INDOBUILT STORAGE SYSTEMS P. LTD, MUMBAI V. ASSTCIT 10(3), MUMBAI

ITA 436/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79316 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 02-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 19-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B N RAO
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 436/MUM/2012 ASSESSMENT YEAR: 2008-09 M/S. INDOBUILT STORAGE SYSTEMS PVT. LTD. 130, RUNWAL COMMERCIAL COMPLEX, LBS MARG, MULUND (W), MUMBAI-80 PAN:-AAACI 4993 H VS. ACIT-10(3) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B.N. RAO REVENUE BY : SHRI SUNIL AGRAWAL DATE OF HEARING : 02.07.2014 DATE OF PRONOUNCEMENT : 02.07.2014 O R D E R PER DR. STM PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-22, MUMBAI DATED 30.12.2011 CONFIRMING TH E PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 2008-0 9. 2. THE RELEVANT FACTS ARE THAT THE ASSESSE, A COMPA NY ENGAGED IN THE BUSINESS OF MANUFACTURING OF SLOTTED ANGLES WHILE DECLARING A TOTAL INCOME OF RS.86,43,690/-, HAD CLAIMED AN EXCESS DEDUCTION OF RS.24,16,574/- U /S 80IB OF THE INCOME TAX ACT. THE SAID EXCESS CLAIM WAS DUE TO THE INCLUSION IN T HE PROFIT OF DAMAN UNIT WHICH WAS ELIGIBLE FOR DEDUCTION U/S 80IB, AN AMOUNT OF RS.22 ,50,000/- BEING INTEREST BASED ON A NOTIONAL ACCOUNT ENTRY ALLOCATING THE SAME FROM N ON U/S 80IB UNIT TO THE ABOVE UNIT. FURTHER, THE ASSESSEE HAD CLAIMED DEDUCTION U /S 80IB IN RESPECT OF MISCELLANEOUS RECEIPTS OF RS.1,66,574/- WHICH COMPR ISED OF FDR INTEREST. SINCE THE SAID INCOMES INCLUDED UNDER PROFIT OF THE U/S 80IB UNIT ARE NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S 80IB AS THE SAME WERE NOT DERIVED FRO M THE MANUFACTURING ACTIVITY AND ALSO BECAUSE OF THE FACT THAT THE INTEREST OF R S.22,50,000/- WAS ONLY A NOTIONAL ITA NO. 436/MUM/2012 M/S. INDOBUILT STORAGE SYSTEMS PVT. LTD. ASSESSMENT YEAR: 2008-09 2 ACCOUNTING ENTRY, THE SAID AMOUNTS WERE DISALLOWED ADDED TO THE INCOME OF THE ASSESSEE. CONSEQUENTLY IN THE PENALTY PROCEEDING, T HE AO WAS OF THE VIEW THAT THE ASSESSE CONCEALED ITS INCOME TO THE EXTENT OF RS.24 ,16,574/- BY CLAIMING WRONGFUL DEDUCTION TO THAT EXTENT. THEREFORE, THE AO LEVIED THE IMPUGNED PENALTY @ 100% OF RS.10,89,948/- BEING THE TAX ON INCOME SOUGHT TO BE EVADED. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS RELEVANT TO STATE THAT THE ASSESSE HAD CLAIMED DEDUCTION U/S 80IB FOR ITS DAMAN UNIT AMOUNTING TO RS.1,73,62,306/-. IN THE ASSESSMENT FR AMED U/S 143(3), THE AO ASKED THE ASSESSEE TO SUBMIT THE UNIT WISE PROFIT AND LOS S AND THE DETAILS THEREOF. THE ASSESSEE VIDE ITS LETTER DATED 28.07.2010 SUBMITTED THE DETAILS AND ALSO VIDE ITS LETTER DATED 18.08.2010 WHEREIN IT HAS BEEN STATED THAT THE SAID AMOUNT OF RS.22.50 LAKHS SHOWN AS INCOME IN DAMAN UNIT HAS BEEN MISSED OUT TO BE ADDED BACK IN THE ATGAON UNIT AS DISALLOWABLE IN THE STATEMENT OF TOT AL INCOME. SIMILAR IS THE POSITION WITH THE OTHER MISCELLANEOUS RECEIPTS OF RS.1,66,57 4/-. ON DISCLOSURE OF THE SAID MISTAKE IN THE COMPUTATION OF INCOME, THE AO DISALL OWED THE SAID AMOUNTS FOR THE PURPOSE OF CALCULATING THE CLAIM OF DEDUCTION U/S 8 0IB. CONSIDERING THE ENTIRE FACTUAL ASPECT OF THE CASE, WE ARE INCLINED TO ACCEPT ARGUM ENT OF THE LD. AR THAT THERE WAS A BONA FIDE MISTAKE IN CLAIMING DEDUCTION AND THE S AME HAS BEEN BROUGHT TO THE NOTICE OF THE AO WHICH RESULTED IN THE DISALLOWANCE OF THE SAID AMOUNTS. IN VIEW OF THE FACT THAT THE ASSESSEE HAS INCLUDED THE SAID AM OUNTS DUE TO BONA FIDE MISTAKE, THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN MAKING/C ONFIRMING THE LEVY OF IMPUGNED PENALTY AND THUS THE SAME IS DELETED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND DAY OF JULY, 2014. SD/- SD/- (N.K. BILLAIYA) (DR. S.T.M.PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 02.07.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR I BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.