ASST CIT 4(3), MUMBAI V. SVG FASHIONS LTD, MUMBAI

ITA 3250/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3596 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 05-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A DHYANI
• Keywords: Capital receipt
• Section: 80IB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER / I .T A NO. 3250/MUM /2013 ( / ASSESSMENT YEAR : 2007 - 08 THE ACIT - 4(3), AAYKAR BHAVAN, MUMBAI - 400 020 / VS. M/S. SVG FASHIONS LTD., 235, VENKATESHWAR BHAVAN, 3 RD FLOOR, KALBADEVI ROAD, ./ ./ PAN/GIR NO. AAACD 1621K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI R.A. DHYANI / RESPONDENT BY: SHRI HARIOM TULSYAN / DATE OF HEARING :03 . 0 2 . 201 6 / DATE OF PRONOUNCEMENT : 02 . 0 3 .201 6 / O R D E R PER C.N. PRASAD, JM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) - 8 , MUMBAI DATED 22.2.2013 PERTAINING TO ASSESSMENT YEAR 200 9 - 1 0 IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT . 2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE PENALTY WAS LEVIED FOR THE DISALLOWANCE MADE U/S. 80IB OF THE ACT IN RESPECT OF INTEREST SUBSIDY RECEIVED UNDER TUFF SUBSIDY SCHEME. IN THE ITA NO. 3250/M/2013 2 A SSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DISALLOWED DEDUCTION U/S. 80IB ON THIS INTEREST SUBSIDY HOLDING THAT THIS INCOME IS NOT DERIVED FROM INDUSTRIAL UNDERTAKING FOR THE PURPOSE OF COMPUTING RELIEF U/S. 80IB OF THE ACT. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUNAL IN ITA NO. 296/M/2012 DATED 23.12.2015 IN QUANTUM APPEAL BY CONSIDERING VARIOUS CASE LAW S , HELD THAT THE INTEREST SUBSIDY RECEIVED BY THE ASSESSEE IS CAPITAL IN NATURE. THE LD. COUNSEL SUBMITS THAT IT WAS THE BONAFIDE CL AIM OF THE ASSESSEE THAT INTEREST SUBSIDY IS REVENUE RECEIPT AND THEREFORE ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE ACT. HOWEVER, THE CLAIM OF THE ASSESSEE IS REJECTED BY THE AUTHORITIES HOLDING THAT IT IS A CAPITAL RECEIPT NOT ELIGIBLE FOR TAX THUS HE SUB MITS THAT THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME WARRANTING ANY LEVY OF PENALTY. HE FURTHER SUBMITS THAT SINCE THE QUANTUM APPEAL HAS BEEN HELD THAT THE RECEIPT IS ONLY CAPITAL RECEIPT THERE IS NO TAX PAYA BLE, THE LEVY OF PENALTY IS NOT JUSTIFIED. 4. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE PERUSED THE ORDERS OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE IN QUANTUM APPEAL WHERE THE TRIBUNAL HELD THAT THE SUBSIDY RECEIVED IS IN THE NATURE OF CAPITAL RECEIPT , W HILE COMING TO SUCH CONCLUSION, THE TRIBUNAL ANALYS ED VARIOUS CASE LAWS IN THE ISSUE. WE ALSO FIND THAT THE CLAIM OF THE ASSESSEE DEDUCTION U/S. 80IB ON INTEREST SUBSIDY IS A BONAFIDE CLAIM AND WE DO NOT SEE ANY CONCEALMENT OF INCOME OR FURNISHING OF ITA NO. 3250/M/2013 3 INACCURATE PARTICULARS OF SUCH INCOME ATTRACTING LEVY OF PENALTY. THE LD. CIT(A) DELETED THE PENALTY OBSERVING AS UNDER: IN THE CASE OF CIT VS ARISUDANA SPINNING MILLS LTD (2 010) 326 ITR 429 (P&H), HONBLE HIGH COURT HELD THAT FINDING OF FACT ARRIVED AT BY THE TRIBUNAL CANNOT BE SAID TO BE PERVERSE OR AGAINST THE MATERIAL AVAILABLE ON THE RECORD. WHEN THE RETURNS OF INCOME WERE FILED THE ISSUE WITH REGARD TO ENTITLEMENT OF DE DUCTION U/S. 80IA ON THE PROFITS DERIVED FROM TRADING TURNOVER I.E. TRADING IN THE RAW WOOL AND KNITTED CLOTH, WAS DEBATABLE, AND THIS ISSUE WAS SETTLED WITH THE JUDGMENT OF COURT IN LIBERTY INDIA VS CIT (207) 207 CTR (P&H) 243 WHICH HAS BEED UPHELD BY THE SUPREME COURT IN LIBERTY INDIA VS C IT (2009) 225 CTR (SC) 23. THEREFORE, THE TRIBUNAL HAS RIGHTLY COME TO THE CONCLUSION THAT THE ASSESSEE DID NOT DELIBERATELY OR CONSCIOUSLY CONCEALED THE TRUE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS O F INCOME. THE JUDGEMENT CITED BY THE APPELLANT IS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE PENALTY HAS BEEN DELETED ON THE BASIS OF AFORESAID FINDING OF FACT. IN VIEW OF THE AFORESAID FINDING OF FACT, NO SUBSTANTIAL QUESTION O F LAW IS ARISING OUT OF THE ORDER OF THE TRIBUNAL. IN VIEW OF THE FOREGOING DISCUSSION, IT IS EVIDENT THAT THE MATTER BEING HIGHLY CONTENTIOUS AND THE AO FOUND NOTHING EXCEPT REJECTING THE LEGAL CLAIM MADE BY THE APPELLANT WHICH ACCORDING TO IT WAS ALLOWABLE TO IT. IN FACT THE SAID CONTENTION OF THE APPE LLANT WAS HELD ADMISSIBLE BY THE VARIOUS COURTS AS INDICATED BY THE APPELLANT IN ITS SUBMISSIONS. THEREFORE, IN VIEW OF THE HONBLE SUPREME COURT DECISION IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS THE PENALTY U/S. 271(1)(C) IS NOT EXIGEBLE IN THIS CASE. THE SAME IS ACCORDINGLY DELETED. THIS GROUND OF APPEAL IS ALLOWED. 6. WE AGREE WITH THE CONCLUSIONS DRAWN BY THE LD. CIT(A) THAT THERE IS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS AS THE CLAIM OF THE ASSESSEE IS HIGHLY CONTENTIOUS AND BONAFIDE , THUS WE SUSTAIN THE ORDER OF THE LD. CIT(A) BY DELETING THE PENALTY. ITA NO. 3250/M/2013 4 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND MARCH , 201 6 . SD/ - SD/ - ( RAJESH KUMAR ) ( C.N. PRASAD ) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI ; DATED : 2 ND MARCH , 201 6 . . ./ RJ , SR. PS / 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