Emtici Engineering Ltd., Anand V. The Dy.CIT.,Anand Circle, Anand

ITA 40/AHD/2012

• Counselvise Citation: 4020514 RSA 2012
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-05-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 05-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: M K PATEL
• Keywords: Difference of opinion

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G.C.GUPTA VICE-PRESIDENT(AZ) AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A. NO.40/AHD/2012 ( / / / / ASSESSMENT YEAR : 2005-06) EMTICI ENGINEERING LTD. ANAND SOJITRA ROAD VALLABH VIDYA NAGAR- ANAND 388 120 (GUJ.) / VS. THE DY.CIT ANAND CIRCLE ANAND !' ./#$ ./ PAN/GIR NO. : AAACE 4642 F ( % / // / APPELLANT ) .. ( &' % / RESPONDENT ) % ( ! / APPELLANT BY : SHRI M.K.PATEL &' % ) ( ! / RESPONDENT BY : SHRI RAHUL KUMAR, SR.D.R. *+ ) ,-' / / / / DATE OF HEARING : 10/05/2012 ./ ) ,-' / DATE OF PRONOUNCEMENT : 1.6.12 !0 / O R D E R PER SHRI G.C.GUPTA, VICE PRESIDENT (AZ): THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IS DIRECTED AGAINST THE ORDER OF THE LD.CIT(APPEALS)-I V, BARODA DATED 24/10/2011. THE ONLY ISSUE IN THE GROUND OF APPEAL OF THE ASSESSEE IS REGARDING THE VALIDITY OF PENALTY IMPOSED U/S.271(1 )(C) OF THE I.T.ACT AMOUNTING TO RS.76,500/-. 2. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT, IT IS A CASE OF DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE DEPARTMENT REGARDING ALLOWABILITY OF CERTAIN CLAIM OF DEDUCTIO N MADE BY THE ASSESSEE ON WHICH PENALTY U/S.271(1)(C) OF THE I.T.ACT COULD NOT BE LEGALLY ITA NO. 40/AHD/2012 EMTICI ENGG.LTD. VS. DCIT ASST.YEAR - 2005-06 - 2 - IMPOSED. HE SUBMITTED THAT THE PENALTY U/S.271(1)( C) OF THE I.T.ACT HAS BEEN IMPOSED ON DISALLOWANCE ON ACCOUNT OF SOFTWARE AND HARDWARE EXPENSES OF RS.82,250/- BY HOLDING THEM AS NOT REVE NUE IN NATURE AND BY DISALLOWING INTEREST PERTAINING TO INVESTMENT IN SH ARES AMOUNTING TO RS.1,20,685/- U/S.14A OF THE I.T.ACT AND THE DISALL OWANCE OF RS.5,900/- ONLY OUT OF COMPUTER EXPENSES. HE SUBMITTED THAT T HE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. REP ORTED AT (2010) 322 ITR 158 (SC). 3. THE LD.DR HAS OPPOSED THE SUBMISSION OF LD.COUNS EL FOR THE ASSESSEE. HE SUBMITTED THAT THESE DISALLOWANCES WE RE MADE AS A RESULT OF DEEP SCRUTINY AND BY CLAIMING EXPENDITURE AS REVENU E EXPENDITURE, THE ASSESSEE HAS REDUCED ITS TAX LIABILITY. HE SUBMITT ED THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME IN RESPECT O F THESE DISALLOWANCES AND, THEREFORE, THE ASSESSING OFFICER HAS CORRECTLY LEVIED PENALTY U/S.271(1)(C) OF THE I.T.ACT. HE RELIED ON THE DEC ISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATIO N PVT.LTD. REPORTED AT (2010) 327 ITR 510(DEL.). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE ORDERS OF THE ASSESSING OFFICER AND LEARNED CIT(APP EALS). WE FIND THAT THE PENALTY U/S.271(1)(C) WAS LEVIED ON THE GROUND OF DISALLOWANCE ON ACCOUNT OF SOFTWARE AND HARDWARE EXPENSES HELD AS C APITAL IN NATURE BY THE DEPARTMENT AND THE INTEREST PERTAINING TO INVES TMENT IN SHARES DISALLOWANCE U/S.14A OF THE I.T.ACT AND THE SMALL D ISALLOWANCE OF RS.5,900/- SUSTAINED BY THE LEARNED CIT(APPEALS) OU T OF COMPUTER EXPENSES CLAIMED BY THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS ITA NO. 40/AHD/2012 EMTICI ENGG.LTD. VS. DCIT ASST.YEAR - 2005-06 - 3 - DISCLOSED ALL MATERIAL FACTS NECESSARY FOR ITS ASSE SSMENT WITH REGARD TO THE CLAIM OF DEDUCTION OF THE ABOVE-MENTIONED AMOUNT BE FORE THE ASSESSING OFFICER. IT IS A CASE OF DIFFERENCE OF OPINION BET WEEN THE ASSESSEE AND THE DEPARTMENT WITH REGARD TO ALLOWABILITY OR OTHER WISE OF CERTAIN DEDUCTION CLAIMED BY THE ASSESSEE. IT IS NOT THE L AW THAT IN EVERY CASE WHEREVER A DISALLOWANCE IS MADE AS A RESULT OF SCRU TINY OR OTHERWISE, THE ASSESSEE WILL BE LIABLE TO PAY PENALTY U/S.271(1)(C ) OF THE I.T.ACT. THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF HON'BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRO DUCTS (P) LTD. REPORTED AT (2010) 322 ITR 158 (SC) AND, ACCORDINGL Y, WE HOLD THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF THE I.T.ACT, WHICH IS ACCORDINGLY CANCELLED AND THE GROUND OF APPEAL OF T HE ASSESSEE IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. SD/- SD/- (A. MOHAN ALANKAMONY) ( G. C. GUPTA ) ACCOUNTANT MEMBER VICE PRESID ENT (AZ) AHMEDABAD; DATED 01/ 06 /2012 1-.., .../ T.C. NAIR, SR. PS !0 ) &,2 3!2, !0 ) &,2 3!2, !0 ) &,2 3!2, !0 ) &,2 3!2,/ COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &' % / THE RESPONDENT. 3. , *4 / CONCERNED CIT 4. *4() / THE CIT(A)-IV, BARODA 5. 278 &, , , / DR, ITAT, AHMEDABAD 6. 89 :+ / GUARD FILE. !0* !0* !0* !0* / BY ORDER, '2, &, //TRUE COPY// ; ;; ;/ // / # # # # ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD