DCIT 9(3), MUMBAI V. SEJAL GLASS LTD, MUMBAI

ITA 2432/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93200 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Keywords: Wrong claim
• Section: 80IB

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI A.D. JAIN, JM AND SHRI N.K. BILLAIYA, A M .. , . . , ./ I.T.A. NO. 2432 /MUM/2013 ( / ASSESSMENT YEAR : 2007-08 DY. COMMISSIONER OF INCOME TAX 9(3), 2 ND FLOOR, ROOM NO. 229, AAYAKAR BHAVAN, M.K.MARG, MUMBAI 400 020. / VS. M/S SEJAL GLASS LTD., 201/202, ABHILASHA, 2 ND FLOOR, S.V. ROAD, KANDIVLI (W), MUMBAI 400 067. ./ PAN : AADCS8659M ( ! / APPELLANT ) .. ( '# ! / RESPONDENT ) A PPELLANT BY SHRI NAVEEN GUPTA R E SPONDENT BY : NONE $ % & ' ( ) / DATE OF HEARING : 15-07-2015 *+,- ' ( ) / DATE OF PRONOUNCEMENT : 15-07-2015 [ . / O R D E R PER A.D. JAIN, J.M . : .. , THIS IS DEPARTMENTS APPEAL FOR A.Y. 2007-08, CHALL ENGING THE ACTION OF THE LD. CIT(A) IN DIRECTING THE A.O. TO RECALCULATE THE INCOME ELIGIBLE FOR DEDUCTION U/S 80IB AND ACCORDINGLY TO RECALCULATE T HE MINIMUM LEVIABLE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. AS PER ORDER SHEET ON RECORD, THE MATTER WAS FIX ED FOR HEARING ON 13-1- 2015. AN APPLICATION FOR ADJOURNMENT WAS FILED. THE ADJOURNMENT SOUGHT WAS GRANTED AND THE HEARING OF THE CASE WAS FIXED FOR 1 5-7-2015. THIS DATE WAS NOTED BY THE LD. COUNSEL FOR THE ASSESSEE. HOWEVER , ON 15-7-2015, NONE HAS ITA 2432/M/13 2 PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE. THE BE NCH, THEREFORE DECIDED TO DISPOSE OF THE APPEAL IN THE ABSENCE OF THE ASSESSE E AFTER HEARING THE LD. D.R. AND CONSIDERING THE MATERIAL PLACED ON RECORD. 3. THE PENALTY IN QUESTION WAS LEVIED ON THE DISALL OWANCE OF PART DEDUCTION U/S 80IB OF THE ACT AMOUNTING TO RS. 1,45 ,60,052/-. THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AMOUNTS TO RS. 49,0 0,913/-. THE STAND OF THE ASSESSEE IS THAT FOR A.Y. 2006-07, SIMILAR ADDITION S WERE MADE AND IN APPEAL, THE ITAT GAVE SUBSTANTIAL RELIEF TO THE ASSESSEE DU E TO THE FACT THAT MOST OF THE AMOUNTS, FALLING UNDER THE HEAD OTHER INCOME WERE INCOME DERIVED DIRECTLY FROM THE INDUSTRIAL UNDERTAKING, THE DETAI LS WHEREOF WERE DULY SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. THE CO NTENTION OF THE DEPARTMENT, ON THE OTHER HAND, IS THAT THE QUANTUM ADDITION FOR THE YEAR UNDER CONSIDERATION, AS CONFIRMED BY THE LD. CIT(A) STANDS ACCEPTED BY THE ASSESSEE ITSELF AND THAT SINCE EACH YEAR IS AN INDE PENDENT YEAR, THIS FACT IS OF PARAMOUNT IMPORTANCE, RENDERING THE LEVY OF PENALTY PERFECTLY JUSTIFIABLE AND CORRECT. IN THIS REGARD, WE FIND THAT THE LD. CIT(A ), WHILE ISSUING THE IMPUGNED DIRECTIONS TO THE A.O. HAS OBSERVED AS FOLLOWS:- 3.3 I HAVE CONSIDERED THE ISSUE UNDER APPEAL, RIVA L SUBMISSION OF THE APPELLANT AND FINDING OF THE ASSESSING OFFICER, CAR EFULLY. I FIND THAT LD. ASSESSING OFFICER HAS RIGHTLY LEVIED THE PENALTY ON WRONG CLAIM OF DEDUCTION U/S. 80IB IRRESPECTIVE OF OFFERING TAX ON BOOK PROFIT. IT IS THE RESPONSIBILITY OF THE APPELLANT TO FILE TRUE RETURN OF INCOME BY DISCLOSING ALL THE PARTICULARS OF INCOME TO BE ASSESSED BY THE ASSESSING OFFICER. IN THIS CASE, APPELLANT HAS CLAIMED WRONG DEDUCTION OF VARIOUS INELIGIBLE DEDUCTIONS U/S.80IB. HENCE, LEVY OF PENALTY IN RESP ECT OF THOSE ITEMS ARE WORTH APPROVAL. IT IS HOWEVER, PERTINENT TO MEN TION THAT SUBSEQUENTLY HON'BLE ITAT IN I.T.A. NO.1661/MUMBAI/ 2010 ORDER DATED 23.09.2011 AS CONSIDERED SIMILAR ISSUE IN AY 2006-07 AND HAS HELD THAT INSURANCE RECEIPT, OCTROI RECEIPT, MISCEL LANEOUS INCOME INTEREST ON DEPOSITS, INTEREST ON INTER-CORPORATE D EPOSITS