ACIT, Ghaziabad V. Mascot (India) Tools & Foreign (P) Ltd, Ghaziabad

ITA 2882/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8090 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-05-2009
• Assessment Year: 1998-1999
• Appeal Filed On: 09-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S REHMAN
• Assessee Lawyers: R K KAPOOR
• Section: 271(1)(c); 80HHC; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `B : NEW DELHI) BEFORE HONBLE SR. VICE PRESIDENT SHRI R.P. GARG A ND HONBLE JUDICIAL MEMBER, SHRI A.D. JAIN ITA NO.2882/DEL./2008 (ASSESSMENT YEAR : 1998-99) ADDL.CIT, RANGE 2, VS. M/S MASCOT(INDIA) TOOLS & FO RGINGS P. LTD, NEW DELHI. A-2, MEERUT ROAD INDL. AREA, GHAZIABAD. (PAN/GIR NO.AAACM9655N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.K. KAPOOR, CA REVENUE BY : SHRI S. REHMAN, DR ORDER PER R.P. GARG, SR.VP THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 1998-99 IN DELETING THE PENALTY OF RS.4,20,276 IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE I.T. ACT. 2. IN THIS CASE, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WAS INITIATED BY THE ASSESSING OFFICER PASSED ON 31.1.2006 WITHDRAWING T HE BENEFIT ORIGINALLY MADE IN ASSESSMENT YEAR 1995-96 FROM SURPLUS FUNDS STATING THAT THE ASSESSEE WAS NETTING OFF INTEREST, WHICH HAD ACTUALLY BEEN EARNED BY THE ASS ESSEE BY PARKING SURPLUS FUNDS IN FDRS WITH BANK OF INDIA, G.T. ROAD, GHAZIABAD. THE ASSESSEE WAS ISSUED NOTICE U/S 148 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. T HE ASSESSEE DID NOT REVISE ITS ORIGINAL OF CLAIM UNDER SECTION 80HHC DESPITE THE FACT THAT IT HAD SURRENDERED THE NETTING OF INTEREST IN THE IMMEDIATELY PRECEDING YEAR. THEREF ORE, THE ASSESSING OFFICER CLAIMED THAT THE ASSESSEE COMPUTED IN ITS RETURN IN RESPON SE TO THE SAID NOTICE AND THE ASSESSEE CLAIMED EXCESS DEDUCTION OF RS.12,97,188 BY WAY OF NETTING OF INTEREST AS INCOME FROM OTHER SOURCES. ACCORDINGLY, A NOTICE U/S 271(1)(C) WAS ISSUED TO THE ASSESSEE ON ITA NO.2882/DEL./2008 (A.Y. : 1998-99) 2 21.2.2006. THE ADDL.CIT CONSIDERING THE MATERIAL ON RECORD, IMPOSED A PENALTY OF RS.4,20,276 ON THE ASSESSEE. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS) AFTER C ONSIDERING THE MATERIAL AND ARGUMENTS PLACED BEFORE HIM DELETED THE PENALTY BY OBSERVING THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE ASSE SSEE ALSO PLACED RELIANCE ON THE FOLLOWING CASE LAWS IN SUPPORT OF HIS CLAIM: (I) ADDL.CIT VS. DELHI CLOTH & GENERAL MILLS CO. LT D., 157 ITR 822 (DEL.) (II) CIT VS. BABU RAM AJIT KUMAR, 106 ITR 818(ALL.) 4. WE HAVE HEARD THE PARTIES AND CONSIDERED THE RI VAL SUBMISSIONS. IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE THAT THIS ISSUE IS COV ERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMEN T YEAR 2001-02 IN ITA NO.3369/DEL./2005 DATED 23.3.2007. HE ALSO SUBMIT TED A COPY OF THE ORDER OF THE TRIBUNAL IN WHICH OUR ATTENTION WAS DRAWN TO PARAS. NO.7 & 8 OF THE ORDER IN WHICH IT WAS DECIDED IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF LALSONS ENTERPRISE S AS REPORTED IN 89 ITD 25 (SB) AND THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COU RT RENDERED IN THE CASE OF SRI RAM HONDA POWER EQUIPMENT IN ITA NO.166/DEL./2000 DATED 12.1.2000. 5. SINCE THE ISSUE BEING SIMILAR, RESPECTFULLY FOLL OWING THE AFORESAID JUDGMENTS, WE DECIDE THE ISSUE IN FAVOUR OF HE ASSESSEE AND UPHOL D THE ORDER OF THE CIT(A) 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 7. ORDER PRONOUNCED IN OPEN COURT ON 12.05.2009. (A.D. JAIN) (R.P. GARG) JUDICIAL MEMBER SR. VICE PRESIDENT DATED: JUNE 30, 2009. ITA NO.2882/DEL./2008 (A.Y. : 1998-99) 3 *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-, GHAZIABAD. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT