M/s. MRK Packaging, Ahmedabad V. The ACIT, Circle-6, Ahmedabad

ITA 2852/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8491 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 22-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Corroborative evidences
• Section: 80IB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA.NO.2852/AHD/2014 / ASSTT.YEAR : 2010-11 M/S.MRK PACKAGING C/O. RAMESH N. PATHAK, CA 70, VARDHAMAN NAGARSOLA ROAD GHATLODIA AHMEDABAD 380 061. PAN : AAKFM 0902 B VS ACIT, CIR.6 AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N.DIVETIA, AR REVENUE BY : SHRI K. MADHUSUDAN, SR.DR / DATE OF HEARING : 14/08/2017 / DATE OF PRONOUNCEMENT: 13/09/2017 !'/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF LD.CIT(A)- XI, AHMEDABAD DATED 12.8.2014 PASSED FOR THE ASSTT. YAR 2010-11. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.3,31,782/- LEVIED UNDE R SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. ITA NO.2852/AHD/2014 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 29.9.2010 DECLARING TOTAL INCOME AT RS.46,62,200 /-. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE H AS CLAIMED DEDUCTION UNDER SECTION 80IB AMOUNTING TO RS.15,54,066/- WHICH IS 2 5% OF THE PROFITS AND GAINS OF THE INDUSTRIAL UNDERTAKING. ON A DEEPER S CRUTINY IT REVEALED TO THE AO THAT THE ASSESSEE HAS INCLUDED A SUM OF RS.5,22, 633/- WHICH REPRESENTED SALE OF DEPB LICENCE, DEPB EXCISE CREDIT AND INTERE ST ON FD. THE AO WAS OF THE VIEW THAT IN VIEW OF THE HONBLE SUPREME COU RTS DECISION IN THE CASE OF LIBERTY INDIA LTD., 293 ITR 522 DEDUCTION ON SAL E OF DEPB LICENCE AND DEPB EXCISE CREDIT ETC. IS NOT ADMISSIBLE TO THE AS SESSEE. ACCORDINGLY, ADDITION OF RS.5,22,633/- WAS MADE TO THE TOTAL INC OME OF THE ASSESSEE. PENALTY PROCEEDINGS HAS BEEN INITIATED UNDER SECTIO N 271(1)(C) OF THE ACT AGAINST THE ASSESSEE QUA THIS ADDITION. SIMILARLY, THE LD.AO HAS MADE DISALLOWANCE OUT OF PUBLIC RELATION EXPENSES OF RS. 4,89,355/- AND OUT OF ELECTRICITY EXPENSES DISALLOWANCE OF RS.61,740/- WA S ALSO MADE. ALL THESE AMOUNTS HAVE BEEN CONSIDERED BY THE AO FOR VISITING THE ASSESSEE WITH PENALTY. 4. AFTER HEARING THE ASSESSEE, THE LD.AO HAS IMPOSE D PENALTY OF RS.3,31,782/-. HE WAS OF THE OPINION THAT THE ASSE SSEE HAS CONCEALED PARTICULARS OF INCOME TO THE EXTENT OF RS.10,73,728 /-, ON WHICH TAX ALLEGED TO BE EVADED BY THE ASSESSEE IS OF RS.3,31,782/-. APP EAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT THE ASSESSEE HAS NOT CONCEALED PARTICULARS OF INCOME. IT HAS DI SCLOSED ALL THE PARTICULARS FULLY AND TRULY. ON THE STRENGTH OF HONBLE SUPREM E COURTS DECISIONS, THE LD.AO DID NOT ALLOW THE DEDUCTION UNDER SECTION 80I B OF THE ACT. ITA NO.2852/AHD/2014 3 SO FAR AS OTHER TWO EXPENDITURES ARE CONCERNED, THE SE WERE DISALLOWED TO THE ASSESSEE ON ADHOC BASIS. THE ASSESSEE COULD NOT PRODUCE SUPPORTING VOUCHERS WITH REGARD TO THE EXPENDITURE INCURRED FO R PUBLIC RELATION. 6. THE LD.DR, ON THE OTHER HAND, CONTENDED THAT ONC E THE CONTROVERSY WAS SETTLED BY THE HONBLE SUPREME COURT BY WAY OF DECI SION IN THE CASE OF LIBERTY INDIA LTD. (SUPRA), THE ASSESSEE SHOULD NOT HAVE CLAIMED THE DEDUCTION UNDER SECTION 80IB OF THE ACT ON SALE OF DEPB LICEN CE. HE POINTED OUT THAT DECISION IN THE CASE OF LIBERTY INDIA LTD. (SUPRA) CAME ON 31.8.2009 WHEREAS THE RETURN WAS FILED ON 29.9.2010. 7. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT HON BLE SUPREME COURT HAS SILENCED THE CONTROVERSY, WHETHER ON SALE OF DEPB L ICENCE, DEPB EXCISE CREDIT ETC. DEDUCTION UNDER SECTION 80IB WOULD BE A DMISSIBLE OR NOT. THIS DECISION WAS DELIVERED ON 31.8.2009 I.E. ALMOST ONE YEAR BEFORE THE FILING OF THE RETURN. AUDITOR OF THE ASSESSEE HAS DULY SPECI FIED IN THE ACCOUNTS THAT DEDUCTION UNDER SECTION 80IB WOULD NOT BE ADMISSIBL E ON THESE RECEIPTS. THE LD.AO HAS CONFRONTED THE ASSESSEE DURING THE ASSESS MENT PROCEEDINGS ABOUT REMARK OF THE AUDITOR AND HOW THE ASSESSEE HAS CLAI MED THIS DEDUCTION. THE ASSESSEE DID NOT WITHDRAW ITS CLAIM AND DID NOT HEE D TO THE AUDITOR. THERE IS NO PLAUSIBLE EXPLANATION AS TO HOW THE ASSESSEE HAS COMMITTED A BONA FIDE MISTAKE FOR INCLUDING THESE RECEIPTS IN THE ADMISSI BLE DEDUCTION. TO OUR MIND, THERE IS NO PLAUSIBLE EXPLANATION AT THE END OF THE ASSESSEE. THEREFORE, THE LD.REVENUE AUTHORITIES ARE JUSTIFIED IN LEVYING PENALTY QUA THE DISALLOWANCE OF DEDUCTION ON SALE OF DEPB LICENCE A ND DEPB EXCISE CREDITS MADE UNDER SECTION 80IB OF THE ACT. ITA NO.2852/AHD/2014 4 8. AS FAR AS OTHER TWO ADDITIONS ARE CONCERNED, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD NOT BE VISITED WITH PENALTY BECAUSE ONE OF THE ADDITIONS IS ADHOC DISALLOWANCE I.E. OUT OF ELECTRICITY EXPENSES. AS FAR AS ADDITION OF RS.4,89,355/- IS CONCERNED, THE ASSESSEE HAS DULY D ISCLOSED THE DETAILS, BUT IT FAILED TO SUBMIT SUPPORTING VOUCHERS. THE ASSESSEE CANNOT BE TERMED TO HAVE CONCEALED PARTICULARS OF INCOME QUA AN EXPENDITURE WHICH OTHERWISE WOULD BE ADMISSIBLE IF SUPPORTING EVIDENCE COULD BE FILED BY IT. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES ON THE RE CORD, WE ALLOW THE APPEAL OF THE ASSESSEE PARTLY. CONFIRM PENALTY QUA THE ADDITION OF RS.5,22,633/- (RUPEES FIVE LAKHS TWENTY TWO THOUSAND SIX HUNDRED THIRTY THREE) AND DELETE PENALTY QUA THE ADDITION OF RS.4,89,355/- AND ADDITION OF RS.6 1,740/-. THE LD.AO SHALL GIVE EFFECT TO THIS ORDER ACCORDING LY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 13 TH SEPTEMBER, 2017 AT AHMEDABAD. SD/- SD/- ( PRAMOD KUMAR ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER