Emtelle India Ltd. ( Formerly Known as Parixit Industries Ltd.), Ahmedabad V. The ACIT, Circle-5, Ahmedabad

ITA 3252/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1287 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 19-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P SHAH AR K MADHUSUDAN
• Keywords: Application of stay; Question of law

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., , !' BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER SL. NO(S) S.P. NO(S)/ ITA NO(S) ASSESSMENT YEAR(S) APPEAL(S) / STAY PETITION BY: APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. SP NO.59/AHD/16 ( IN ITA NO.3252/AHD/15 ) 2007-08 EMTELLE INDIA LTD. ( FORMERLY KNOWN AS PARIXIT INDUSTRIES LTD. ) SURVEY NO.214/1, VIRPURA BUS STOP PO IYAVA TAL.SANAND AHMEDABAD-382170 PAN: AABCP 8985D THE ACIT CIRCLE-5 AHMEDABAD 2. SP NO.60/AHD/16 ( IN ITA NO.3253/AHD/15 ) 2008-09 -DO ASSESSEE- -DO REVENUE- 3. SP NO.61/AHD/16 ( IN ITA NO.3254/AHD/15 ) 2009-10 -DO ASSESSEE- -DO REVENUE- 4. ITA NO. 3252/AHD/15 2007-08 -DO ASSESSEE- -DO REVENUE- 5. ITA NO. 3253/AHD/15 2008-09 -DO ASSESSEE- -DO REVENUE- 6. ITA NO. 3254/AHD/15 2009-10 -DO ASSESSEE- -DO REVENUE- ASSESSEE BY : SHRI J.P. SHAH, AR REVENUE BY : K. MADHUSUDAN, SR.DR #$ / DATE OF HEARING 17/06/2016 %&'$ / DATE OF PRONOUNCEMENT 23/06/2016 SP NOS.59,60 & 61/AHD/2016 AND ITA NOS.3252, 3253 & 3254/AHD/2015 EMTELLE INDIA LTD. VS. ACIT ASST.YEARS 2007-08, 2008-09 & 2009-10 RESPECTIVEL Y - 2 - / O R D E R PER BENCH : ASSESSEE FILED THREE STAY PETITIONS AND ALSO FILED THREE APPEALS WHICH ARE DIRECTED AGAINST THE ORDERS OF THE COMMI SSIONER OF INCOME TAX(APPEALS)-7, AHMEDABAD IDENTICALLY DATED 15/0 9/2015 FOR THE ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10. 2.1. BEFORE US, AT THE OUTSET, LD.AR SUBMITTED THAT AS FAR AS THE APPEALS OF ASSESSEE ARE CONCERNED, THOUGH THEY RELATE TO TH REE ASSESSMENT YEARS BUT THE ISSUE IS IDENTICAL IN ALL THE APPEALS EXCEP T FOR THE ASSESSMENT YEAR AND THE QUANTUM OF PENALTY AND THEREFORE THE SUBMIS SION MADE BY HIM WHILE ARGUING ONE APPEAL WOULD BE APPLICABLE TO OTH ERS. THE LD.SR.DR DID NOT OBJECT TO THE AFORESAID SUBMISSION OF LD.AR . WE, THEREFORE, FOR THE SAKE OF CONVENIENCE, PROCEED TO DISPOSE OF ALL THE APPEALS BY A CONSOLIDATED ORDER. 2.2. WE FIRST TAKE UP ASSESSEES APPEAL IN ITA NO.3252/A HD/2015 FOR AY 2007-08 AS A LEAD CASE. 2.3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIALS ON RECORD ARE AS UNDER:- SP NOS.59,60 & 61/AHD/2016 AND ITA NOS.3252, 3253 & 3254/AHD/2015 EMTELLE INDIA LTD. VS. ACIT ASST.YEARS 2007-08, 2008-09 & 2009-10 RESPECTIVEL Y - 3 - 2.3.1. ASSESSEE IS A COMPANY STATED TO BE ENGAGED I N THE BUSINESS OF MANUFACTURING OF IRRIGATION PRODUCTS, I.E. DRIP IRR IGATION, SPRINKLER IRRIGATION, MICRO SPRINKLER, ETC. ASSESSEE FILED I TS RETURN OF INCOME ON 31/10/2007 DECLARING TOTAL INCOME OF RS.1,33,69,460 /-. THE RETURN WAS INITIALLY PROCESSED U/S.143(1) OF THE ACT. SUBSEQU ENTLY, NOTICE U/S.148 WAS ISSUED ON 04/03/2011 AND SERVED UPON THE ASSESS EE AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S.143(3) OF THE ACT VIDE DA TED 21/10/2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.3,93,00,130/- INTER-ALIA BY DISALLOWING THE CLAIM OF DEDUCTION OF RS.2,47,58,22 1/- U/S.80IA(4) OF THE ACT. AGGRIEVED BY THE ORDER OF THE AO, ASSESSE E CARRIED THE MATTER BEFORE THE APPELLATE AUTHORITIES. APPELLATE AUTHO RITIES CONFIRMED THE ORDER OF AO AND THEREBY DISMISSED