The Assistant Comissioner of Income Tax, Circle-5, RAJKOT-GUJARAT V. M/s. Raj Clock Industries, Morbi

ITA 38/RJT/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0474 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 10-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: HARISH RANPURA
• Keywords: Wrong claim
• Section: 143(3); 80HHC; 80IB; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD] (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER) ITA NO: 38 & 39/RJT/2014 (ASSESSMENT YEAR: 2001-02 & 2003-04) A.C.I.T., CIRCLE-5, RAJKOT V/S M/S. RAJ CLOCK INDUSTRIES, 2, LATI PLOT, MORBI (APPELLANT) (RESPONDENT) PAN: AACFR4478C APPELLANT BY : SHRI C.S. ANJARIA, D.R. RESPONDENT BY : SHRI HARISH RANPURA, C.A. ( )/ ORDER DATE OF HEARING : 08-12-2015 DATE OF PRONOUNCEMENT : 11 -12-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THESE TWO APPEALS FILED BY THE REVENUE ARE AGAINST THE ORDER OF CIT(A)-IV, RAJKOT DATED 31.10.2013 FOR A.Y. 2001-02 & 2003-04 . ITA NO 38 & 39/RJT/2014 . A.YS. 2001- 02 & 2003-04 2 2. BEFORE US, AT THE OUTSET THE LD. D.R. SUBMITTED THA T THOUGH THE APPEALS OF REVENUE RELATES TO TWO DIFFERENT ASSESSMENT YEARS B UT THE FACTS AND CIRCUMSTANCES OF BOTH THE CASES ARE SIMILAR EXCEPT FOR THE ASSESSMENT YEARS AND AMOUNTS AND THE SUBMISSIONS ARE ALSO COMMON FOR BOTH THE APPEALS AND THEREFORE BOTH THE APPEALS CAN BE HEARD TOGETHER. L D A.R DID NOT OBJECT TO THE AFORESAID SUBMISSIONS OF LD. D.R. WE THEREFORE PROCEED TO DISPOSE OF BOTH THE APPEALS TOGETHER FOR THE SAKE OF CONVENIEN CE AND PROCEED WITH THE FACTS IN A.Y. 2001-02 IN ITA NO. 38/RJT/2014. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 4. ASSESSEE IS A REGISTERED FIRM STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF ELECTRONIC WALL CLOCKS AND CABINET . ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2001-02 ON 08.10.2001 DEC LARING TOTAL INCOME OF RS. 2,18,520/- AFTER CLAIMING DEDUCTION U/S. 80IB & 80HHC. THE ASSESSMENT WAS INITIALLY FRAMED U/S. 143(3) AND THE TOTAL INCO ME WAS DETERMINED AT RS. 21,09,200/- AFTER MODIFYING THE DEDUCTION U/S. 80IB & 80HHC. SUBSEQUENTLY IT WAS NOTICED BY THE A.O THAT ASSESSE E HAS CONSIDERED PROFITS FROM SALE OF DEPB LICENSE AS BEING DERIVED FROM EXP ORTS AND HAD CLAIMED DEDUCTION UNDER 80HHC ON IT. THEREFORE THE CASE WAS RE-OPENED BY ISSUING NOTICE U/S. 148 OF THE ACT AND THEREAFTER ASSESSMEN T WAS FRAMED U/S. 143(3) R.W.S. 147 VIDE ORDER DATED 25.08.2006 AND THE TOTA L INCOME WAS DETERMINED AT RS. 28,51,224/- AFTER REDUCING THE DEDUCTION U/S . 80HHC & 80IB. AGAINST THE ORDER OF A.O, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO VIDE ORDER DATED 06.02.2007 PARTLY ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE AND DIRECTED THE A.O TO RECOMPUTED THE DEDUCTION U/ S. 80HHC AND 80IB. AGAINST THE ORDER OF LD. CIT(A), REVENUE PREFERRED APPEAL BEFORE HONBLE ITA NO 38 & 39/RJT/2014 . A.YS. 2001- 02 & 2003-04 3 ITAT WHO VIDE ORDER DATED 17.06.2011 ALLOWED THE AP PEAL OF REVENUE AND SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORED THE ISSUE BACK TO A.O. PURSUANT TO THE DIRECTION OF ITAT, DEDUCTION UNDER 80IB AND 80HHC WAS REWORKED BY A.O AND THE DEDUCTION TO THE EXTENT OF RS. 18,64 ,136/- AND RS. 7,68,568/- U/S. 80IB AND 80HHC WAS DISALLOWED. ON THE AFORESAI D DENIAL OF DEDUCTION U/S. 80IB & 80HHC, A.O VIDE ORDER DATED 16.01.2012 CONCLUDED THAT THE WRONG CLAIM OF DEDUCTION ON THE PART OF ASSESSEE TA NTAMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME AND A WILLFUL A TTEMPT ON THE PART OF ASSESSEE TO EVADE TAX THEREBY RENDERING ASSESSEE TO PENAL ACTION U/S. 271(1)(C) OF THE ACT AND ACCORDINGLY LEVIED PENALTY OF RS. 10,32,020/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE LD. CIT(A) WHO VIDE HIS ORDER DATED 31.10.2013 DELETED THE PENALTY BY HOLDING AS UNDER:- 5.I HAVE PERUSED THE ASSESSMENT ORDER AND THE WRITT EN SUBMISSION FILED BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT. IT IS S EEN THAT, ALL THE DETAILS RELEVANT TO DEDUCTION U/S. 80HHC OF THE ACT WERE FURNISHED A LONG WITH RETURN OF INCOME, AS ALSO DURING THE COURSE OF ASSESSMENT PROCEEDINGS . NOTHING WAS KEPT AWAY FROM THE DEPARTMENT. THE CLAIMS OF DEDUCTIONS WERE ALSO EVIDENT FROM THE COMPUTATION OF INCOME ATTACHED WITH THE RETURN OF INCOME AND DU LY SUPPORTED BY AUDIT REPORT IN FORM NO. 10CCB. WHEN THE FACTS, AS SUBMITTED ABO VE, WERE APPARENT IN COMPUTATION OF INCOME ATTACHED WITH THE RETURN, IT CANNOT BE SAID THAT THE APPELLANT HAS CONCEALED OR FURNISHED INACCURATE PAR TICULARS OF INCOME. THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. (2010) 322 ITR 158 (SC), WHEREIN IT IS HELD THAT: 'A MERE MAKING OF CLAIM, WHICH IS NOT SUSTAINABLE I N LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS '. ITA NO 38 & 39/RJT/2014 . A.YS. 2001- 02 & 2003-04 4 6.IN THE CASE OF THE APPELLANT, NO INFORMATION GIVE N IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEM ENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. THE DISALLOWAN CE WAS MADE MERELY BECAUSE OF TWO DIFFERENT INTERPRETATIONS. I ALSO FIND THAT, DURING THE RELEVANT TIME, TWO DIVERGENT VIEWS OF DIFFERENT HIGH COURTS WERE PREVA LENT. OBVIOUSLY, THE APPELLANT WOULD RELY UPON THE DECISION FAVORABLE TO IT. BUT I N NO WAY IT MEANS THAT THERE WAS DELIBERATE AND WILLFUL ATTEMPT ON THE PART OF T HE APPELLANT TO THE CONCEAL THE PARTICULARS OF ITS INCOME. THOUGH THE ISSUE MAY BE FIT FOR LEVYING TAX, IT IN NO WAY IS A FIT CASE FOR LEVYING OF PENALTY. IN THE RESULT , THE PENALTY LEVIED AT RS, 10,32,020/- STANDS DELETED. 5. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), RE VENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFECTIVE GR OUND:- 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW T HE LD. CIT(A) HAS ERRED IN DELETING RS. 10,32,020/- PENALTY LEVIED U/S. 271(1)(C) OF TH E IT ACT FOR FILING OF INACCURATE PARTICULARS OF INCOME. 6. BEFORE US, LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND LD. CIT(A) AND SUPPORTED THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS ABOUT LEVY OF PENA LTY U/S. 271(1)(C) ON THE DEDUCTIONS U/S. 80IB & 80HHC THAT WERE DENIED BY TH E A.O. WE FIND THAT AMOUNT OF DEDUCTION U/S. 80IB & 80HHC AS WORKED OUT BY THE ASSESSEE WAS REWORKED AND AMENDED BY A.O WHICH ALSO UNDERWEN T A CHANGE PURSUANT TO APPELLATE PROCEEDINGS MEANING THEREBY T HAT THE WORKING OF DEDUCTION WAS DUE TO DIFFERENT INTERPRETATIONS AND WERE DEBATABLE IN ITA NO 38 & 39/RJT/2014 . A.YS. 2001- 02 & 2003-04 5 NATURE. WE FURTHER FIND THAT LD. CIT(A) WHILE ORDER ING THE DELETION OF PENALTY HAS GIVEN A FINDING THAT NO INFORMATION GIV EN IN THE RETURN OF INCOME BY THE ASSESSEE WAS FOUND TO BE INCORRECT OR INACCURATE AND THE DISALLOWANCE WAS MADE PURELY BECAUSE OF THE TWO DIF FERENT INTERPRETATIONS. HE HAS FURTHER NOTED THAT ALL THE DETAILS RELEVANT FOR CLAIMING OF DEDUCTIONS WERE FURNISHED DURING THE CO URSE OF ASSESSMENT PROCEEDINGS AND NOTHING WAS KEPT AWAY FROM DEPARTME NT. HE THEREAFTER RELYING ON THE DECISION OF HONBLE APEX COURT IN TH E CASE OF CIT VS. RELIANCE PETRO PRODUCTS (2010) 322 158 (SC) DELETED THE PENALTY. BEFORE US, REVENUE HAS NOT POINTED OUT ANY FALLACY IN THE FINDINGS OR CONCLUSION OF LD. CIT(A). IN VIEW OF THESE FACTS, WE FIND NO R EASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) THUS THE GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. NOW WE TAKE UP IN ITA NO. 39/RJT/2014 (FOR A. Y. 2003-04) 9. IN THE PRESENT CASE, SINCE BOTH THE PARTIES BEFORE US HAVE ADMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE ARE IDENTICAL T O THAT OF A.Y 2001-02 (IN ITA NO. 38/RJT/2014) WHICH WE HAVE DECIDED HEREINAB OVE, WE THEREFORE FOR THE SIMILAR REASONS AS STATED HEREINABOVE WHILE DEC IDING THE APPEAL FOR A.Y. 2001-02 IN ITA NO. 38/RJT/2014 (SUPRA) DISMISS THE GROUND OF REVENUE IN THE PRESENT APPEAL. ITA NO 38 & 39/RJT/2014 . A.YS. 2001- 02 & 2003-04 6 10. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON 11- 12 - 2015. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT