The ACIT, Circle-4, Baroda V. The Spunpipe & Construction Co. (Baroda) Pvt. Ltd., Baroda

ITA 286/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8474 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 04-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH
• Section: 27

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.286 AND 287/AHD/2016 / ASSTT. YEAR: 2008-2009 AND 2009-2010 ACIT, CIR.2(1)(1) BARODA. VS. THE SPUNPIPE & CONSTRUCTION CO. (BARODA) PVT.LTD. A-505-506, 5 TH FLOOR, ALKAPURI ARCADE OPP: HOTEL WELCOME GROUP R.C.DUTT ROAD, BARODA. PAN : AAACU 6551 F ( APPLICANT ) ( RESPONENT ) REVENUE BY : SHRI SAURABH SINGH, SR.DR ASSESSEE BY : SHRI BHADRESH GANDHAKWALA & SHRI DHINAL SHAH / DATE OF HEARING : 10/04/2018 / DATE OF PRONOUNCEMENT: 10 /04/2018 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THESE TWO APPEALS ARE BY REVENUE AGAINST ORDERS OF LD.CIT(A)-2, BARODA BOTH DATED 16.11.2015 PASSED FOR ASSTT.YEARS 2008-09 AND 2009-10. IN BOTH THE APPEALS, REVENUE IS AGGRIEVED BY ACTION OF THE LD.CIT(A) IN DELETING PENALTY IMPOSED BY THE AO UNDER SECTION 27 1(1)(C) OF THE INCOME TAX ACT,1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF ENGINEERING GOODS AND REAL ESTATE. IT HAS FILED HIS RETURN OF INCOME ON 30.9.2010 DECLARING TOTAL INCOME AT RS.2, 30,42,790/- WHICH WAS REVISED BY THE ASSESSEE ON 20.11.2009 AT RS.2,31,27 ,140/-. THE CASE OF THE ITA NO.286 AND 287/AHD/2016 2 ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND R EQUISITE NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE AS SESSMENT PROCEEDINGS, IT HAS BEEN NOTICED BY THE AO THAT ASSESSEE HAS SHOWN CAPITAL GAIN OF RS.2,19,05,070 FOR ASSTT.YEAR 2007-08 AND RS.32,08, 825/- FOR THE ASSTT.YEAR 2009-10 FROM SALE OF FACTORY LAND. EARLIER THE SAI D LAND WAS TAKEN ON RENT FROM 1945 AND IN THE YEAR 1994 THE ASSESSEE PURCHAS ED THE SAME. THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54G OF THE ACT IN RESPECT OF CAPITAL GAINS DERIVED ON SALE OF LAND. FROM THE EXPLANATIO N AND DOCUMENTS FURNISHED BY THE ASSESSEE IN RESPONSE TO SHOW CAUSE NOTICE IS SUED BY THE AO TO SUBSTANTIATE ITS CLAIM UNDER SECTION 54G, THE AO WA S NOT SATISFIED WITH THE CLAIM OF THE ASSESSEE AND OBSERVED THAT THE LAND WA S NOT USED FOR ITS BUSINESS OF INDUSTRIAL UNDERTAKING OF THE ASSESSEE, BUT FOR THE PURPOSE OF DEVELOPER AND THAT THE BENEFIT OF DEDUCTION FROM THE CAPITAL GAIN WAS AVAILABLE ONLY IN A CASE WHERE ANY LAND, MACHINERY OR PLANT USED FOR TH E PURPOSE OF THE BUSINESS OF AN INDUSTRIAL UNDERTAKING. THUS, ACCORDING TO T HE AO, SINCE THE ASSESSEE DID NOT MEET REQUIREMENT OF SECTION 54G, HE REJECTE D THE CLAIM OF THE ASSESSEE AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE LD.CIT(A) UPHELD THE ORDER OF THE AO. 3. WHEN THE ISSUE TRAVELLED TO THE TRIBUNAL, THE TR IBUNAL DELETED THE IMPUGNED ADDITION AND SET ASIDE BOTH ORDERS OF THE REVENUE AUTHORITIES AND ALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 54G OF THE ACT. 4. DURING THE PENDENCY OF QUANTUM PROCEEDINGS BEFOR E THE TRIBUNAL, THE AO IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE A CT AGAINST THE ASSESSEE, WHICH WAS, HOWEVER, DELETED BY THE LD.CIT(A) BY HOL DING THAT NO CASE HAS BEEN MADE OUT BY THE REVENUE AGAINST THE ASSESSEE F OR FURNISHING INACCURATE PARTICULARS OF INCOME IN ORDER TO JUSTIFY IMPOSITIO N OF THE PENALTY UNDER ITA NO.286 AND 287/AHD/2016 3 SECTION 271(1)(C) OF THE ACT. AGGRIEVED REVENUE IS NOW BEFORE US AGAINST THE ACTION OF THE AO IN SETTING ASIDE ORDER UNDER SECTI ON 271(1)(C). 5. AT THE VERY OUTSET, THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT ADDITION MADE BY THE AO WAS DELETED BY THE TRIBUNAL VIDE ORDER DATED 22.06.2016 PASSED IN ITA NO.2932/AHD/2011 AND 2482/ AHD/2012. HE PLACED ON RECORD COPY OF THE TRIBUNALS ORDER. THE LD.DR DID NOT CONTEST THIS SUBMISSION OF THE LD.COUNSEL. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. WE FIND THAT S UB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN , BUT WHI CH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSE E. SINCE BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGU ISHED BY DELETION OF THE ADDITION BY THE TRIBUNAL VIDE ABOVE ORDER OF THE TR IBUNAL DATED 22.06.2016, THEREFORE, THERE CANNOT BE ANY PENALTY UPON THE ASS ESSEE UNDER SECTION 271(1)(C) OF THE ACT, AND ACCORDINGLY, WE DO NOT DI STURB ORDER OF THE LD.CIT(A) IN SETTING ASIDE THE IMPUGNED ORDER OF TH E AO. WE ACCORDINGLY DISMISS BOTH APPEALS OF THE REVENUE. 7. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 10 TH APRIL, 2018 AT AHMEDABAD. SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 10/04/2018