THE APPEAL OF THE ASSESSEE. ON THE AFORESAID DENIAL OF CLAIM OF DEDUCTION U/S.80IA (4) OF THE ACT, AO VIDE ORDER DATED 31/12/2013 HELD THAT SINCE THE ASSESSEE WAS NOT A DEVELOPER BUT ONLY A WORK CONTRACTOR, IT WAS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S.80IA(4) OF THE ACT. BY CLAIMING ITSELF TO BE A DEVELOPER INSTEAD OF WORK CONTRACTOR, ASSESSEE HAS WRONGLY CLAIMED DEDU CTION U/S.80IA(4) OF THE ACT AND HE WAS THEREFORE OF THE VIEW THAT ASSESSEE WAS LIABLE FOR PENALTY IN VIEW OF EXPLANATION-1 OF SECTION 271(1)( C) OF THE ACT AND, ACCORDINGLY, LEVIED A PENALTY OF RS.83,33,586/- AG GRIEVED BY THE PENALTY ORDER, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CI T(A), WHO VIDE ORDER SP NOS.59,60 & 61/AHD/2016 AND ITA NOS.3252, 3253 & 3254/AHD/2015 EMTELLE INDIA LTD. VS. ACIT ASST.YEARS 2007-08, 2008-09 & 2009-10 RESPECTIVEL Y - 4 - DATED 15/09/2015 (IN APPEAL NO.CIT(A)-7/333/15-16) CONFIRMED THE PENALTY LEVIED BY AO. AGGRIEVED BY THE ORDER OF LD .CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 2.4. BEFORE US, LD.AR REITERATED THE SUBMISSIONS MA DE BEFORE THE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT ON IDENTIC AL FACTS IN ASSESSEES OWN CASE, THE CLAIM OF DEDUCTION U/S.80IA OF THE AC T IN THE AY 2006-07 WAS ALLOWED BY THE REVENUE BUT IN THE IMPUGNED YEAR THE CLAIM WAS DENIED TO ASSESSEE. ASSESSEE THEREFORE CARRIED THE MATTER BEFORE THE HONBLE GUJARAT HIGH COURT AND HONBLE HIGH COURT I N TAX APPEAL NOS.831 832 & 832/AHD/2013 VIDE ORDER DATED 29/01/2 014 HAD ADMITTED THE APPEAL OF ASSESSEE. HE ALSO PLACED ON RECORD T HE COPY OF THE SAID DECISION. HE THEREFORE SUBMITTED THAT SINCE THE FA CT IN THE PRESENT CASE IS IDENTICAL TO THAT OF EARLIER YEARS AND IN THE IMPUG NED YEAR THE QUANTUM APPEAL HAS BEEN ADMITTED BY HONBLE GUJARAT HIGH CO URT, SHOWS THAT THE QUESTION OF DEDUCTION IS DEBATABLE ISSUES AND ON SU CH DEBATABLE ISSUE IN VIEW OF THE DECISIONS OF VARIOUS OTHER HIGH COURTS, NO PENALTY U/S.271(1)(C) OF THE ACT IS LEVIABLE. AS AN ALTERN ATE SUBMISSION, LD.AR SUBMITTED THAT THE LEVY OF PENALTY BE KEPT IN ABEYA NCE TILL THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE MATTER. LD.SR.DR , ON THE OTHER HAND, SUPPORTED THE ORDERS OF AO AND LD.CIT(A) AND FURTHE R SUBMITTED THAT THE FACT OF MERE ADMISSION OF APPEAL BY THE HONBLE HIG H COURT CANNOT BE A SP NOS.59,60 & 61/AHD/2016 AND ITA NOS.3252, 3253 & 3254/AHD/2015 EMTELLE INDIA LTD. VS. ACIT ASST.YEARS 2007-08, 2008-09 & 2009-10 RESPECTIVEL Y - 5 - REASON FOR THE NON-LEVY OF PENALTY. HE THUS SUPPOR TED THE ORDERS OF THE AO AND LD.CIT(A). 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LE VY OF PENALTY U/S.271(1)(C) OF THE ACT ON THE DISALLOWANCE OF CLA IM OF DEDUCTION MADE U/S.80IA(4) OF THE ACT. WE FIND THAT AGAINST THE D ENIAL OF CLAIM OF DEDUCTION U/S.80IB(4) OF THE ACT, THE ASSESSEE HAS FILED APPEAL BEFORE THE HONBLE GUJARAT HIGH COURT AND THE HONBLE GUJARAT HIGH COURT VIDE ORDER DATED 29/1/2014 IN TAX APPEAL NOS.831, 832 & 833 OF 2013 HAS ADMITTED THE APPEALS OF THE ASSESSEE AND SUBSTANTIA L QUESTION OF LAW BEFORE THE HONBLE HIGH COURT IN THOSE APPEALS ARE AS UNDER:- (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN LAW HOLDING THAT THE APPELLAN T WAS NOT A DEVELOPER OF THE INFRASTRUCTURE FACILITY BUT WAS A MERE CONTRACTOR THEREOF, AND THEREFORE NOT ENTITLED TO THE DEDUCTIO N UNDER SECTION 80IA? (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN LAW IN DISALLOWING THE DEDUCT ION UNDER SECTION 80IA WHEN IN THE PRECEDING YEAR 2006-07 IT STOOD ALLOWED IN A SCRUTINY ASSESSMENT ON IDENTICAL FACTS? SP NOS.59,60 & 61/AHD/2016 AND ITA NOS.3252, 3253 & 3254/AHD/2015 EMTELLE INDIA LTD. VS. ACIT ASST.YEARS 2007-08, 2008-09 & 2009-10 RESPECTIVEL Y - 6 - 3.1. BEFORE US, IT IS ASSESSEES SUBMISSION THAT TH E FACTS IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEARS IN WHICH THE HONBLE GUJARAT HIGH COURT HAS ADMITTED THE APPEALS OF THE ASSESSEE. THE AFORESAID FACTS, HAVE NOT BEEN CONTROVERTED BY REVE NUE. IN THE PRESENT CASE, SINCE THE PENALTY HAS BEEN LEVIED ON THE ISSU E WHICH IS ALREADY BEFORE THE HONBLE GUJARAT HIGH COURT AND IN VIEW O F THE FACT THAT THE ASSESSEE WAS ALLOWED DEDUCTION IN AY 2006-07, WE AR E OF THE VIEW THAT THE ISSUE OF PENALTY ON SUCH CLAIM NEEDS TO BE REM ANDED BACK TO THE FILE OF AO FOR DECIDING IT ON THE BASIS OF THE DECISION IN QUANTUM APPEAL WHICH IS BEFORE THE HONBLE GUJARAT HIGH COURT AND IN ACCORDANCE WITH LAW. WE THEREFORE WITHOUT EXPRESSING OUR VIEW ON T HE MERITS OF THE CASE, RESTORE THE ISSUE BACK TO THE FILE OF LD.AO. THUS, GROUNDS OF ASSESSEES APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 4. SINCE IDENTICAL FACTS ARE INVOLVED IN ASSESSEES APPEALS FOR AYS 2008-09 & 2009-10, WE THEREFORE FOR THE SIMILAR REA SONS STATED HEREINABOVE WHILE DECIDING THE ASSESSEES APPEAL FO R AY 2007-08 IN ITA NO.3252/AHD/2015 (SUPRA) AND FOR SIMILAR REASONS AL LOW THE GROUND(S) FOR STATISTICAL PURPOSES OF ASSESSEES APPEALS IN A YS 2008-09 & 2009-10. THUS, THE APPEALS OF ASSESSEE ARE ALLOWED FOR STATI STICAL PURPOSES. SP NOS.59,60 & 61/AHD/2016 AND ITA NOS.3252, 3253 & 3254/AHD/2015 EMTELLE INDIA LTD. VS. ACIT ASST.YEARS 2007-08, 2008-09 & 2009-10 RESPECTIVEL Y - 7 - 5. IN THE RESULT, ASSESSEES APPEALS FOR AYS 2007-0 8, 2008-09 & 2009-10 ARE ALLOWED FOR STATISTICAL PURPOSES. 6. BEFORE US, IN THE STAY PETITIONS THAT HAVE BEEN FILED BY ASSESSEE, ASSESSEE HAS PRAYED FOR STAY OF DEMAND AGAINST THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT. SINCE THE ISSUE OF LEVY O F PENALTY U/S.271(1)(C) OF THE ACT FOR THE THREE ASSESSMENT YEARS HAS BEEN REMITTED BACK TO THE FILE OF AO AS PER OUR DECISION HEREINABOVE, WE ARE OF THE VIEW THAT THE PRESENT STAY PETITION NOS.59, 60 & 61/AHD/2016 (ARI SING OUT OF ITA NOS.3252, 3253 & 3253/AHD/2015) FILED BY THE ASSESS EE SEEKING STAY OF THE PENALTIES LEVIED U/S.271(1)(C) OF THE ACT HAS B ECOME INFRUCTUOUS AND THEREFORE THE SAME ARE DISMISSED. 7. IN THE COMBINED RESULT, ASSESSEES APPEALS ARE A LLOWED FOR STATISTICAL PURPOSES, WHEREAS ASSESSEES STAY PETIT IONS ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 23/06/2016 SD/- SD/- .. () () ( R.P. TOLANI) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 23/ 06 /2016 ,..,.../ T.C. NAIR, SR. PS SP NOS.59,60 & 61/AHD/2016 AND ITA NOS.3252, 3253 & 3254/AHD/2015 EMTELLE INDIA LTD. VS. ACIT ASST.YEARS 2007-08, 2008-09 & 2009-10 RESPECTIVEL Y - 8 - ! ' / COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 123 4 / CONCERNED CIT 4. 4 ( ) / THE CIT(A)-7, AHMEDABAD 5. 567/23 , 23' , 1 / DR, ITAT, AHMEDABAD 6. 79:# / GUARD FILE. / BY ORDER, 05/ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 17.6.16 (DICTATION-PAD 12+ PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22.6.16 /23.6.16 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.23.6.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23.6.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER