ANKUR DRUGS & PHARMA LTD., MUMBAI V. ACIT CC-20, MUMBAI

ITA 2895/MUM/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6151 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 21-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RA J IV HARIT
• Keywords: Sale consideration of property below Jantri Value; Invalid notice; Depreciation; Unabsorbed depreciation
• Section: 271(1)(c); 143(3); 50C; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI BEFORE S HRI RAJESH KUMAR (AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 2895/MUM/2017 ASSESSMENT Y EAR: 2011 - 12 ANKUR DRUGS & PHARMA LTD., C - 306 , CRYSTAL PLAZA, ANDHERI LINK ROAD, ANDHERI (WEST), MUMBAI - 400053 PAN: AACCA2062M VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 20, MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY: NONE REVENUE BY : SHRI RAJIV HARIT ( CIT D R ) DATE OF HEARING: 05 / 03 /2020 DATE OF PRONOUNCEMENT: 20 / 04 /2020 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST THE ORDER DATED 17.01.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 51 (FOR SHORT THE CIT (A ) MUMBAI , FOR THE ASSESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. BRIE F FACTS OF THE CASE ARE THAT THE ASSESSEE A PUBLIC LIMITED COMPANY CARRYING ON BUSINESS OF CONTRACT MANUFACTURING OF PHARMACEUTICALS FORMULATION AND PRODUCTS AT HIS FACTORIES AT DAMAN AND BADDI, FILED ITS RETURN OF INCOME DECLAR ING NIL INCOME AND UNABSORBED DEPRECIATION OF RS. 103,65,30 ,317/ - . SINCE, THE CASE WAS SELECTED FOR SCRUTINY, THE AO ISSUED NOTICE U/S 143 (2) AND 142 (1) OF THE ACT CALLING FOR VARIOUS DETAILS. THE ASSESSEE LATER ON REVISED THE RETURN AND REDUCED THE UNABSORBED DEPRECIATION TO 74,00,17,005/ - . AO PASSED THE ASSESS MENT ORDER U/S 143(3) OF THE ACT AND 2 ITA NO. 2895 / MUM/2017 ASSESSMENT YEAR: 2011 - 1 2 MADE ADDITION OF RS. 32,64,09,115/ - ON ACCOUNT OF EXCESS CLAIMED AND RS. 15,10,060/ - U/S 50C OF THE ACT IN RESPECT OF A PROPERTY , STAMP VALUE WAS MORE THAN THE SALE AGREEMENT TO VALUE . ACCORDINGLY, THE ASSESSEE WAS ALL OWED TO CARRY FORWARD THE UNABSORBED DEPRECIATION OF RS. 41,15,20,627/ - . ON THE BASIS OF THE SAID ADDITIONS, THE AO LEVIED PENALTY U/S 271 (1) (C) OF THE ACT AMOUNTING TO RS. 10,89,26,551/ - . THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) CONFIRMED THE PENALTY ON ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION AND DELETED THE PENALTY IN RESPECT OF ADDITION U /S 50C OF THE ACT. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE ASSESSEE HAS CHALLEN GED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING EFFECTIVE GROUNDS : - 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 51, MUMBAI, PARTLY CONFIRMING THE ASSESSMENT ORDER PASSED U/S 271 (1) (C) OF THE INCOME TAX ACT, 19 61, IS BOTH BAD - IN - LAW AND BAD IN - FACTS. 2.0 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AS WELL IN FACTS IN PARTIALLY CONFIRMING THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER ON THE BASIS OF INVALID NOTICE ISSUED U/S 274 R.W. SECTION 271 (1) (C ) OF THE INCOME TAX ACT, 1961. PENALTY U/S 271 (1) (C) : RS. 10,84,24,947/ - 3.0 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY OF RS. 10,84,24,947/ - U/S 271 (1) (C) OF THE INCOME TAX ACT, 1961. 4. THIS APPEAL WAS FIXED FOR HEARING ON 05.03.2020. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE SAID DATE. WE NOTICE THAT THIS APPEAL HAS BEEN ADJOURNED FOR MORE THAN FIVE TIMES DUE TO NONE - APPEARANCE OF THE APPELLANT/ASSESSEE. FROM THE CO NDUCT OF THE ASSESSEE, WE ARE CON VINCED THAT THE ASSESSEE IS NO LONGER INTERESTED IN PURSUING ITS APPEAL. HENCE, WE DECIDED TO DISPOSE OF THE PRESENT APPEAL ON THE BASIS OF MATERIAL ON RECORD AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE (DR). ACCORDINGLY, WE ASKED THE LD. DR TO ARGUE ON BEHALF OF THE REVENUE. 5. THE LD. DR SUPPORTING THE ORDER PASSED BY THE LD. CIT (A) SUBMITTED THAT SINCE THE ASSESSEE HAD CONCEALED THE INCOME BY FURNISHING INACCURATE 3 ITA NO. 2895 / MUM/2017 ASSESSMENT YEAR: 2011 - 1 2 PARTICULARS, THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE PENALTY LEVIED BY THE A O IN RESPECT OF EXCESS CLAIM OF DEPRECIATION AMOUNTING TO RS. 32,64,09,115/ - MADE BY THE ASSESSEE. THE LD. DR FURTHER POINTED OUT THAT THE LD. CIT (A) HAS DELETED THE PENALTY IN RESPECT OF ADDITION OF RS. 15,10,060/ - U/S 50C HOLDING THAT SINCE THE ADDITION U/S 50C IS A TECHNICAL ADDITION, THE ASSESSEE IS NOT LIABLE FOR PENALTY U/S 271 (1) (C). THE LD. DR ACCORDINGLY SUBMITTED THAT THERE IS NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT (A) TO INTERFERE WITH. 6. WE HAVE PERUSED THE MATERIAL ON RECORD INCLUDING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. CIT (A). THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER INTER ALIA ON THE GROUND THAT THE LD. CIT (A) HAS WRONGLY CONFIRMED THE PENALTY IN RESPECT OF ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRE CIATION IGNORING THAT THE AO HAS PASSED THE PENALTY ORDER ON THE BASIS OF INVALID NOTICE ISSUED U/S 274 R.W.S. 271 (1) (C) OF THE ACT. WE NOTICE THAT THE LD. CIT (A) REJECTED THIS GROUND OF APPEAL AND DECIDED THE ISSUE ON MERITS AND PARTLY ALLOWED THE APPE AL OF THE ASSESSEE . THE FINDINGS OF THE LD. CIT (A) ARE AS UNDER: - 20. I HAVE CONSIDERED THE FACTS OF THE CASE, CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE AS ALSO THE ORDER OF THE AO. IT IS GATHERED THAT THE ASSESSEE HAD SOLD A LAND AT DAMAN FOR R S. 9,50,62,800/ - DURING THE YEAR. HOWEVER, THE STAMP VALUATION OF THE SALE WAS RS. 9,65,72,860/ - . THEREFORE DIFFERENCE OF RS. 15,10,060/ - WAS ADDED BY THE AO U/S 50C OF THE ACT. THE AO HAS FURTHER LEVIED PENALTY U/S 271 (1) (C) OF THE ACT ON THE DIFFERENCE AMOUNT OF RS. 15,10,060/ - WHICH IS THE SUBJECT MATTER OF THE PRESENT APPEAL. IN THIS REGARD I WOULD LIKE TO CLARIFY THAT THE ADDITION U/S 50C IS PURELY A TECHNICAL ADDITION. THIS IS NOT THE CASE OF THE ASSESSEE THAT HE ACTUALLY RECEIVED HIGHER AMOUNT OF R S. 9,65,72,860/ - AND OFFERED ONLY RS. 9,50,62,800/ - TOWARDS SALE OF THE PROPERTY, THUS MAKING HIM LIABLE FOR CONCEALMENT PENALTY. THERE IS NO EVIDENCE TO EFFECT, THAT EITHER THE ASSESSEE UNDER REPORTED THE CONSIDERATION OR FURNISH ANY INACCURATE PARTICULAR S. IN FACT THERE IS NO MATERIAL TO THAT EFFECT, NOR ANY SUCH MATERIAL IS BROUGHT ON THE RECORD, BY THE AO. IN FACT ADDITION U/S 50C IS A TECHNICAL ADDITION AND IN MY CONSIDERED VIEW, DOES NOT MAKE ASSESSEE LIABLE TO PENALTY U/S 271 (1) (C). IN ANY CASE TO LEVY THE PENALTY UNDER THIS 4 ITA NO. 2895 / MUM/2017 ASSESSMENT YEAR: 2011 - 1 2 SECTION, THE AO NEED TO ESTABLISH THAT THE ASSESSEE EITHER CONCEALED THE INCOME OR FURNISH INACCURATE PARTICULARS OF INCOME, WHICH IS NOT THE POSITION IN PRESENT CASE. THEREFORE, CONSIDERING THE FACTS OF THE CASE AND VARIOUS CAS E LAWS RELIED UPON BY THE ASSESSEE, THE PENALTY U/S 271 (1) (C) ON THIS ISSUE IS DIRECTED TO BE DELETED. 21. IN VIEW OF THE ABOVE FACTS AND LEGAL POSITION, PENALTY LEVIED IN RESPECT OF EXCESS CLAIM OF DEPRECIATION TO THE TUNE OF RS. 32,64,09,115/ - IS UPHEL D. AT THE SAME TIME, THE PENALTY IN RESPECT OF ADDITION OF RS. 15,10,060/ - U/S 50C IS DIRECTED TO BE DELETED. THE AO WILL COMPUTE THE QUANTUM OF PENALTY ACCORDINGLY. 7. T HE LD. CIT (A) HAS DECIDED THE APPEAL OF THE ASSESSEE ON MERITS ON THE BASIS OF EVIDENCE ON RECORD AND IN ACCORDANCE WITH THE PRINCIPLES OF LAW LAID DOWN BY THE COURTS OF LAW AND THE DECISIONS OF THE VARIOUS BENCHES OF THE ITAT . W E DO NOT FIND ANY MATERIAL ON RECORD TO ESTABLISH THAT THE FINDINGS OF THE LD. CIT (A) ARE FACTUALLY O R LEGALLY INCORRECT . FURTHER WE DO NOT FIND ANY MATERIAL ON RECORD TO HOLD THAT THE NOTICE ISSUED BY THE U/S 274 R.W.S. 271 (1) (C) OF THE ACT WAS INVALID. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE WELL - REASONED ORDER OF THE LD. CIT (A). WE THEREFORE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THE ASSESSEES APPEAL. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2011 - 2012 IS DISMISSED. ORDER PRONOUNCED ON 20 TH APRIL, 2020 UNDER RULE 34 (4) OF THE INCOM E TAX APPELLATE TRIBUNAL RULES, 1963. SD/ - SD/ - ( RAJESH KUMAR ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMB AI ; DATED: 20 / 0 4 / 2020 ALINDRA, PS 5 ITA NO. 2895 / MUM/2017 ASSESSMENT YEAR: 2011 - 1 2 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI