DCIT 22(3), NAVI MUMBAI V. SURESH S. KHILARI, NAVI MUMBAI

ITA 4403/MUM/2009

• Counselvise Citation: 440319914 RSA 2009
• Duration Of Justice: 4 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 09-07-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 22-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: S ATISH CHANDAK
• Keywords: Wrong claim; Difference of opinion

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.4403/MUM/2009 ( / ASSESSMENT YEAR :2005-06 ) DY. COMMISSIONER OF INCOME TAX, 22(3), 3 RD FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI. / VS. SURESH S KHILARI 101, PRABHAT CENTRE ANNEX, SECTOR-6, CBD, BELAPUR, NAVI MUMBAI-400614 ( / APPELLANT) .. ( !' / RESPONDENT) ./ #$ ./PAN/GIR NO. : AAJPK7584J % / APPELLANT BY : SHRI PITAMBAR DAS !' & % /RESPONDENT BY : SHRI SATISH CHANDAK ' & ( ) / DATE OF HEARING : 9 .7.2014 *+ & ( ) /DATE OF PRONOUNCEMENT : 9. 7.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 20.04.2009 PASSED BY LD CIT(A)-22, MUMBAI AND IT RE LATES TO THE ASSESSMENT YEAR 2005-06. 2. THE REVENUE IS CHALLENGING THE DECISION OF L D CIT(A) IN CANCELLING THE PENALTY OF RS.4,75,000/- LEVIED BY THE AO U/S 271(1 )(C) OF THE ACT. I.T.A. NO.4403/MUM/2009 2 3. THE FACTS WHICH LED TO LEVY OF PENALTY ARE S TATED IN BRIEF. IN THE RETURN OF INCOME, THE ASSESSEE DECLARED CONTRACT RECEIPTS OF RS.94.20 LAKHS AND THE SAID RECEIPTS ARE SAID TO BE FOR PROCESSING OF BIO-DEGRA DABLE WASTE. THE ASSESSEE CLAIMED DEDUCTION U/S 80JJA OF THE ENTIRE AMOUNT OF PROFIT OF RS.14,13,142/-. THE AO EXAMINED THE CONTRACT DOCUMENTS AND NOTICED THAT THE CONTRACT WAS GIVEN TO THE ASSESSEE ONLY FOR OPERATION & MAINTENA NCE OF LAND FILL SITE. ACCORDINGLY, THE AO TOOK THE VIEW THAT THE WORK ORD ER DOES NOT STATE ANYTHING ABOUT PROCESSING OR TREATING OF BIO-DEGRADABLE WAST E. ACCORDINGLY, THE AO TOOK THE VIEW THAT THE SCOPE OF WORK CARRIED OUT BY THE ASSESSEE DOES NOT QUALIFY FOR DEDUCTION U/S 80JJA OF THE ACT AND ACCORDINGLY DISA LLOWED THE SAME. THE SAID DISALLOWANCE WAS CONFIRMED BY THE TRIBUNAL ALSO. T HE AO LEVIED PENALTY ON THE DISALLOWANCE OF SEC. 80JJA OF THE ACT. THE LD CIT( A), HOWEVER, DELETED THE PENALTY. HENCE, THE REVENUE HAS FILED THIS APPEAL BEFORE US. 4. THE LD D.R SUBMITTED THAT THE DISALLOWANCE O F CLAIM MADE U/S 80JJA HAS ALSO BEEN CONFIRMED BY THE TRIBUNAL. HE FURTHER SU BMITTED THAT THE DISALLOWANCE OF CLAIM FOR DEDUCTION WOULD INCREASE THE PROFIT AN D HENCE THE WRONG CLAIM WOULD ALSO LEAD TO CONCEALMENT OF INCOME. IN THIS REGARD, THE LD D.R PLACED RELIANCE ON THE FOLLOWING CASE LAW:- (A) CIT VS. MORGAN FINVEST PVT LTD (ITA 1855/2010 DT. 6-12-2012)(DELHI) (B) CIT VS. ZOOM COMMUNICATIONS P LTD (2010)(327 I TR 510)(DEL) 5. ON THE CONTRARY, THE LD A.R SUBMITTED THAT T HE ASSESSEE WAS PROCESSING THE BIO-DEGRADABLE WASTE AND HENCE CLAIMED DEDUCTIO N U/S 80JJA OF THE ACT. HOWEVER, THE AO DISALLOWED THE SAID CLAIM BY EXAMIN ING THE CONTRACT DOCUMENTS. INVITING OUR ATTENTION TO THE ORDER DAT ED 28-12-2012 PASSED BY THE TRIBUNAL, THE LD A.R SUBMITTED THAT THE TRIBUNAL HA S AFFIRMED THE FACT THAT THE I.T.A. NO.4403/MUM/2009 3 ASSESSEE WAS CARRYING ONE OF THE ACTIVITIES PRESCRI BED IN SEC. 80JJA, BUT CONFIRMED THE DISALLOWANCE ONLY ON THE REASONING TH AT ALL THE CONDITIONS PRESCRIBED IN THAT SECTION SHOULD BE CUMULATIVELY F ULFILLED. ACCORDINGLY, THE LD A.R SUBMITTED THAT THERE WAS GENUINE DIFFERENCE OF OPINION ABOUT THE ELIGIBILITY TO CLAIM DEDUCTION U/S 80JJA OF THE ACT AND HENCE T HE SAID CLAIM, WHICH IS NOT UNSUSTAINABLE IN LAW, WOULD NOT GIVE RISE TO PENALT Y. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE RECORD. THE PENALTY, IN THE INSTANT CASE, HAS BEEN LEVIED WITH REGARD TO THE DISALLOWANCE OF CLAIM FOR DEDUCTION U/S 80JJA OF THE ACT. THOUGH THE ASSESSE E CLAIMED THAT HE WAS ENGAGED IN PROCESSING OF BIO-DEGRADABLE WASTE, THE AO TOOK THE VIEW THAT THE ASSESSEE IS ENGAGED ONLY IN OPERATION AND MAINTENAN CE OF LAND FILL SITE AND HE DID NOT ENGAGE HIMSELF IN PROCESSING OF WASTE AND A CCORDINGLY DISALLOWED THE CLAIM FOR DEDUCTION U/S 80JJA OF THE ACT. NOW THE QUESTION THAT ARISES BEFORE US IS WHETHER THE SAID DISALLOWANCE WOULD GIVE RISE TO PENALTY U/S 271(1)(C) OF THE ACT. IN THE QUANTUM PROCEEDING, THE TRIBUNAL HAS T AKEN THE VIEW THAT THE ASSESSEE HAS BEEN CARRYING ON ONE OF THE ACTIVITIES PRESCRIBED IN SEC. 80JJA OF THE ACT, BUT CONFIRMED THE DISALLOWANCE ON THE REAS ONING THAT THE ASSESSEE HAS TO CUMULATIVELY FULFILL ALL THE CONDITIONS PRESCRIB ED IN THAT SECTION. 7. WE NOTICE THAT THE ASSESSEE HAS FURNISHED TH E DETAILS OF PROCESSING CARRIED ON BY HIM ON THE WASTE COLLECTED BY HIM BEFORE THE TAX AUTHORITIES AND THE SAME WAS ALSO RECORDED BY THE AO/ CIT(A) IN THE PENALTY ORDER. ACCORDINGLY, THE ASSESSEE HAS CONTENDED THAT IT HAS FULFILLED THE CO NDITIONS PRESCRIBED IN SEC. 80JJA OF THE ACT. HOWEVER, THE AO HAS REJECTED THE SAID CLAIM BY EXAMINING THE CONTRACT DOCUMENTS. IN EFFECT, THE CLAIM OF PROCES SING CARRIED ON BY THE I.T.A. NO.4403/MUM/2009 4 ASSESSEE WAS NOT EXAMINED BY THE AO. THUS, IT IS S EEN THAT THE ASSESSEE HAS GIVEN EXPLANATIONS IN SUPPORT OF THE CLAIM MADE U/S 80JJA OF THE ACT AND THE SAME WAS NOT FOUND TO BE FALSE. THE HONBLE SUPREM E COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT LTD (2010)(322 ITR 158)(SC) HAS EXPRESSED THE VIEW THAT MAKING OF A CLAIM, WHICH WAS FOUND TO BE UNSUSTAINABLE IN LAW, WOULD NOT GIVE RISE TO PENALTY. IT IS NOT THE CASE OF T HE AO THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS RELATING TO THE CL AIM OR CONCEALED ANY PARTICULARS THEREOF. HENCE, IN OUR VIEW, THE LD CIT(A) WAS JUS TIFIED IN DELETING THE PENALTY. ACCORDINGLY, WE UPHOLD HIS ORDER. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 9TH JULY, 2014 . *+ ' , -. / 0 9TH JULY, 2014 + & 2 3 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER - ' MUMBAI: 9 TH JULY,2014. . . ./ SRL , SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. ' 5( ( ) / THE CIT(A)- CONCERNED 4. ' 5( / CIT CONCERNED 5. 67 2 !(8 , ) 8 , - ' / DR, ITAT, MUMBAI CONCERNED 6. 2 9 : / GUARD FILE. ; ' / BY ORDER, TRUE COPY < # (ASSTT. REGISTRAR) ) 8 , - ' /ITAT, MUMBAI