GTC INDUSTRIES LTD, MUMBAI V. ITO CEN CIR IX RG -II, MUMBAI

ITA 3504/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1212 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 1984-1985
• Appeal Filed On: 19-05-2016
• Court: TRIBUNAL
• Department Lawyers: MRS AMRITA RANJAN
• Keywords: Rectification of order
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 3504 /MUM/20 16 (ASSESSMENT YEAR 1984 - 85 ) I.T.A. NO. 3505/MUM/2016 (ASSESSMENT YEAR 1985 - 86) I.T.A. NO. 3506/MUM/2016 (ASSESSMENT YEAR 198 6 - 87) GTC INDUSTRIES LIMITED (NOW KNOWN AS GOLDEN TOBACCO LTD.) TOBACCO HOUSE S.V. ROAD VILE PARLE WEST MUMBAI - 400 056. VS. ACIT 9(3)(2) ROOM NO. 418 AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAACG1421A ASSESSEE BY SHRI VINODKUMAR BINDAL & SHRI GAURAV BANSAL DEPARTMENT BY MRS. AMRITA RANJAN DATE OF HEARING 1 1 .4 . 201 7 DATE OF PRONOUNCEMENT 11 . 4 . 201 7 O R D E R PER BENCH: - ALL THESE THREE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS P ASSED BY LD CIT(A) CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT FOR ASSESSMENT YEARS 1984 - 85, 1985 - 86 AND 1986 - 87. 2. THE LD COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS LEVIED PENALTY IN ALL THE THREE YEARS ON THE ADDITION MADE BY HIM TOWARDS PREMIUM REALISED ON SALE OF CIGARETTES, I.E., THE AO TOOK THE VIEW THAT THE ASSESSEE HAS REALISED PREMIUM OVER AND ABOVE THE SELLING PRICE AND DID NOT 2 ACCOUNT FOR THE SAME. THE AO ALSO LEVIED PENALTY ON THE ADDITION MADE BY HIM IN ALL THE THREE YEARS TOWARDS PREMIUM REALISED ON SALE OF CIGARETTES. THE LD A.R FURTHER SUBMITTED THAT THE ABOVE SAID ISSUE IN ALL THE THREE YEARS WAS REFERRED TO A SPECIAL BENCH AND THE HONBLE SPECIAL BENCH HAS SINCE DELETED THE ADDITION MADE B Y THE AO IN ALL THE THREE YEARS, VIDE ITS ORDER DATED 07 - 03 - 2017 PASSED IN ITA NO.5996/MUM/1993, ITA NO.1055/BOM/94 AND ITA NO.1056/BOM/94 RELATING TO AYS 1984 - 85 TO 1986 - 87 RESPECTIVELY. ACCORDINGLY HE SUBMITTED THAT THE PENALTY LEVIED IN ALL THE THREE Y EARS ON THE ADDITION MADE TOWARDS PREMIUM REALISED ON SALE OF CIGARETTES IS LIABLE TO BE DELETED. 3. THE LD A.R FURTHER SUBMITTED THAT THE AO HAS LEVIED PENALTY ON THE ADDITION OF RS.10.00 CRORES MADE BY HIM IN AY 1984 - 85 TOWARDS SUPPRESSED PRODUCTION. HE SUBMITTED THAT THE LD CIT(A) HAS DELETED THIS ADDITION AND THE ORDER OF LD CIT(A) ON THIS ISSUE HAS SINCE BEEN CONFIRMED BY THE TRIBUNAL, VIDE ITS ORDER DATED 06 - 03 - 1991 PASSED IN ITA NO.4976/BOM/88. ACCORDINGLY HE SUBMITTED THAT THE PENALTY LEVIED BY THE AO IN AY 1984 - 85 ON THE ABOVE SAID ADDITION OF RS.10.00 CRORES IS LIABLE TO BE DELETED. 4. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT THE ADDITION CONSIDERED BY THE HONBLE SPECIAL BENCH OF ITAT TOWARDS PREMIUM REALISED ON SALE OF CIGARETTES WAS R S.21.36 CRORES, WHEREAS THE AO HAS LEVIED PENALTY ON THIS ADDITION BY TAKING THE QUANTUM OF ADDITION AT RS.22.73 CRORES. ACCORDINGLY SHE SUBMITTED THAT THE PENALTY CAN BE DELETED ONLY TO THE EXTENT OF RELIEF GRANTED BY THE SPECIAL BENCH. 5. IN THE RE JOINDER, THE LD A.R SUBMITTED THAT THE AO INITIALLY MADE AN ADDITION OF RS.21.36 CRORES FROM WHICH HE REDUCED A SUM OF RS.1.00 CRORES TOWARDS EXPENSES. SUBSEQUENTLY THE AO PASSED A RECTIFICATION ORDER U/S 154 OF THE ACT ON 29.06.1987, WHEREIN HE CORRECTED A TOTALLING ERROR TO THE TUNE OF 3 RS.2.36 CRORES. ACCORDINGLY THE ADDITION ON ACCOUNT OF PREMIUM REALISED ON SALES WORKED OUT TO RS.22.73 CRORES FINALLY AND THE PENALTY WAS LEVIED ON THAT AMOUNT. SINCE THE SPECIAL BENCH OF TRIBUNAL HAS HELD THAT NO ADDIT ION COULD BE MADE ON ACCOUNT OF PREMIUM REALISED ON SALE OF CIGARETTES, THE ENTIRE AMOUNT OF PENALTY IS LIABLE TO BE DELETED. 6. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. FROM THE ORDERS PASSED BY HONBLE SPECIAL BENCH/DIVISION BENCH OF ITAT, WE NOTICE THAT THE ADDITIONS, ON WHICH THE PENALTY HAS BEEN LEVIED IN ALL THESE THREE YEARS, HAVE SINCE BEEN DELETED. IN AY 1984 - 85, THERE APPEARS TO BE CONFUSION ABOUT THE QUANTUM OF ADDITION MENTIONED IN THE ORDER PASSED BY HONBLE SPECIAL BENCH. AS SUBMITTED BY THE LD A.R IN THE REJOINDER, THE DIFFERENCE HAS ARISEN ON ACCOUNT OF SUBSEQUENT RECTIFICATION ORDER PASSED BY THE AO AS WELL AS THE DEDUCTION GIVEN TOWARDS EXPENSES BY THE AO IN THE ORIGINAL ASSESSMENT ORDER. SINCE IT IS ONLY A MATTER OF RECONCILIATION, WE RESTORE THIS MATTER OF RECONCILIATION TO THE FILE OF THE AO. OTHERWISE, THERE IS MERIT IN THE SUBMISSION OF THE LD A.R THAT THE HONBLE SPECIAL BENCH HAS HELD THAT THE ADDITION ON ACCOUNT OF PREMIUM REALISED ON SALE OF CIGARETTES IS NO T SUSTAINABLE. ACCORDINGLY WE SET ASIDE THE IMPUGNED ORDERS PASSED BY LD CIT(A) IN ALL THE THREE YEARS UNDER CONSIDERATION AND DIRECT THE AO TO DELETE THE PENALTY LEVIED ON THE ADDITIONS (SUBJECT TO RECONCILIATION OF THE ADDITION IN AY 2004 - 05) MADE IN AL L THE THREE YEARS. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE FOR AY 2004 - 05 IS TREATED AS ALLOWED AND OTHER TWO APPEALS ARE ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 11 .4 .201 7. SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 11 / 4 / 20 1 7 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUAR D FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI