The ACIT,(OSD)., Circle-10, Ahmedabad V. M/s. Solson Exim, Ahmedabad

ITA 2614/AHD/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67604 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 14-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: A P MEHTA
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI ANIL CHATURVE DI, AM) ITA NO.2614/AHD/2012 (AY: 2007-08) THE A. C. I. T.(OSD), CIRCLE-10, 1 ST FLOOR, NARAYAN CHAMBERS, NEHRU BRIDGE CORNER, ASHRAM ROAD, AHMEDABAD P. A. NO. AAGFS 4883 D VS M/S. SOLSON EXIM, 2,VARUN, 37,SHRIMALI SOCIETY, NAVRANGPURA, AHMEDABAD 380 009 (APPELLANT) (RESPONDENT) APPELLANT BY SHRI O. P. BATHEJA, SR. DR RESPONDENT BY SHRI A. P. MEHTA, AR DATE OF HEARING: 18-08-2013 DATE OF PRONOUNCEMENT: 23-08-2013 ORDER PER ANIL CHATURVEDI : THE APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-II, AHMEDAB AD DATED 09 TH AUGUST, 2012 FOR THE ASSESSMENT YEAR 2007-08. 2. THE BRIEF FACTS AS CULLED OUT FROM THE ORDERS OF THE AUTHORITIES BELOW ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN TH E BUSINESS OF MANUFACTURING AND EXPORT OF TOOLS AND CASTING COMPO NENTS. THE ASSESSEE FILED ITS RETURN OF INCOME ON 31-10-2007 D ECLARING TOTAL INCOME OF RS. NIL AND THE ASSESSMENT U/S 143(3) OF THE ACT WAS FRAMED AND FINALIZED ON 22-12-2009 DETERMINING TOTA L INCOME OF THE ASSESSEE AT RS.6,12,591/- BEFORE ADJUSTMENT OF BROU GHT FORWARD LOSSES. ONE OF THE ADDITIONS MADE WAS ON ACCOUNT OF DISALLOWANCE OF INTEREST TAKEN FROM EXIM BANK U/S. 43B OF THE ACT. ON THE AFORESAID ITA NO.2614/AHD/2012 (AY: 2007-08) THE ACIT (OSD) CIR-10, AHMEDABAD VS M/S. SOLSON EXIM 2 ADDITION OF DISALLOWANCE U/S 43B OF THE ACT, THE LE ARNED AO VIDE ORDER DATED 27-04-2010 LEVIED PENALTY OF RS.7,85,910/- U/ S 271 (1) (C) OF THE ACT. AGGRIEVED BY THE AFORESAID ORDER OF THE AO , THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A). THE L EARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETE D THE PENALTY BY HOLDING AS UNDER IN PARA 2.4 ON PAGE 6 AND 7 VIDE H IS ORDER DATED 09-08-2012: 2.4 A PERUSAL OF THE JUDICIAL CITATIONS DISCUSSED ABOVE, INDICATES THAT IN THE CASES OF PENALTY WHAT IS TO BE SEEN IS AS TO WHETHER ANY MALAFIDE CAN B E ATTRIBUTED TO A ASSESSEE WHILE MAK ING A CLAIM OF DEDUCTION OR EXPENDITURE OR ALLOWANCE WHICH MAY BE SUBSEQUENTLY FOUND BY THE A. O. AS INCORRECT IN THE EYES OF LAW. IN THE INSTANT CASE, IT IS SEEN THAT ADDITION IN RESPECT OF WHICH PENALTY HAS BEEN IMPOSED HAS BEEN MADE INVOKING THE DEEMING PROVISIO NS OF SECTION 43B OF THE IT ACT. THE APPELLANT, HAS INTER ALIA, P LACED RELIANCE ON THE DECISION OF HONBLE JURISDICTIONAL IN THE CASE OF CHIMAN LAL PATEL MANILAL PATEL VS ACIT IN ITA NUMBER 508/AHD/2010 FO R ASSESSMENT YEAR 2006 07 WHEREIN IT HAS BEEN HELD THAT PENALT Y CANNOT BE LEVIED ON THE BASIS OF DEEMING PROVISIONS OF THE IT ACT. RESPECTFULLY FOLLOWING THE JUDICIAL DECISIONS MENTIONED SUPRA, I T IS CONCLUDED THAT IMPOSITION OF PENALTY U/S. 271 (1) (C) WAS NOT WARR ANTED IN THIS CASE. CONSEQUENTLY, THE ACTION OF THE A. O. IMPOSING PENA LTY CANNOT BE SUSTAINED. THE GROUND OF APPEAL IS THEREFORE ALLOWE D. 3. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), TH E REVENUE IS NOW IN APPEAL BEFORE US RAISING THE FOLLOWING EFFEC TIVE GROUND:- (1). THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.7,85,910/- LEVIED U/S. 271 (1) (C ) O F THE ACT WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE FINDINGS BROUGHT OUT BY THE AO. 4. BEFORE US THE LEARNED DR RELIED ON THE ORDER OF THE LEARNED AO. ON THE OTHER HAND, THE LEARNED AR REITERATED THE SU BMISSION MADE BEFORE THE LEARNED CIT(A) AND SUPPORTED THE ORDER O F THE LEARNED CIT(A). ITA NO.2614/AHD/2012 (AY: 2007-08) THE ACIT (OSD) CIR-10, AHMEDABAD VS M/S. SOLSON EXIM 3 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. THE FACTUAL MATRIX OF THE CASE IS THAT W HILE FINALIZING THE ASSESSMENT U/S 143 (3) OF THE ACT, THE LEARNED AO M ADE ADDITION ON ACCOUNT OF CLAIM OF INTEREST U/S 43B OF THE ACT. TH E LEARNED AO WAS OF THE VIEW THAT CONVERSION OF OUTSTANDING INTEREST OF RS.23,81,528/- INTO NEW LOAN CANNOT BE CLAIMED AS INTEREST EXPENSES AND ACCORDINGLY HE DISALLOWED THE SAME U/S 43B OF THE ACT. IT IS ON TH E AFORESAID ADDITION, THE LEARNED AO LEVIED PENALTY U/S 271 (1) (C) OF TH E ACT. THE LEARNED CIT(A) WHILE DELETING THE PENALTY HAS HELD THAT PEN ALTY HAS BEEN LEVIED ON THE ADDITION MADE BY INVOKING THE DEEMING PROVISION OF SECTION 43B OF THE ACT. HE ALSO RELIED ON THE DECIS ION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CHIMANLAL PATEL M ANILAL PATEL VS ACIT IN ITA NO.508/AHD/2010. BEFORE US, THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON CONTRARY NOR ANY CONTRARY D ECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A) AND THUS UPHOL D HIS ORDER. THE GROUND OF APPEAL OF THE REVENUE IS THUS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-08-2013. SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (ANIL CHATURVEDI) ACCOUNTANT MEMBER LAKSHMIKANTA DEKA/- ITA NO.2614/AHD/2012 (AY: 2007-08) THE ACIT (OSD) CIR-10, AHMEDABAD VS M/S. SOLSON EXIM 4 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 20-08-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 20-08-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: