DCIT 10(2)(2), MUMBAI V. MAX AEROSPACE AND AVIATION P.LTD, MUMBAI

ITA 3486/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8027 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 12-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Assessee Lawyers: JYOTI KUKERJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE S HRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 3486 /MUM/2017 ASSESSMENT Y EAR: 2009 - 10 THE DCIT - 10(2)(2), R. NO. 209, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S MAX AEROSPACE AND AVIATION PVT. LTD., HANGER NO. CI, JUHU AERODROME, JUHU, MUMBAI - 400051 PAN: AABCM9671M (APPELLANT) (RESPONDENT) REVENUE BY : SHRI CHAITANYA ANJARIA (SR. DR) ASSESSEE BY : JYOTI KUKERJA (AR) DATE OF HEARING: 25 /09 /201 8 DATE OF PRONOUNCEMENT: 25 / 09 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 15.02.2017 PASSED BY THE COMMISSIONER OF INCOME TA X (APPEALS) - 17 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2009 - 10 , WHEREBY THE LD. CIT(A) HAS ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE PENALTY ORDER PASSED U/S 271 (1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. BRI EF FACTS OF THE CASE ARE THAT THE ASSESSEE ENGAGED IN THE BUSINESS OF SERVICE AND REPAIR OF AIRCRAFT PARTS CLAIMED DEDUCTION U/S 80IA(4)(I)(A) & (B) OF THE ACT. THE AO DISALLOWED THE CLAIM HOLDING THAT SINCE THE ASSESSEE IS IN THE BUSINESS OF SERVICE AND R EPAIRS, IT IS NOT ELIGIBLE FOR THE SAID DEDUCTION. ACCORDINGLY, THE AO INITIATED PENALTY PROCEEDINGS U/S 271 (1) (C) OF THE ACT AND LEVIED PENALTY OF RS. 40,49,310/ - . THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT (A). DURING THE APPELLATE PR OCEEDINGS, THE ASSESSEE POINTED 2 ITA NO. 3486 / MUM/2017 ASSESSMENT YEAR: 2009 - 10 OUT THAT THE ITAT HAS DELETED THE ADDITION IN QUANTUM APPEAL HOLDING THE ASSESSEE COMPANY ELIGIBLE FOR CLAIM OF THE SAID DEDUCTION. ACCORDINGLY, T HE LD. CIT (A) DELETED THE PENALTY LEVIED BY AO HOLDING THAT ONCE THE ADDITION IS DELETED, PENALTY LEVIED ON THE BASIS OF ADDITION, DOES NOT SURVIVE. AGAINST THE SAID ORDER, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3 . T HE REVENUE HAS PREFERRED PRESENT APPEAL ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT (A) IS JUSTIFIED IN CANCELLING THE PENALTY U/S 271(1)(C) OF THE ACT WITHOUT APPRECIATING THAT THE ASSESSEE HAD CLAIMED AN INADMISSIBLE CLAIM OF DEDUCTION U/S 80IA(4) OF THE ACT, THEREBY, FURNISHED INACCURA TE PARTICULARS OF ITS INCOME, THOUGH IT IS WELL AWARE OF THE FACT THAT IT IS NOT DEVELOPING ANY INFRASTRUCTURE FACILITY FOR THE AIRPORT BUT ONLY CARRYING OUT THE REPAIR AND MAINTENANCE OF THE AIRCRAFTS AND HELICOPTER AND THE SAME DOES NOT AMOUNT TO DEVELOP ING OR OPERATING OR MAINTAINING AIRPORT WITHIN THE MEANING OF SECTION 80IA(4) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE PENALTY U/S 271 (1)(C) OF THE ACT WITHOUT APPRECIATING THAT THE A SSESSEE HAD FAILED TO REBUT THE PRESUMPTION IN EXPLANATION - 1 OF SECTION 271 (1)(C) OF THE ACT.? 4. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE URGED THAT SINCE THE ITAT HAS DECIDED THE QUANTUM APPEAL IN FAVOUR OF THE ASSESSEE , THE LD. CIT (A) HAS RI GHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE PENALTY. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY CONCEDED THAT THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IA(4 ) HAS BEEN DELETED BY THE ITAT. 5. WE HAVE GONE THROUGH THE MAT ERIAL ON RECORD IN THE LIGHT OF THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. WE NOTICE THAT VIDE 3 ITA NO. 3486 / MUM/2017 ASSESSMENT YEAR: 2009 - 10 ORDER DATED 24.08.2016, T HE CO - ORDINATE BENCH OF THE TRIBUNAL HAS DELETED THE ADDITION IN THE ASSESSEES APPEAL ITA NO. 43/MUM/2014 HOLDING THAT T HE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IA(4) OF THE ACT. SINCE, THE ADDITION, ON THE BASIS OF WHICH THE PENALTY ORDER WAS PASSED, HAS BEEN DELETED, THE PENALTY DOES NOT SURVIVE. HENCE, THERE IS NO INFIRMITY IN THE ORDER OF THE LD.CIT (A). WE THEREFOR E UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THE SOLE GROUND OF THE APPEAL OF THE REVENUE. IN THE RESULT, APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2009 - 2010 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH SEPTEMBER 20 18. SD/ - SD/ - ( G.S. PANNU ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 25 / 09 / 201 8 ALINDRA, 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