The ACIT, Circle-7, Ahmedabad V. M/s. Bhandari Exports, Ahmedabad

ITA 3167/AHD/2010

• Counselvise Citation: 316720514 RSA 2010
• Duration Of Justice: 2 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-10-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 29-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: P D SHAH
• Keywords: Opportunity of being heard
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMADABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 3167/AHD/2010 ASSESSMENT YEAR :2003-04 ASSTT. COMMISSIONER OF INCOME TAX, CIR-7, AHMADABAD. V/S . M/S. BHANDARI EXPORTS, 30, OMKAR HOUSE, C.G. ROAD, NAVPURA, AHMADABAD. PAN NO. A AD FB1348P (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI O. P. BATHEJA, SR. D.R. /BY RESPONDENT SHRI P.D. SHAH, A.R. /DATE OF HEARING 10.10.2013 /DATE OF PRONOUNCEMENT 25.10.2013 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF REVENUE WHICH HA S EMANATED FROM THE ORDER OF CIT(A)-XVI, AHMEDABAD, DATED 16.09.201 0 FOR ASSESSMENT YEAR 2003-04. THE SOLE GROUND OF APPEAL IS AGAINST DELE TING THE PENALTY OF RS.3,40,412/- LEVIED U/S. 271(1)(C). 2. THE ASSESSEE CLAIMED DEDUCTION U/S. 80HHC FOR A SUM OF RS.1,18,25,710/- BEING 50% OF THE PROFIT OF BUSINES S. THE ASSESSEE FILED AUDITORS REPORT IN FORM NO.10CCAC. IN COMPUTATION , IN FORM NO.10CCAC, THE ASSESSEE HAS NOT REDUCED DUTY DRAW BACK, SALE O F IMPORT LICENSE, PROFIT ON SALE OF ASSETS AND BROKERAGE RECEIVED FROM THE PROF IT. THE LD. A.O. AFTER GIVING THE OPPORTUNITY OF BEING HEARD REDUCED THE R ECEIPT ON SALE OF IMPORT LICENSE OF RS.24,15,520/- AND 80HHC DEDUCTION WAS A LLOWED BY THE A.O. AT ITA NO. 3167/AHD/10 A.Y. 03-04 PAGE 2 RS. 1,05,25,829/- ON WHICH PENALTY PROCEEDING U/S. 271(1)(C) WAS INITIATED FOR CONCEALMENT OF INCOME. THE ASSESSEE CHALLENGED THE QUANTUM ADDITION BEFORE THE CIT(A), LD. CIT(A) IN QUANTUM APPEAL DIR ECTED THE A.O. TO CONSIDER THE 90% OF TOTAL DUTY DRAW BACK AND BROKERAGE FOR C ALCULATING THE 80HHC DEDUCTION. BEFORE IMPOSING PENALTY U/S. 271(1)(C), THE A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD, WHICH WAS REPLIED BY TH E ASSESSEE BUT ASSESSEES REPLY WAS NOT FOUND CONVINCING TO HIM AND HELD THAT THE APPELLANT HAD CLAIMED WRONG DEDUCTION U/S. 80HHC TANTAMOUNT TO FURNISH IN ACCURATE PARTICULARS OF INCOME. THUS, IT IS PROVED AND ESTABLISHED BEYOND ANY SHADE OF DOUBT THAT THE ASSESSEE HAD COMMITTED THE DEFAULT ON FURNISHIN G INACCURATE PARTICULARS OF INCOME BY EXCESS CLAIM OF DEDUCTION U/S. 80HHC. TH E DEFAULT IS DELIBERATELY AND WILLFULLY CONDUCT OF THE ASSESSEE HAS BEEN CONT UMACIOUS WITH INTENTION TO DEFRAUD REVENUE OF ITS LEGITIMATE TAX. THUS, HE IM POSED 100% PENALTY OF TAX ON AMOUNT SOUGHT TO BE EVADED AT RS.3,40,412/- BEIN G 100% OF TAX OF RS.3,40,412/- AT RS.3,40,412/- U/S. 271(1)(C). 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD HELD THAT MERE MAK ING A CLAIM DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR C ONCEALMENT OF INCOME UNTIL AND UNLESS THE A.O. BRINGS ON RECORD SOME MATERIALS TO SHOW THAT THERE WAS FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME, AFTER RELYING UPON THE ORDER OF THE HONBLE SUPREME COURT IN CASE OF RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 . ITA NO. 3167/AHD/10 A.Y. 03-04 PAGE 3 4. NOW THE REVENUE IS BEFORE US. LD. SR. D.R. VEHE MENTLY RELIED UPON THE ORDER OF THE A.O. AT THE OUTSET, LD. COUNSEL FOR T HE APPELLANT SUPPORTED THE ORDER OF THE CIT(A) AND REQUESTED TO UPHOLD THE ORD ER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. ALL PARTICULARS OF INCOME HAS BEEN DISCLOS ED BY THE APPELLANT IN COMPUTATION IN FORM NO. 10CCAC BUT ADDITION MADE ON THE BASIS OF DEBATABLE ISSUE BY THE A.O., WAS NOT JUSTIFIED TO I MPOSE THE PENALTY U/S. 271(1)(C). AS HELD IN CASE OF RELIANCE PETROPRODUC TS (SUPRA) BY THE HONBLE SUPREME COURT THAT ASSESSEES CLAIM MAY BE WRONG BU T CANNOT BE HELD IT IS CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS. THE LD. SR. D.R. HAS NOT CONTROVERTED THE FINDING OF THE CIT(A). TH US, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE REVENUES APPEAL. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . THIS ORDER PRONOUNCED IN OPEN COURT ON 25.10.2013 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;