HIMSON TEXTILES ENG. IND. PVT. LTD, Surat V. THE ADDL. CIT, RANGE-1, Surat

ITA 2476/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6268 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 25-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Wrong claim
• Section: 271(1)(c); 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : AH MEDABAD ( BEFORE HONBLE SHRI T.K.SHARMA, J.M. & HONBLE SHRI A.K.GARODIA, A.M.) I.T.A.NO. 2476/AHD./2009 : ASSESSMENT YEAR 200 4-05 HIMSON TEXTILES ENGINEERING IND. PVT. LTD. VS- ADDL.CIT, RANGE-1, SURAT (PAN : AAACH 5825K) (APPELLANT) (RESPONDENT) APPELLANT BY : WRITTEN SUBMISSION RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR.D.R. O R D E R PER SHRI T.K.SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF LD. CIT(A)-I, SURAT DATED 28.07.2009 CONFIRMING THE PENALTY LEVIED BY T HE AO UNDER SECTION 271(1)(C) IN RESPECT OF DISALLOWANCE ON DEPRECIATION- RS.87,331/ -, NON-ALLOWANCE OF DEDUCTION UNDER SECTION 80IB RS.1,14,339/- AND ADDITION OF RS.970/- FOR THE ASSESSMENT YEAR 2004-2005. 2. BRIEFLY STATED, THE FACTS ARE THAT THE AO LEVIED THE PENALTY UNDER SECTION 271(1)(C) AMOUNTING TO RS.2,65,037/- IN RESPECT OF FOLLOWING ADDITIONS/DISALLOWANCES AMOUNTING TO RS.7,95,105/- MADE BY THE AO IN ASSESS MENT FRAMED UNDER SECTION 143(3) ON 27.12.2006. DISALLOWANCE OF CLAIM OF DEPRECIATION IN RESPECT OF SOLD OUT MACHINERIES 87,331 DISALLOWANCE OF DEPRECATION IN RESPECT OF SUBSIDY AMOUNT RECEIVED TOWARDS PLANT & MACHINERIES 4,18,520 ADDITION ON ACCOUNT OF ESTIMATION OF GROSS PROFIT 2,80,93,222 ADDITION ON ACCOUNT OF WRONG CLAIM OF DEDUCTION U/S 80IB ON OTHER INCOME 1,23,540 ADDITION ON ACCOUNT OF ADJUSTMENT U/S 145A 3,24,70,328 ADDITION ON ACCOUNT OF LATE PAYMENT OF PF & ESI 1,18,480 2 ITA NO.2476/AHD./2009 3. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) IN RESPECT OF DIS ALLOWANCE ON DEPRECIATION RS.87,331/-, NON-ALLOWANCE OF DEDUCTION UNDER SECTI ON 80IB RS.1,14,339/- AND ADDITION OF RS.970/- ON ACCOUNT OF ADJUSTMENT UNDER SECTION 145A. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING BEFORE US, NONE WAS PRESE NT FROM THE SIDE OF THE ASSESSEE. HOWEVER, WRITTEN SUBMISSIONS WERE FILED V IDE LETTER DATED 13.06.2011 WHEREIN IT WAS CONTENDED THAT IN THE IMPUGNED ORDER , THE LD. CIT(A) HAS CONFIRMED THE PENALTY IN RESPECT OF THE FOLLOWING THREE ADDITIONS . SR.NO. PENALTY RS. 1. DEPRECIATION ON SOLD OUT MACHINERY 87,331/- 2. CLAIM OF DEDUCTION OF OTHER INCOME U/S.80IB 1,14,339/ - 3. ADJUSTMENT U/S.145A 970/- 4.1 WITH REGARD TO CLAIM OF DEPRECIATION ON SOLD OU T MACHINERY AMOUNTING TO RS.87,331/-, IT WAS STATED THAT THE ASSESSEE, VIDE ITS LETTER DATED 6.12.2006, SUO MOTU REQUESTED TO REDUCE THE DEPRECIATION WHEN IT CAME T O ITS NOTICE THAT THE DEPRECIATION WAS WRONGLY CLAIMED. IT WAS ALSO STATED THAT IN THE ASSESSMENT YEAR 2003-04 ALSO, PENALTY ON THIS DISALLOWANCE WAS MADE AND THE SAME WAS DELETED BY THE TRIBUNAL, VIDE ORDER DATED 04.06.2010 IN ITA NO.2381 & 2949/AHD/20 08 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04. ON