AND DIVIDEND ON SHARES ETC. ARE NOT ELIGIBLE FOR DEDUCTION U/S.8 0IB. IN RESPECT OF ADMINISTRATIVE CHARGES, IT HAS BEEN HELD THAT ASSES SING OFFICER HAS TO RE-EXAMINE AFRESH AND IN THE LIGHT OF DIRECTION OF THE HON'BLE ITAT, HE HAS TO ALLOW APPROPRIATE RELIEF TO THE APPELLANT. T O THAT EXTENT ARGUMENT OF THE LD. A.R. IS FOUND TO BE ACCEPTABLE BECAUSE I SSUE HAS BEEN FINALLY DECIDED BY THE HON'BLE ITAT. ACCORDINGLY, LD. AR OF THE APPELLANT HAS ITA 2432/M/13 3 POINTED OUT THAT THE RELIEF GRANTED BY THE HON'BLE ITAT HAS TO BE REDUCED, HOWEVER, IN RESPECT OF OTHER NEW ITEMS AMO UNTING TO RS, 29,85,384/-, HE HAS NOT OBJECTED BUT HAS SUBMITTED THAT MATTER MAY BE DECIDED ON MERIT. I FIND IT APPROPRIATE TO DIRECT T HE ASSESSING OFFICER TO CONFINE TO THE APPROVAL OF THE HON'BLE ITAT IN RESP ECT OF VARIOUS ITEMS. IN RESPECT OF OTHER ITEMS WHICH ARE NOT COVERED BY THE HON'BLE ITAT ARE HEREBY CONFIRMED BECAUSE THESE ITEMS ARE NOT RELATE D TO THE INCOME WHICH ARE TO BE PRESUMED THAT THEY ARE DERIVED FROM THE INDUSTRIAL UNDERTAKING I.E. MANUFACTURING OF GLASS. OTHER INCO ME AS REFERRED TO BY THE ASSESSING OFFICER WHICH ARE NOT DERIVED FROM TH E INDUSTRIAL UNDERTAKING BUT ATTRIBUTABLE 'TO THE BUSINESS ARE N OT ENTITLED FOR DEDUCTION U/S.80IB AS HAS BEEN HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT(2009) 317 ITR 218 (SC). ACCORDINGLY, I FIND NO SUBSTANCE IN THE ARGUMENTS OF THE LD. A.R. THAT RELIEF MAY ALSO BE GIVEN IN RESPECT OF REST OF OTHER INCOME. IN THE BACKGROUND OF THE ABOVE DISCUSSION, ASSESSING OFFICER IS DIRECTED TO RE-CALCULATE THE INCOME FROM OTHER SOURCES IN THE LIGHT OF DECISION OF THE HON'BLE IT AT AND ACCORDINGLY RE-CALCULATE THE MINIMUM LEVIABLE P ENALTY U/S.271C L XC) OF THE LT. ACT. THUS ON PRINCIPLE LEVY OF PENAL TY IS SUSTAIN. 3.4 IN THE RESULT, GROUND NO.1 TO 4 ARE DECIDED ACC ORDINGLY WITH APPROPRIATE RELIEF IN THE LIGHT OF DECISION OF THE HON'BLE ITAT IN AY 2006-07 AS REFERRED TO SUPRA. 4. THE CATEGORICAL OBSERVATION MADE BY THE LD. CIT( A) HAS NOWHERE BEEN DISPUTED BY THE DEPARTMENT. IT REMAINS UNDISPUTED THAT THE FACTS ARE SIMILAR TO THOSE PRESENT BEFORE THE TRIBUNAL FOR A.Y. 2006- 07, IN WHICH YEAR, THE TRIBUNAL HAS HELD THE INSURANCE RECEIPT, OCTROI REC EIPT, MISCELLANEOUS INCOME, INTEREST ON FD, INTEREST ON INTER-CORPORATE DEPOSITS AND DIVIDEND ON SHARES, ETC., TO BE NOT ELIGIBLE FOR DEDUCTION U/S 80IB. SO FAR AS REGARDS TO THE ADMINISTRATIVE CHARGES, APPROPRIATE RELIEF WAS REQU IRED TO BE EXTENDED TO THE ASSESSEE. IT WAS ONLY APROPOS OTHER NEW ITEMS, NOT COVERED BY THE SAID TRIBUNAL DECISION, THAT WERE CONFIRMED BY THE LD. C IT(A), SINCE THE INCOME FROM THESE ITEMS WAS NOT DERIVED FROM THE INDUSTRIA L UNDERTAKING OF THE ASSESSEE. IN FACT, THE DIRECTIONS ISSUED BY THE LD. CIT(A) ARE WELL CONSIDERED. WE DO NOT FIND ANY ERROR THEREIN AND THE SAME ARE C ONFIRMED. THERE IS NO MERIT IN THE GRIEVANCE RAISED BY THE DEPARTMENT AND THE SAME IS REJECTED, THERE BEING NO DIFFERENCE IN THE FACTS PRESENT FOR THE YEAR UNDER CONSIDERATION, FROM THOSE BEFORE THE TRIBUNAL FOR A.Y. 2006-07. ITA 2432/M/13 4 5. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY, 2015. . ' *+,- $ /0 1 2 15-07-2015 + ' 3& SD/- SD/- (N.K. BILLAIYA) (A.D. JAIN ) ACCOUNTANT MEMBER /J UDICIAL MEMBER / $ & MUMBAI ; 1 DATED 22-07-2015 [ %.../ R.K. R.K. R.K. R.K. , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $ ?( () / THE CIT(A)- 20, MUMBAI 4. $ ?( / CIT-9, MUMBAI 5. B%C 3 '(DE , ) DE- , / $ & / DR, ITAT, MUMBAI E BENCH 6. 3 F G & / GUARD FILE. ! ( / BY ORDER, # B( '( //TRUE COPY// )/(* + ( DY./ASSTT. REGISTRAR) , / $ & / ITAT, MUMBAI