MERCATOR LINES LTD, MUMBAI V. ACIT 5(2), MUMBAI

ITA 376/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6384 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-04-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 16-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR
• Keywords: Wrong claim; Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B BENCH BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.376/MUM/2009 - A.Y 1998-99 M/S MERCATOR LINES LIMITED, 3 RD FLOOR, MITTAL TOWER, B WING, NARIMAN POINT, MUMBAI 400 021. PAN: AAACM 5007 A VS. ASST. COMMISSIONER OF I.T. 5(2), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. DINESH AHIR. RESPONDENT BY : MR. SUMEET KUMAR. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMP UGNED ORDER OF THE LD. CIT[A] WHEREBY PENALTY U/S.271[1][C] AMO UNTING TO ` `` ` .36,691/- HAS BEEN CONFIRMED. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT TWO DISALLOWANCES WERE MADE IN THE ASSESSMENT, NAMELY, DISALLOWANCE O F DEDUCTION U/S.80IA AMOUNTING TO ` `` ` .1,04,832/- AND PARTIAL DISALLOWANCE U/S.33AC ON INTEREST INCOME AMOUNTING TO ` `` ` .6,76,496/-. A SHOW CAUSE NOTICE FOR LEVY OF PENALTY FOR THESE TWO ITEMS WAS ALSO ISSUED . IN RESPONSE, IT WAS MAINLY SUBMITTED THAT THE DISALLOWANCES WERE MAINLY MADE ON ACCOUNT OF DIFFERENCE OF OPINION AFTER RE-OPENING OF THE AS SESSMENT. THEREFORE, PENALTY WAS NOT LEVIABLE. HOWEVER, AO DID NOT FIND FORCE IN THIS SUBMISSION AND ULTIMATELY LEVIED THE PENALTY AT THE MINIMUM AMOUNTING TO ` `` ` .1,55,085/-. 2 3. ON APPEAL, THE LD. CIT[A] DELETED THE PENALTY IN RESPECT OF THE DISALLOWANCE MADE U/S.33AC BY FOLLOWING THE EARLIER YEARS ORDER. HOWEVER, IN RESPECT OF DISALLOWANCE OF DEDUCTION U/ S.80IA HE CONFIRMED THE PENALTY BY OBSERVING THAT THERE WAS N O BONA FIDE REASON FOR THE ASSESSEE NOT TO REDUCE THE DEDUCTION CLAIME D U/S.33AC WHILE COMPUTING THE DEDUCTION U/S.80IA. 4. BEFORE US, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ORIGINALLY ASSESSEE HAD CLAIMED DEDUCTION U/S.80IA AMOUNTING T O ` `` ` .2,82,468/- AND THE ASSESSMENT OF THE ASSESSEE WAS FINALISED U/ S.143[3] IN WHICH THE DEDUCTION WAS ALLOWED AT ` `` ` .1,04,832/-. WHEN THE NOTICE U/S.148 WAS ISSUED THE ASSESSEE MADE A CLAIM ONLY FOR ` `` ` .1,04,832/-. IN FACT, THERE WERE DIVERGENT VIEWS OF VARIOUS TRIBUNALS AND THE ASSESSEE, TO BE ON THE SAFER SIDE, CLAIMED THE DEDUCTION ONLY AT THE SAME AMOUNT WHICH WAS ALLOWED BY THE AO HIMSELF. HOWEVER, LATER ON IF THE SAME AMOUNT IS NOT FOUND TO BE ALLOWABLE, THEN IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY PARTICULARS OF ITS INCOM E OR MADE A WRONG CLAIM. MERELY BECAUSE THE CLAIM IS BONA FIDE AND UL TIMATELY FOUND TO BE NOT ALLOWABLE, WOULD BE NO REASON FOR LEVY OF PENAL TY. HE FURTHER SUBMITTED THAT IN IDENTICAL CIRCUMSTANCES, THE PENA LTY WAS DELETED IN ASSESSEES OWN CASE FOR THE A.Y 2000-01 IN I.T.A.NO .694/M/07 AND HE FILED A COPY OF THE TRIBUNALS ORDER FOR LATER YEAR AS WELL AS THE COPY OF THE ORIGINAL ASSESSMENT ORDER. 5. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS O F THE LOWER AUTHORITIES. 3 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. FROM THE ORIGINAL ASSESSMENT ORDER WE FIND THAT DEDUCTION U/ S.80IA, WHICH WAS CLAIMED AT ` `` ` .2,82,468/- WHEN THE ASSESSMENT WAS REOPENED, ASSES SEE ITSELF MADE A CLAIM FOR THE AMOUNT WHICH WAS ALREAD Y ALLOWED I.E. ` `` ` .1,04,832/-. FOR THIS CLAIM WHICH HAS ALREADY BEEN ALLOWED BY THE AO AND WAS AGAIN CLAIMED AND SIMPLY BECAUSE LATER ON W AS FOUND TO BE NOT ALLOWABLE, THEN NO FAULT CAN BE FOUND WITH THE ASSESSEE. IT CANNOT BE SAID, ON THESE FACTS, THAT ASSESSEE HAS CONCEALE D ANY PARTICULARS OF ITS INCOME. THE ASSESSEE HAS MERELY ASKED FOR THE D EDUCTION WHICH WAS ALLOWED BY THE AO HIMSELF IN THE ORIGINAL ASSES SMENT ORDER. THEREFORE, ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT SUCH CLAIM WAS ALLOWABLE. IN OUR VIEW, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY AND, THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT[A] AND DELETE THE PENALTY. 7. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF NOVEMBER, 2010. SD/- SD/- (N.V.VASUDEVAN) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 26 TH NOVEMBER, 2010. P/-* 4