THIS BASIS, IT WAS CONTENDED THAT THE PENALTY LEVIED BY THE LD. CIT(A) IN RESPECT OF THIS ADDITION BE CANCE LLED. 4.2 WITH REGARD TO NON-ALLOWANCE OF DEDUCTION UNDER SECTION 80IB AMOUNTING TO RS.1,14,339/-, IT WAS CONTENDED THAT THE ASSESSEE H AS GIVEN ALL THE DETAILS IN RESPECT OF THIS CLAIM. THEREFORE, PENALTY UNDER SECTION 271(1) (C) IS NOT LEVIABLE, AS PER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F RELIANCE PETROCHEMICALS LTD. REPORTED IN 322 ITR 158. IT WAS FURTHER POINTED OUT THAT THE TRIBUNAL, IN ASSESSEES OWN CASE VIDE ORDER DATED 04.06.2010 ( SUPRA ), CANCELLED THE PENALTY IN RESPECT OF NON- ALLOWANCE OF DEDUCTION UNDER SECTION 80IB IN THE AS SESSMENT YEAR 2003-04. HENCE, FOLLOWING THE TRIBUNALS ORDER, THIS MAY BE CANCELL ED. 3 ITA NO.2476/AHD./2009 4.3 WITH REGARD TO CONFIRMING THE ADDITION OF RS.97 0/- ON ACCOUNT OF ADJUSTMENT UNDER SECTION 145A AS AGAINST ADDITION OF RS.3,24,7 0,328/- MADE BY THE AO IN THE ASSESSMENT ORDER BY REJECTING THE BOOKS OF ACCOUNTS UNDER SECTION 145A, IT WAS CONTENDED THAT THIS MAY NOT BE CONSIDERED TO BE A C ASE OF CONCEALMENT, KEEPING IN VIEW THE FINDINGS RECORDED BY THE TRIBUNAL IN QUANT UM APPEAL. IT WAS SUBMITTED THAT PENALTY LEVIED UNDER SECTION 271(1)(C) IN RESPECT O F THIS SMALL ADDITION OF RS.970/- CONFIRMED BY THE TRIBUNAL BE DELETED. 5. ON THE OTHER HAND, SHRI SAMIR TEKRIWAL, APPEARIN G ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). H E POINTED OUT THAT IT IS THE DUTY OF THE ASSESSEE TO CAREFULLY FILE THE RETURN OF INCOME . HE POINTED OUT THAT IN RESPECT OF ALL THE THREE AFORESAID ADDITIONS, PENALTY WAS RIGHTLY LEVIED AND CONFIRMED BY THE LD. CIT(A). 6. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE PENALTY IN RESPECT OF DEPRECIATION ON SOLD OUT MACHINERY AND NON-ALLOWANCE OF DEDUCTION U NDER SECTION 80IB WAS LEVIED IN THE ASSESSMENT YEAR 2003-04. THE ITAT, D BENCH, V IDE ITS ORDER DATED 04.06.2010 IN ITA NOS. 2381 & 2941/AHD/2008 FOR THE ASSESSMENT YE AR 2003-04 HELD THAT PENALTY IN RESPECT OF BOTH THESE ADDITIONS/DISALLOWANCES IS NO T LEVIABLE. WE, THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03, CANCEL THE PENALTY IN RESPECT OF BOTH THESE ADDITIO NS. COMING TO THE CONFIRMATION OF PENALTY IN RESPECT OF ADDITION TO THE EXTENT OF RS. 970/- AND CONFIRMED BY THE TRIBUNAL OUT OF TOTAL ADDITION OF RS.3,24,70,328/- MADE BY T HE AO UNDER SECTION 145A, LOOKING TO THE SMALL AMOUNT OF ADDITION, WE ARE OF THE VIEW THAT ON THIS ALSO, THE PENALTY IS NOT LEVIABLE BECAUSE IT WAS DUE TO SOME MISTAKE IN CALC ULATION. ON THIS SMALL AMOUNT ALSO, THE PENALTY CONFIRMED BY THE LD. CIT(A) IS HEREBY C ANCELLED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2011 SD/- SD/- (A.K.GARODIA) (T.K.SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30/06/2011 4 ITA NO.2476/AHD./2009 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT 3) CIT(A) CONCERNED 4) CIT CONCERNED 5) D.R., ITAT, AHMEDABAD TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD TALUKDAR/SR.P.S.