ACIT, CHENNAI V. Siva Ventures Ltd., CHENNAI

ITA 418/CHNY/2014

• Counselvise Citation: 41821714 RSA 2014
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 18-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI IRS
• Section: 2; 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . . !' , # '$ % BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENTAND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NO. 418/MDS/2014 # & '& / ASSESSMENT YEAR : 2007-08 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(3), CHENNAI - 600 034. V. M/S SIVA VENTURES LTD., STERLING TOWER, 327, ANNA SALAI, TEYNAMPET, CHENNAI - 600 006. PAN : AAACS 8496 D ()*/ APPELLANT) (,-)*/ RESPONDENT) )* . / APPELLANT BY : SHRI ANIRUDH RAI, IRS, CIT ,-)* . / RESPONDENT BY : NONE / . 01 / DATE OF HEARING : 6 TH MAY, 2014 2!' . 01 / DATE OF PRONOUNCEMENT : 6 TH MAY, 2014 / O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS APPEAL FILED BY THE REVENUE RELATES TO ASSES SMENT YEAR 2007-08. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI AT CHENNAI, DATED - - I.T.A. NO. 418/MDS/14 2 31 ST OCTOBER, 2013. THE APPEAL ARISES OUT OF THE PENAL TY ORDER PASSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX AC T, 1961. 2. THE GROUND RAISED BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D IRECTING THE ASSESSING OFFICER TO RESTRICT THE PENALTY LEVIE D UNDER SECTION 271(1)(C) TO THE EXTENT OF CONCEALMENT OF INCOME OF ` 2 CRORES ONLY, AS AGAINST ` 4,56,61,617/- LEVIED UNDER SECTION 271(1)(C) ON THE TOTAL DISALLOWANCE MADE FOR ` 6,99,13,379/- OF UPWARD ADJUSTMENT UNDER SECTION 92CA AND ` 8,22,92,012/- UNDER SECTION 14A AS PROPORTIONATE EXPENSES FOR EARNING T HE DIVIDEND INCOME. IT IS THE CASE OF THE REVENUE THAT THE COM MISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN RELYING ON THE OR DER OF THE ITAT IN ASSESSEE'S OWN CASE IN I.T.A. NO. 2161/MDS/ 2011 DATED 27.6.2013, WHICH HAS BEEN TAKEN BY THE DEPARTMENT I N APPEAL BEFORE HONBLE HIGH COURT OF MADRAS. 3. SHRI ANIRUDH RAI, THE LEARNED COMMISSIONER OF IN COME TAX APPEARED FOR THE REVENUE AND PRESENTED THE CASE . THERE WAS NO APPEARANCE FOR THE RESPONDENT-ASSESSEE INSPI TE OF NOTICE. ACCORDINGLY, WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE, QUA, THE ASSESSEE. - - I.T.A. NO. 418/MDS/14 3 4. ON THE CORRESPONDING QUANTUM APPEAL FILED, THE I NCOME TAX APPELLATE TRIBUNAL IN I.T.A. NO. 2161/MDS/2011 HAS DELETED THE DISALLOWANCE OF INTEREST OF ` 6,99,13,379/- MADE IN THE ASSESSMENT IN THE LIGHT OF THE UPWARD ADJUSTMENT MA DE UNDER SECTION 92CA. THE UPWARD ADJUSTMENT MADE IN THE T. P. ASSESSMENT HAS ALREADY BEEN DELETED BY THE TRIBUNAL . THE TRIBUNAL HAS ALSO REDUCED THE DISALLOWANCE OF EXPEN DITURE UNDER SECTION 14A FROM ` 8,22,92,012/- TO ` 2 CRORES. ULTIMATELY, THE QUANTUM ADDITION SUSTAINED BY THE ITAT IS ONLY ` 2 CRORES. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS MODIFIED T HE QUANTUM OF THE PENALTY IN PURSUANCE OF THE MODIFIED AMOUNT OF ` 2 CRORES IN THE QUANTUM APPEAL. 5. IT IS TO BE SEEN THAT PENALTY UNDER SECTION 271( 1)(C) IS ALWAYS LEVIED ON THE QUANTUM OF CONCEALMENT OF INCO ME MADE BY THE ASSESSEE. THE BASIS OF COMPUTING THE PENALT Y UNDER SECTION 271(1)(C) IS TO CORRESPONDING ADDITION MADE IN THE QUANTUM ASSESSMENT AND THERE MUST BE A NEXUS BETWEE N THE QUANTUM OF ADDITION AND THE AMOUNT OF PENALTY. THE REFORE, WHEN THE TRIBUNAL HAS CONFINED THE ADDITION TO ` 2 CRORES, THE PENALTY UNDER SECTION 271(1)(C) COULD BE LEVIED ONLY ON THA T AMOUNT. - - I.T.A. NO. 418/MDS/14 4 6. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) RELYING ON THE ORDER OF THE ITAT IN THE QUANTUM APP EAL CANNOT BE QUESTIONED ONLY FOR THE REASON THAT THE REVENUE HAS TAKEN UP THE QUANTUM AMOUNT IN APPEAL BEFORE THE HONBLE HIG H COURT OF MADRAS. 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PRESENT APPEAL OF THE REVENUE IS WITHOUT ANY MERIT. 8. IN RESULT, THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON TUESDAY, THE 6 TH OF MAY, 2014 AT CHENNAI. SD/- SD/- (S.S. GODARA) (DR. O.K. NARAYANAN) ( . . !') ( . . . ) # '$ /JUDICIAL MEMBER /VICE-PRESIDENT /CHENNAI, 4' /DATED, THE 6 TH MAY, 2014. KRI. '5 . ,#067 87'0 /COPY TO: 1. )* /APPELLANT 2. ,-)* /RESPONDENT 3. / 90 () /CIT(A)-VI, CHENNAI-34 4. / 90 /CIT-VI, CHENNAI 5. 7: ,#0# /DR 6. & ; /GF.