DCIT, New Delhi V. M/s. Hero Motocorp Ltd., New Delhi

ITA 2770/DEL/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9367 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KUMAR HRISHIKESH
• Keywords: Question of law; Difference of opinion
• Section: 271(1)(c); 143(3); 80HHC

Judgement Text

ITA NSO. 4410/DEL/2014 & 2770DEL/2015 A.YS. 2003-04 & 2006-07 HARI MOTOCORP LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: C, NEW DELHI BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 4410/DEL/2014 AY: 2003-04 HARI MOTOCORP LTD. 34, COMMUNITY CENTRE, BASANT LOK, VASANT VIHAR, NEW DELHI. AAACH0812J VS . ACIT CIRCLE 12(1) NEW DELHI. (APPELLANT) (RESPONDE NT) & ITA NO. 2770/DEL/2015 AY: 2006-07 DCIT CIRCLE 11(1) NEW DELHI. VS . HERO MOTOCORP LTD. 34, BASANT LOK, VASANT VIHAR, NEW DELHI. AAACH0812J (APPELLANT) (RESPONDE NT) ASSESSEE BY : SH. GAURAV JAIN, ADV. REVENUE BY : SH. KUMAR HRISHIKESH, CIT DR DATE OF HEARING : 04/12/2018 DATE OF PRONOUNCEMENT : 19/12/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT PENALTY APPEALS HAVE BEEN FILED BY ASSESSEE AGAINST ORDER DATED 30/06/2014 AND 06/02/15 PASSED BY LD.CI T (A)-15, NEW DELHI FOR ASSESSMENT YEAR 2003-04 ON FOLLOWING GROUNDS OF APPEAL: ITA NSO. 4410/DEL/2014 & 2770DEL/2015 A.YS. 2003-04 & 2006-07 HARI MOTOCORP LTD. 2 GROUNDS OF ITA NO. 4410/DEL/2014 AY 2003-04 : 1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPHOL DING THE ACTION OF AO IN LEVYING PENALTY U/S 271(1)(C ) ON DISALLOWANCE OF DEDUCTION U/S 80IA MADE IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME TA X ACT, 1961 FOR ALLEGED FURNISHING OF INACCURATE PARTICULARS OF INCOME. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT(A) ERRED ON FACTS AND IN LAW IN NOT HOLDING THA T THE PENALTY ORDER DATED 21.03.2012 PASSED BY THE AO U/S 271(1)(C) OF THE ACT WAS BEYOND JURISDICTION, BAD I N LAW AND VOID AB INITIO, SINCE NO SATISFACTION QUA CONCEALMENT/FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF DISALLOWANCE MADE U/S 80IA WAS RECORDED IN THE ASSESSMENT ORDER, WHICH WAS SINE QU A NON FOR ASSUMPTION OF JURISDICTION FOR LEVYING PENA LTY U/S 271(1)(C ). 3. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN HOLDIN G THAT APPELLANT FURNISHED INACCURATE PARTICULARS OF INCOM E BY NOTIONALLY BOOKING PROFIT AFTER TAKING TARIFF RATE OF RS. 5,92,PER UNIT ARBITRARILY AS AGAINST THE PREVAILING MARKET TARIFF OF POWER CHARGED BY HSEB. 3.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT NO INCORRECT FACTS RELATING TO TH E CLAIM OF DEDUCTION WERE DISCLOSED BY THE APPELLANT AND DISALLOWANCE WAS MADE SIMPLY ON THE BASIS OF BONA FIDE DIFFERENCE OF OPINION. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, AMEND OR VARY FROM THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE T IME OF HEARING. GROUNDS OF ITA NO. 2770/DEL/2015 AY 2006-07 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) RIGHT IN IGNORING THE FA CT THAT THE HONBLE ITAT HAS ALREADY CONFIRMED THE DISALLOWANCE OF DEDUCTION U/S 80IA. ITA NSO. 4410/DEL/2014 & 2770DEL/2015 A.YS. 2003-04 & 2006-07 HARI MOTOCORP LTD. 3 2. THE APPELLANT CRAVES LEAVE, TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : ASSESSEE IS A COMPANY ENGAGED IN MANUFACTURING AND SALE OF MOTORCYCLES. IN ORDER PASSED BY LD.AO UNDER SECTION 143 (3) OF THE ACT, SEVERAL ADDITIONS WERE MADE TO TOTAL INCOM E. ON DISALLOWANCE OF DEDUCTION UNDER SECTION 80-IA AND S ECTION 80HHC OF THE ACT, ADDITIONS WERE UPHELD BY LD.CIT ( A). LD.AO ACCORDINGLY, ISSUED NOTICE UNDER SECTION 274 OF THE ACT, FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 3. AGGRIEVED BY PENALTY ORDER PASSED BY LD.AO, ASS ESSEE PREFERRED APPEAL BEFORE LD.CIT(A), WHO UPHELD PENAL TY ON ACCOUNT OF DISALLOWANCE UNDER SECTION 80-IA. 4. AGGRIEVED BY ORDER OF LD.CIT (A), ASSESSEE IS I N APPEAL BEFORE US NOW. 5. LD. COUNSEL SUBMITTED THAT HONBLE DELHI HIGH COURT IN ITA NO. 45/2014 AND ITA NO. 342/2014 VIDE ORDER DATED 28/017/15 AND 19/11/15 RESPECTIVELY, ADMITTED QUESTION OF LAW IN RESPECT OF ADDITION, ON WHICH PENALTY HAS BEEN C ONFIRMED BY LD.CIT(A). THE QUESTION OF LAW AS FRAMED BY HONBLE HIGH COU RT IS AS UNDER: 1. WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS RIGH T IN DISALLOWING THE CLAIM UNDER SECTION 80 IA OF THE IN COME TAX ACT, 1961 FOR VIOLATION OF SUBSECTION (8). 2. ITA NSO. 4410/DEL/2014 & 2770DEL/2015 A.YS. 2003-04 & 2006-07 HARI MOTOCORP LTD. 4 6. THE ABOVE REFERRED ORDERS PASSED BY HONBLE HIG H COURT ADMITTING THE QUESTION OF LAW IS PLACED AT PA GES 154-157 OF PAPER BOOK. 7. LD. COUNSEL PLACED RELIANCE ON ORDER DATED 05/10/10 PASSED BY HONBLE DELHI HIGH COURT IN CASE OF CIT VS LIQUID INVESTMENT AND TRADING CO., IN ITA NO. 240/2009, AND SUBMITTED THAT, ADMISSION OF ISSUE ON WHICH PENALTY HAS BEEN LEVIED WOULD MAKE IT APPARENT THAT, SUCH ADDITION MADE IS DEBATA BLE. 8. ON CONTRARY, LD. DR PLACE RELIANCE ON ORDERS OF AUTHORITIES BELOW. 9. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. 9.1 IT IS A CASE WHERE PENALTY IS LEVIED, ON A ISS UE, IN RESPECT OF WHICH HONBLE DELHI HIGH COURT IN ASSESSEES OWN CASE FOR RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION, H AS FRAMED SUBSTANTIAL QUESTION OF LAW. IT THUS BECOMES APPARE NT THAT ADDITION IS DEBATABLE. 10. WE DRAW SUPPORT IN RESPECT OF AFORE STATED VIE W FROM ORDER DATED 05/10/10 PASSED BY HONBLE DELHI HIGH COURT IN CASE OF CIT VS LIQUID INVESTMENT AND TRADING CO., (SUPRA) . WE ARE, THEREFORE, INCLINED TO DELETE THE PENALTY. ACCORDINGLY GROUNDS RAISED BY ASSESSEE STANDS ALLOW ED. IN THE RESULT APPEAL FILED BY THE ASSESSEE STANDS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/12/2018 SD/- SD/- (N.K. SAINI) (BEENA A PILLAI) VICE PRESIDENT JUDIC IAL MEMBER DT. 19/12/2018 ITA NSO. 4410/DEL/2014 & 2770DEL/2015 A.YS. 2003-04 & 2006-07 HARI MOTOCORP LTD. 5 *KAVITA ARORA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA NSO. 4410/DEL/2014 & 2770DEL/2015 A.YS. 2003-04 & 2006-07 HARI MOTOCORP LTD. 6 DATE DRAFT DICTATED ON 14/12/18 DRAFT PLACED BEFORE AUTHOR 14/12 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 20/12 KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : 19/12 20/12 FILE SENT TO THE BENCH CLERK 20/12 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.