCLUDABLE IN THE TOTAL ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 9 - TURNOVER FOR COMPUTING THE DEDUCTION ALLOWABLE UNDE R SECTION 80HHC OF THE ACT. THEREFORE, THE PENALTY LEVIED IN RESPECT OF THIS GR OUND IS CLEARLY UNSUSTAINABLE. 21. IN RESPECT OF INTEREST INCOME WHICH WAS EXCLUDE D FROM BUSINESS INCOME FOR CALCULATING DEDUCTION UNDER SECTION 80HHC AND 80IA, WE FIND THAT THE ASSESSEE HAS NOT CONCEALED ANY INCOME OR HAS NOT FURNISHED ANY I NACCURATE PARTICULARS OF INCOME. THE ASSESSEE SUBMITTED THAT ITS CLAIM WAS B ASED UPON ADVICE OF AN EXPERT AND ON THE BASIS OF THE CERTIFICATE ISSUED BY A CHA RTERED ACCOUNTANT. THE ONLY REASON FOR LESSER ALLOWANCE OF DEDUCTION WAS DUE TO A BONAFIDE DIFFERENCE ABOUT THE HEAD UNDER WHICH INTEREST INCOME WAS CHARGEABLE TO TAX AND NOT BECAUSE OF ANY CONCEALMENT OF INCOME BY THE ASSESSEE OR BECAUSE OF ANY FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. WE FIND THAT IN THE INSTANT CASE, NO PRIMARY FACTS OF INCOME SUBMITTED BY THE ASSESSEE WAS FOUND FALSE BY THE REVENUE NOR IT WAS FOUND THAT THE ASSESSEE HAS NOT DISCLOSED ANY INCOM E. THUS, IN OUR CONSIDERED OPINION, THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) WAS FULLY JUSTIFIED IN DELETING THE PENALTY OF RS.3,45,945/- UNDER SECTION 271(1)(C) OF THE ACT LEVIED BY THE LEARNED ASSESSING OFFICER . THUS, THE APPEAL OF THE REVENUE IS DISMISSED. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AND OF THE REVENUE IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 13/11/2009. SD/- SD/- ( H.L. KARWA ) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD; DATED 13/11/2009 PREPARED AND COMPARED BY : PARAS ITA NO.242 8/AHD/2007 & 1344/AHD/2006 M/S.JOHNSON SCREEN (I)LTD. ASST.YEAR -2003-04 - 10 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-VIII, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD