M/s Vardhman Industries, Jalandhar V. The Dy Commissioner Of Income Tax, Jalandhar

ITA 324/ASR/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8745 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-01-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 18-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Keywords: Business income; Wrong claim
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDH AR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.324(ASR)/2015 ASSESSMENT YEAR: 2006-07 M/S VARDHMAN INDUSTRIES, C-94, FOCAL POINT EXTENSION, JALANDHAR. PAN: AADFV-2373G VS. DY. CIT, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K.R. JAIN (ADV.) RESPONDENT BY: SH. BHAWANI SHANKAR (DR.) DATE OF HEARING: 19.01.2017 DATE OF PRONOUNCEMENT: 27.02.20 17 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(A), JALANDHAR, DATED 07.05.2015, FOR ASST. YEAR: 2006-0 7. 2. THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF LD . CIT(A), BY WHICH HE HAS CONFIRMED THE PENALTY IMPOSED BY ASSESSING O FFICER U/S 271(1)(C) OF THE ACT. 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT DURING SURVEY OPERATION U/S 133A, THE ASSESSEE HAD SURRENDERED RS.40 LACS O N ACCOUNT OF ITA NO.32 4(ASR)/2015 ASST. YEAR: 2006-07 2 VARIOUS DISCREPANCIES AND SINCE THE ASSESSEE WAS EN JOINING DEDUCTION U/S 80IB OF THE ACT AND THE SURRENDERED INCOME WAS EARNED FROM THAT BUSINESS ONLY, THEREFORE, THE ASSESSEE HAD CLAIMED SURRENDERED INCOME AS PART OF DEDUCTION U/S 80IB. IT WAS SUBMITTED THA T ASSESSING OFFICER DENIED DEDUCTION U/S 80IB AND SIMULTANEOUSLY, IMPOS ED PENALTY U/S 271(1)(C) FOR MAKING FALSE CLAIM U/S 80IB. THE LD. AR SUBMITTED THAT WHILE FILING THE RETURN OF INCOME THE ASSESSEE HAD DISCLOSED COMPLETE AND ACCURATE PARTICULARS OF INCOME AND HAD FILED AUDIT REPORT UNDER U/S 80IB IN FORM NO.10CCB AND IT WAS DULY CERTIFIED BY THE A UDITORS AND NO FURTHER ADDITION WAS MADE TO THE INCOME EXCEPT THIS DISALLOWANCE. IT WAS FURTHER SUBMITTED THAT SURRENDERED AMOUNT WAS DECLA RED AS BUSINESS INCOME IN THE RETURN OF INCOME AND WAS ALSO ASSESSE D AS INCOME FROM BUSINESS AND THEREFORE, IT WAS ARGUED THAT ASSESSEE HAD SUBMITTED COMPLETE DETAILS AND HAD NOT CONCEALED ANY PARTICUL ARS OF INCOME AND MERELY DENIAL OF CLAIM MADE BY ASSESSEE CANNOT TANT AMOUNT TO FURNISHING OF WRONG PARTICULARS OF INCOME AND IN TH IS RESPECT RELIED ON THE CASE LAW OF CIT VS. RELIANCE PETRO PRODUCTS LIM ITED (2010) 322 ITR 158 (SC), WHEREIN IT HAS BEEN HELD THAT MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4. THE LD. DR, ON THE OTHER HAND, HEAVILY PLACED HI S RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. ITA NO.32 4(ASR)/2015 ASST. YEAR: 2006-07 3 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT DURING ASSE SSMENT PROCEEDINGS, THE ASSESSEE HAD CREDITED AN AMOUNT OF RS.40 LACS I N ITS P&L ACCOUNT AS INCOME SURRENDERED DURING THE SURVEY. FROM THE BUSI NESS INCOME, THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80IB TO THE EXTE NT OF RS.6,44,404/-. THE ASSESSING OFFICER DISALLOWED DEDUCTION U/S 80IB HOLDING THAT ASSESSEE WAS NOT ABLE TO PROVE THAT ADDITIONAL INCO ME SURRENDERED DURING THE YEAR WAS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT AND THEREFORE, THE ASSESSING OFFICER IMPOSED A PENALTY TO THE EXTENT OF RS.2,16,905/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. CIT(A) ALSO CONFIRMED THE ACTION OF ASSESSING OFFIC ER BY HOLDING THAT THE SURRENDERED INCOME CANNOT BE SAID TO BE INCOME OF T HE ASSESSEE FROM INDUSTRIAL UNDERTAKING. HOWEVER, WE FIND THAT ASSES SEE HAD DULY CREDITED THE SURRENDERED INCOME IN ITS P&L ACCOUNT AS IS NOT ED BY ASSESSING OFFICER IN HIS ORDER. THE SURRENDERED INCOME WAS AC CEPTED TO BE EARNED FROM BUSINESS OF THE ASSESSEE. THE ASSESSEE HAD FIL ED COMPLETE DETAILS FOR ITS CLAIM U/S 80IB AND HAD FILED FORM NO.10CCB DULY CERTIFIED BY THE AUDITORS OF THE COMPANY. THE ASSESSING OFFICER DID NOT FIND ANY THING WRONG IN THE BOOKS OF ACCOUNTS AND HE SIMPLY DENIED THE DEDUCTION U/S 80IB. HOWEVER, THE FACT REMAINS THAT ASSESSEE HAD F ILED COMPLETE PARTICULARS OF ITS INCOME AND NOTHING WAS CONCEALED EVEN THE DEDUCTION CLAIM U/S 80IB WAS WORKED OUT BY ASSESSING OFFICER ON THE BASIS OF FORM ITA NO.32 4(ASR)/2015 ASST. YEAR: 2006-07 4 10CCB FILED WITH THE ASSESSING OFFICER AND FROM THE SE RECORDS ONLY THE ASSESSING OFFICER CAME TO KNOW THAT ASSESSEE HAD CL AIMED NOT DEDUCTION U/S 80IB. NOW, WHEN CLAIM MADE BY ASSESSEE IS DENIED BY ASSE SSING OFFICER, IT CANNOT BE SAID THAT ASSESSEE HAD FURNISHED WRONG PARTICULARS OF ITS INCOME. THE HONBLE SUPREME COURT IN THE CASE OF CI T VS. RELIANCE PETRO PRODUCTS LTD. 322 ITR 158 (SUPRA) HAS HELD THAT MER E MAKING THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. REGARDING THE WORDS INACCURATE AND PARTICULARS IN CONJUNC TION, THE APEX COURT OPINED THAT THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT INACCURATE, NOT EXACT OR CORRECT. IN THIS CASE , THERE IS NO FINDING THAT ANY DETAIL SUPPLIED BY THE ASSESSEE IN ITS RETURN W AS FOUND TO BE INCORRECT, ERRONEOUS OR FALSE SUCH NOT BEING THE CA SE, THERE SHOULD BE NO QUESTION OF INVITING PENALTY U/S 271(1) (C). THE CASE LAW OF CIT VS. RELIANCE PETRO PRODUCTS LT D. (SUPRA) AS PRONOUNCED BY HONBLE SUPREME COURT HAS BEEN FOLLOW ED IN A NUMBER OF CASES AND WHICH HAS ALSO BEEN RELIED ON BY ASSESSEE IN ITS WRITTEN SUBMISSIONS. ITA NO.32 4(ASR)/2015 ASST. YEAR: 2006-07 5 [ IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE JUDICIAL PRECEDENTS RELIED ON BY THE ASSESSEE, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 6. IN NUTSHELL, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 .02. 2017. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:27.02.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER