The DCIT, Circle-6, Surat V. M/s. Jivraj Tea Company, Surat

ITA 3553/AHD/2015

• Counselvise Citation: [2018] 111 COUNSELVISE.COM (IT) 1931 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRISRINIVAST BIDARI
• Assessee Lawyers: DENNIS CHOKSI
• Keywords: Set aside
• Section: 271(1)(c); 260A; 80IA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL,SURAT BENCH,SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.3553/AHD/2015/SRT [ [ / ASSESSMENT YEAR: 2008-09 DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(3), SURAT. VS. M/S. JIVRAJ TEA COMPANY, 5/528, JIVRAJ CHAMBER, RUWALATEKRABHANGAL, SURAT 395 003. [PAN: AACFJ 2236R] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRISRINIVAS T. BIDARI, CIT, DR /RESPONDENT BY : SHRI DENNIS CHOKSI, C.A /DATE OF HEARING : 05-03-2018 /DATE OF PRONOUNCEMENT : 15-03-2018 / ORDER PERC.M.GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-4, SURAT (CIT(A) FOR SHORT) DATED 08.10.2015 FOR THE ASSESSMENT YEAR (AY) 2008-09 PASSED IN THE FIRST APPEALNO.CAS-4/TRF/131/2014-15. 2. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLOWS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE PENALTY U/S. 271(1)(C) OF RS. 2 ITA NO.3553/AHD/2015/SRT (A.Y: 2008-09) M/S. JIVRAJ TEA COMPANY 16,15,242/- ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S. 80IA OF THE ACT. 2. THE LD. CIT(A) HAS RELIED UPON THE DECISION OF HONBLE ITAT IN THE CASE OF ASSESSEE IN QUANTUM APPEAL WHEREIN THE ADDITION HAS BEEN DELETED. HOWEVER, THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF THE HONBLE ITAT AND APPEAL U/S. 260A HAS BEEN FILED BEFORE THE HONBLE HIGH COURT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE LD. CIT(A), SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A)-I SURAT MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICERS MAY BE RESTORED. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBUNAL. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S. 80IA OF THE ACT. THE LD. DR FURTHER POINTED OUT THAT THE ITAT, IN QUANTUM APPEAL HAS DELETED THE ADDITION BUT THE SAME HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL HAS BEEN FILED BEFORE HON'BLE HIGH COURT U/S. 260A OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE WITHOUT ANY JUSTIFIED REASON AND THEREFORE IMPUGNED ORDER MAY KINDLY BE SET ASIDE BY RESTORING PENALTY ORDER. 4. THE LD. ASSESSEES REPRESENTATIVE (AR) STRONGLY SUPPORTED THE FIRST APPELLATE ORDER AND CONTENDED THAT THE DISALLOWANCE OF DEDUCTION U/S. 80IA OF THE ACT ON WHICH PENALTY WAS LEVIED HAS BEEN DELETED BY THE TRIBUNAL AND THE APPEAL OF THE REVENUE AGAINST THE DELETION OF ADDITION U/S. 40A(2)(B) OF THE ACT HAS ALSO BEEN DISMISSED BY THE TRIBUNAL. THE LD. AR FURTHER SUBMITTED THAT PENALTY IS NOT SUSTAINABLE WHEN THE ADDITION ITSELF HAS BEEN 3 ITA NO.3553/AHD/2015/SRT (A.Y: 2008-09) M/S. JIVRAJ TEA COMPANY DELETED IN THE APPELLATE PROCEEDINGS. FOR THIS PREPOSITION, THE LD. AR HAS PLACED RELIANCE ON VARIOUS DECISIONS INCLUDING JUDGMENT OFHONBLE SUPREME COURT IN THE CASE OF K.C. BUILDERS VS. ACIT 265 ITR 562 (SC). 5. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS AND THOUGHTFUL PERUSAL OF THE RECORD, INTER ALIA PENALTY ORDER AND IMPUGNED FIRST APPELLATE ORDER, FIRST OF ALL WE FIND THAT THE ADDITION ON WHICH PENALTY WAS LEVIED HAS BEEN DELETED BY THE TRIBUNAL AND DEPARTMENT HAS CARRIED THE MATTER BEFORE HON'BLE HIGH COURT WHICH IS PENDING. THE LD. CIT(A) HAS DELETED THE PENALTY BY TAKING COGNIZANCE OF ORDER OF TRIBUNAL BY WHICH ADDITION ON ACCOUNT OF DISALLOWANCE U/S. 80IA OF THE ACT HAS BEEN DELETED. HOWEVER, THE DEPARTMENT HAS FILED APPEAL BEFORE THE HON'BLE HIGH COURT AGAINST THE SAID ORDER OF THE TRIBUNAL WHICH IS PENDING. UNTIL AND UNLESS, ORDER OF TRIBUNAL IS MODIFIED OR REVERSED OR CANCELLED BY HON'BLE HIGH COURT PENALTY ON SUCH DELETED ADDITION CANNOT BE SUSTAINED. THE VIEW TAKEN BY THE LD. CIT(A) IS QUITE CORRECT AND SUSTAINABLE WE ARE UNABLE TO SEE ANY REASON TO INTERFERE WITH THE SAME AND THUS WE UPHOLD THE SAME. ACCORDINGLY, GROUNDS OF REVENUE BEING DEVOID OF MERITSARE DISMISSED. 6. IN THE RESULT,APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 15 TH MARCH, 2018. SD/ - SD/ - ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) / JUDICIAL MEMBER 4 ITA NO.3553/AHD/2015/SRT (A.Y: 2008-09) M/S. JIVRAJ TEA COMPANY / SURAT ; DATED : 15 TH MARCH, 2018 EDN / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT; 4 . , , / DR, ITAT,SURAT; 5 [ / GUARD FILE. / BY ORDER, // TRUE COPY // / ASSISTANT REGISTRAR , / ITAT, SURAT