The DCIT, Circle-4(1)(2), Ahmedabad V. M/s. Veer Plastics Pvt. Ltd., Ahmedabad

ITA 2461/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8382 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 29-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V C T A NNU
• Keywords: Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 4(1)(2), AHMEDABAD (APPELLANT) VS M/S. VEER PLASTICS PVT. LTD. 1 ST FLOOR 104, SARDAR PATEL COLONY, STADIUM ROAD, AHMEDABAD PAN: AAACV6291P (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI V.C. T A NNU , A.R. DATE OF HEARING : 28 - 03 - 2 018 DATE OF PRONOUNCEMENT : 17 - 04 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2010 - 11 , ARIS ES FROM ORDER OF THE CIT(A) - 8 , AHM EDABAD DATED 12 - 07 - 2016 , IN DELETING THE PENALTY OF RS. 12,81,910/ - , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. IN T HIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 5 , 41 , 87 , 050/ - WAS FILED ON 30 TH SEP, 2010. THEREAFTER, ASSESSEE HAS REVISED ITS RETURN OF INCOME ON 01 ST OCT, 2010 BY DECLARING TOTAL INCOME AT RS. 5 , 40 , 89 , 200/ - . THE ASSESSMENT I T A NO . 2461 / A HD/20 16 A SSESSMENT YEAR 2010 - 11 I.T.A NO. 2461 /A HD/2016 A.Y. 2010 - 11 PAGE NO DCIT VS. M/S. VEER PLASTICS PVT. LTD. 2 U/S. 143(3) OF THE ACT WA S COMPLETED ON 19 TH NOV, 2012 DETERMINING TOTAL INCOME AT RS. 5, 95 , 35 , 900/ - . T HE ASSESSING OFFICER HAS MADE FOLLOWING DISALLOWANCE : - 1 DISALLOWANCE OF PRIOR PERIOD EXPENSES RS.36,68,430/ - 2 DISALLOWANCE U/S 36(1)(VA) RS.24849/ - 3 DISALLOWANCE U/S .14A R.W. RULE 8D RS. 1,01,154/ - 4 DISALLOWANCE U/S.350 RS.1,03,000/ - THE ASSESSING OFFICER HAS ALSO INITIATION PENALTY PROCEEDINGS U/S. 271(1)(C) OF T HE ACT. 3. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS PARTLY GRAN TED PART RELIEF AS UNDER: - 1 DISMISSED THE APPEAL ON THE ISSUE OF DISALLOWANCE OF PRIOR PERIOD EXPENSES 1 DELETED THE DISALLOWANCE U/S.36(1)(VA) OF THE ACT 2 DELETED THE DISALLOWANCE U/S.14A R.W. RULE 8D 4 DISMISSED THE APPEAL ON THE ISSUE OF D ISALLOWANCE U/S. 35 D 4. SUBSEQUENTLY D URING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSING OFFICER STATED THAT ASSESSEE HAS CLAIMED TRAVELLING EXPENSES AMOUNTING TO RS. 36 , 68 , 430/ - PERTAIN ING TO FINANCIAL YEAR 2002 - 03 TO 2004 - 05 WHICH WAS DISALLOWED ON THE GROUND THAT I T WAS NOT RELATED TO THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS ALSO CLAIMED DEDUCTI ON U/S. 35D OF THE ACT OF RS. 1, 30 , 00 0 / - ON ACCOUNT OF PRELIMINARY EXPENSES. THE SAME WAS DISALLOWED ON THE GROUND THAT THIS EXPENDITURE IS OF THE NATURE OF CAPITAL EXPENDITURE WHICH PROVIDES ENDURING BENEFIT TO THE ASSESSEE. THEREAFTER THE ASSESSING OFFICER HAS LEVIED A PENALTY OF RS. 12,81,910/ - U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. I.T.A NO. 2461 /A HD/2016 A.Y. 2010 - 11 PAGE NO DCIT VS. M/S. VEER PLASTICS PVT. LTD. 3 5. AGGRIEVED ASSESSEE F ILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE STATING THAT ASSESSE HAS DISCLOSED ALL THE FACT S RELATED TO EXPENSES CLAIMED AND HAS NOT CONCEALED ANY INCOME OR PARTICULARS WITH MALA FIDE INTENTION TO EVADE TAX. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL SUBMITTED THAT THE CO - ORDINATE BENCH OF THE ITAT VIDE ITA NO. 449/AHD/2014 DATED 17/08/2017 HAS DELETED THE MAJOR PART OF ADDITIO N PERTAINING TO TRAVELLING EXPENSES OF RS. 36 , 68 , 430/ - E XCEPT DISALLOWANCE OF PRELIMINARY EXPENSES OF RS. 1,30,000/ - . IT W AS FURTHER CONTENDED THAT FULL PARTICULARS OF EXPEND ITURE WAS FURNISHED AND T HERE IS NO QUESTION OF LEVYING PENALTY EVEN IN RESPECT OF PRELIMINARY EXPENSES. ON THE OTHER HAND, THE LD. DEP ARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF ASSESSING OFFICER. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREF ULLY. THE COORDINATE BENCH OF THE ITAT AS SUPRA IN THE CASE OF THE ASSESSEE HAS DELETED THE MAJOR PART OF THE A DDI TION ON THE BASIS OF WHICH IMPUGNED PENALTY WAS LEVIED . I N RESPECT O F PRELIMINARY EXPENSES OF RS. 1, 30 , 00 0 , WE OBSERVE THAT ASSESSEE HAS DISCLOSED ALL THE FACTS RELATED TO THE EXPENSES CLAIMED AND THE ADDITION WAS MADE ON THE BASIS OF DIFFERENT TREATMEN T GIVEN TO THE EXPENDITURE BY THE ASSESSING OFFICER. IN THE LIGHT OF THE DECISION OF THE CO - ORDINATE BENCH, THE PENALTY LEVIED HAS BECOME INFRUCTUOUS AS THE MAJOR PART OF THE QUANTUM ADDITION HAS BEEN DELETED. THEREFORE , WE UPHOLD THE DECISION OF LD. CIT( A). ACCORDINGLY , THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 17 - 04 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICI AL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 1 7 /04 /2018 I.T.A NO. 2461 /A HD/2016 A.Y. 2010 - 11 PAGE NO DCIT VS. M/S. VEER PLASTICS PVT. LTD. 4 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,