Skaps Industries India Pvt.Ltd., Ahmedabad V. The CIT(Appeal)-I, Ahmedabad

ITA 2642/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9809 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-11-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 12-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 80G

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.2642/AHD/2013 ( / ASSESSMENT YEAR : 2006-07) SKAPS INDUSTRIES INDIA PVT.LTD. PLOT NO.20, SURVEY NO.423 AHMEDABAD BAVLA HIGHWAY MAHAGUJARAT IND.ESTATE MORAIYA, SANAND, AHMEDABAD / VS. THE COMMISSIONER OF INCOME TAX-I AHMEDABAD $ ./ ./ PAN/GIR NO. : AADCP 2779 D ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI VINIT MOONDRA, AR ($'*) / RESPONDENT BY : SHRI K. MADHUSUDAN, SR.DR +,*- / DATE OF HEARING 21/11/2016 ./0*- / DATE OF PRONOUNCEMENT 15/12/2016 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE CAPTIONED APPEAL IS PREFERRED BY THE ASSESSEE A GAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-I, AHMED ABAD [CIT(A) IN SHORT] DATED 27/09/2013PASSED UNDER SECTION 271(1) (C) OF THE ACT FOR THE ITA NO.2642/AHD /2013 SKAPS INDUSTRIES PVT.LTD. VS. CIT(A) ASST.YEAR 2006-07 - 2 - ASSESSMENT YEAR (AY)2008-09 WHICH IN TURN AROSE OUT OF THE ORDER OF THE ASSESSING OFFICER (AO) UNDER SECTION 271(1)(C) DATED 23/01/2013. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER:- 1. IN HIS ORDER DATED 23/01/2013, THE LD.AO HAS ERRED IN LAW BY LEVYING CONCEALMENT PENALTY U/S.271(1)(C) ON ADDITION OF RS .19000/- ON ACCOUNT OF DONATION EXPENSE WITHOUT ESTABLISHING THAT THE ASSE SSEE HAD CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E, AND WITHOUT GIVING MERITS TO THE FACTS OF THE CASE AND REAL NATURE OF TRANSACTIONS INVOLVED. 2. IN HIS ORDER DATED 23/01/2013, THE LD.AO HAS ERRED IN LAW BY LEVYING PENALTY ON ADDITION OF RS.2,93,323/- ON ACCOUNT OF FOREIGN EXCHANGE LOSS ON CAPITAL ASSETS WITHOUT ESTABLISHING THAT THE ASS ESSEE HAD CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E, AND WITHOUT GIVING MERITS TO THE FACTS OF THE CASE AND REAL NATURE OF TRANSACTIONS INVOLVED. 3. BRIEFLY STATED, THE AO IN THE SCRUTINY PROCEEDI NGS UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS 'THE ACT') DISALLOWED THE CLAIM OF DEDUCTION OF THE ASSESSEE U NDER SECTION 80G IN RESPECT OF DONATION MADE AMOUNTING TO RS.19,000/- O N THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING DOCUM ENTS TO PROVE ITS CLAIM. AS A SEQUEL THERETO, THE AO IMPOSED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME UNDER SECTION 271( 1)(C) OF THE ACT. IN FIRST APPEAL, THE CIT(A) CONFIRMED THE ACTION OF TH E AO. THE ASSESSEE HAS PREFERRED APPEAL AGAINST THE IMPUGNED ORDER OF CIT(A) SUSTAINING THE PENALTY IMPOSED BY THE AO BEFORE THE TRIBUNAL. 4. WITH THE ASSISTANCE OF THE LD.AR FOR THE ASSESSE E, WE NOTE THAT THE ASSESSEE HAS FILED A RETURN OF LOSS OF RS.46,71,710 /- AND THEREFORE THERE ITA NO.2642/AHD /2013 SKAPS INDUSTRIES PVT.LTD. VS. CIT(A) ASST.YEAR 2006-07 - 3 - BEING NO PROFIT, THE ASSESSEE HAS NOT AVAILED ANY U NDUE ADVANTAGE FROM THE REVENUE BY MAKING THE AFORESAID CLAIM. SECONDL Y, THE PAYMENT TOWARDS DONATION HAS BEEN MADE BY WAY OF CHEQUE FOR WHICH THE SUPPORTING DOCUMENTS COULD NOT BE PRODUCED STATED T O BE DUE TO TIME LAG. ON THESE FACTS, WE DO NOT FIND ANY JUSTIFIABLE REAS ON FOR EXPOSING THE ASSESSEE TO ONEROUS PROVISIONS OF PENALTY UNDER SEC TION 271(1)(C) OF THE ACT. NEEDLESS TO SAY, THE PENALTY PROCEEDINGS CON TEMPLATED UNDER SECTION 271(1)(C) OF THE ACT ARE NOT AUTOMATIC CONS EQUENCE OF ADDITIONS/DISALLOWANCES IN THE QUANTUM PROCEEDINGS BUT IS DEPENDENT ON FACTS AND THE CIRCUMSTANCES OF A GIVEN CASE. THE ASSESSEE HAVING PAID THE AMOUNT BY CHEQUE AS WELL AS FILED THE RETURN AT LOSS ONLY REINFORCES THE TRACES OF BONAFIDES IN THE ACTION OF THE ASSES SEE. THE FALSITY IN CLAIM IS APPARENTLY ABSENT. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE REVENUE. THE GROUND NO.1 IS THUS ALLOWED . 5. AS PER GROUND NO.2, THE ASSESSEE HAS ASSAILED TH E IMPOSITION OF PENALTY ON AN ADDITION OF RS.2,93,323/- ON ACCOUNT OF FOREIGN EXCHANGE LOSS ON CAPITAL ASSETS. 6. ON CONSIDERATION OF RIVAL SUBMISSIONS, WE FIND T HAT THE ADDITION IN QUANTUM APPEAL WAS INITIALLY ACCEPTED BY THE CIT(A) IN FAVOUR OF ASSESSEE WHICH WAS HOWEVER DECIDED AGAINST THE ASS ESSEE BY THE COORDINATE BENCH OF THE ITAT IN ITA NO.588/AHD/2011 FOR AY 2006- 07 ORDER DATED 04/05/2012. IN THE CIRCUMSTANCES, W E FIND THAT THE ISSUE ITA NO.2642/AHD /2013 SKAPS INDUSTRIES PVT.LTD. VS. CIT(A) ASST.YEAR 2006-07 - 4 - WAS CLEARLY DEBATABLE AT RELEVANT TIME WHERE THE IN TERPRETATION OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. WOODWARD GOVERNOR INDIA (P.) LTD. &ORS. REPORTED IN (2007) 294 ITR 451 (DELHI) WAS INVOLVED. THE PARTICULARS OF CLA IM WERE NOT ALLEGED TO BE INACCURATE PER SE . THUS, IN VIEW OF THE DECISION OF THE CIT VS. RELIANCE PETROPRODUCTS (P) LTD. REPORTED IN (2000) 322 ITR 158 (SC), WE HOLD THAT NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE LEVIED MERELY BECAUSE THE CLAIM MADE BY THE ASSESSEE WAS N OT FOUND TENABLE BY THE REVENUE. HENCE, WE FIND MERIT IN THE PLEA O F THE ASSESSEE AND ALLOW THE GROUND RAISED IN THIS REGARD. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 15/12/2016 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 15/ 12 /2016 4..+,.+../ T.C. NAIR, SR. PS ITA NO.2642/AHD /2013 SKAPS INDUSTRIES PVT.LTD. VS. CIT(A) ASST.YEAR 2006-07 - 5 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-I, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 14.12.16 (DICTATION-PAD 9- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 14.12.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.15.12.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 16.12.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER