Appeal details
Counselvise Citation
[2017] 128 COUNSELVISE.COM (IT) 0414 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 1 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
13-06-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
E
Assessment Year
1992-1993
Appeal Filed On
11-05-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2785 /MUM/2015 (ASSESSMENT YEAR: 1992-93) A C I T - 14(2)(2) VS. NUTRINE CONFECTIONERY CO. P. LTD. ROOM NO. 432, 4TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 M/S. K.R. PRASADS, ADVOCATES BHARAT APARTMENTS, GR. FLOOR 44/1A&B, FAIRFIELD LAYOUT RACE COURSE ROAD, BANGALORE PAN AAACN4838N APPELLANT RESPONDENT CO NO.216 /MUM/2016 (ASSESSMENT YEAR: 1992-93) NUTRINE CONFECTIONERY CO. P. LTD. VS. A C I T - 14(2)(2) M/S. K.R. PRASADS, ADVOCATES BHARAT APARTMENTS, GR. FLOOR 44/1A&B, FAIRFIELD LAYOUT RACE COURSE ROAD, BANGALORE ROOM NO. 432, 4TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 CROSS OBJECTOR APPELLANT IN APPEAL REVENUE BY: DR. A.K. NAYAK ASSESSEE BY: SHRI A.A. KULKARNI DATE OF HEARING: 13.06.2017 DATE OF PRONOUNCEMENT: 13.06.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-22, MUMBAI DATED 06.02.2015 FOR A.Y. 1992-93. 2. THE ISSUE INVOLVED IN THE APPEAL FILED BY THE REVEN UE RELATES TO DELETION OF THE PENALTY AMOUNTING TO RS.52,78,500/- BY THE CIT(A). 3. THE FACTS RELATING THE TO ISSUE ARE THAT THE ASSESS EE HAS PURCHASED BOILER FROM M/S. VXL INDIA LTD. FOR RS.1,02,00,000/ - AND CLAIMED ITA 2785/M/2015 & COM 216/M/2016 NUTRINE CONFECTIONERY CO. P. LTD. 2 DEPRECIATION @ 100%. THE SAME BOILER WAS LEASED BAC K TO M/S. VXL INDIA LTD. FOR WHICH THE ASSESSEE RECEIVED RENTAL INCOME WHICH WAS ACCOUNTED FOR PROPERLY BY THE ASSESSEE. THE ASSESSEES CLAIM FOR DEPRECIATION WAS ALLOWED IN THE ORIGINAL ASSESSMENT. ASSESSMENT WAS REOPENED UNDER SECTION 147 OF THE INCOME TAX ACT BUT THE AO TREATED THE SAME AS S HAM TRANSACTION AND DISALLOWED DEPRECIATION TO THE ASSESSEE. THE CIT(A) UPHELD THE ORDER OF THE AO. HOWEVER, THE ITAT DELETED THE ADDITION. SUBSEQU ENTLY REVENUE WENT IN APPEAL BEFORE THE HON'BLE HIGH COURT. THE HON'BLE H IGH COURT HAS ADMITTED THE SUBSTANTIAL QUESTION OF LAW. IN THE MEANTIME TH E AO LEVIED PENALTY ON THE ASSESSEE UNDER SECTION 271(1)(C) WHICH WAS UPHE LD BY THE CIT(A). 4. WE HEARD THE RIVAL CONTENTIONS AND CAREFULLY CONSID ERED THE MATERIAL ON RECORD. THE ONLY ISSUE BEFORE US IS WHETHER THE CLAIM MADE BY THE ASSESSEE WAS BONAFIDE CLAIM. IT IS NOT DENIED THAT THE SUBSTANTIAL QUESTION IN THIS CASE HAS BEEN ADMITTED BY THE HON'BLE HIGH COURT. ONCE THE HIGH COURT HAS ADMITTED A SUBSTANTIAL QUESTION OF LAW TH E ISSUE REMAINS DEBATABLE IN NATURE. SINCE THE ISSUE BECOMES DEBATA BLE IN NATURE, THEREFORE, THE CLAIM MADE BY THE ASSESSEE CANNOT BE REGARDED N OT TO BE A BONAFIDE CLAIM. WE, THEREFORE, AGREE WITH THE FOLLOWING FIND INGS OF THE CIT(A): - 3.3 I HAVE CONSIDERED APPELLANTS SUBMISSIONS. THE FACTS OF THIS CASE IS DISCUSSED ABOVE. IN THIS CASE IT IS CLEAR T HAT HON'BLE HIGH COURT HAD ALLOWED REVENUES APPEAL CONSIDERING THE ABOVE AS SUBSTANTIAL QUESTION OF LAW AND HON'BLE HIGH COURT PASSED THE O RDER RESTORING THE MATTER BACK TO THE ITAT FOR PASSING FRESH ORDER. FR OM THE FACTS OF THE CASE AND SUBMISSIONS, IT IS CLEAR THAT HON'BLE HIGH COURT HAD ADMITTED THIS CASE OF SUBSTANTIAL QUESTION OF LAW. IN SUCH A SITUATION, WHERE THERE IS SUBSTANTIAL QUESTION OF LAW, IT IS HELD TH AT ISSUE WILL BECOME DEBATABLE IN VIEW OF DELHI HIGH COURTS DECISION IN THE CASE OF CIT VS. LIQUID INVESTMENT LTD. 240/2009 AND ALSO SUPREME COURT DECISION IN THE CASE OF SANTOSH HOSIERY 1117 OF 2001 WHEREIN IT IS HELD THAT SUBSTANTIAL QUESTION OF LAW MUST BE DEBATABLE IN N ATURE. IN THIS CASE, HON'BLE HIGH COURT HAD ADMITTED THE CASE AS SUBSTAN TIAL QUESTION OF LAW AND THIS HAS BECOME DEBATABLE IN NATURE. WHEN A N ISSUE IS DEBATABLE IN NATURE, LEVYING OF PENALTY IS NOT POSS IBLE. HENCE, PENALTY LEVIED IS CANCELLED. 5. IN OUR OPINION THE FINDING OF THE CIT(A) DOES NOT W ARRANT OUR INTERFERENCE. ACCORDINGLY WE CONFIRM THE ORDER OF T HE CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. ITA 2785/M/2015 & COM 216/M/2016 NUTRINE CONFECTIONERY CO. P. LTD. 3 6. SINCE WE HAVE DISMISSED THE APPEAL FILED BY THE REV ENUE, THEREFORE, THE CROSS OBJECTION FILED BY THE ASSESSEE BECOMES I NFRUCTUOUS. 7. IN THE RESULT, THE BOTH THE APPEAL FILED BY REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JUNE, 2017. SD/ - SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 13 TH JUNE, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -22, MUMBAI 4. THE CIT - 14, MUMBAI 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.
