ITO, Panipat V. M/s Gupta International, Panipat

ITA 4465/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5760 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-03-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 23-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Assessee Lawyers: GURJET SINGH
• Keywords: Question of law; Wrong claim
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 4465/DEL/2009 ASSESSMENT YEAR: 2004-05 ITO, WARD 1, PANIPAT. VS. GUPTA INTERNATIONAL, SHIV NAGAR, BEHIND GANDHI MANDI, PANIPAT. AACFG0217F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANISH GUPTA, SR. DR RESPONDENT BY: GURJET SINGH, AR O R D E R PER I.P. BANSAL, J.M. THIS PRESENT APPEAL IS FILED BY THE REVENUE AND I T IS DIRECTED AGAINST THE ORDER OF CIT(A) DATED 16 TH SEPTEMBER, 2009 FOR A.Y. 2004- 05. GROUNDS OF APPEAL READ AS UNDER: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN DELETING THE PENALTY IMPOSED U/S 271(1)(C) OF THE I NCOME TAX ACT, 1961 IMPOSED ON THE BASIS OF WRONG CLAIM OF DEDUCTION U/ S 80IB OF THE INCOME TAX ACT, 1961. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD, D ELETE OR AMEND THE GROUNDS OF APPEAL, BEFORE OR AT THE TIME OF HEA RING OF APPEAL 2. CONCEALMENT PENALTY IN THE PRESENT CASE WAS LEVI ED BY THE AO ON ASSESSEE ON CLAIM OF DEDUCTION U/S 80IB ON EXPORT I NCENTIVES IN THE SHAPE OF DUTY DRAWBACK/DEPB BY TREATING THE SAME AS INCOME DERIVED 2 ITA NO. 4465/DEL/2009 FROM INDUSTRIAL UNDERTAKING. THE RETURN WAS FILED ON 30 TH OCTOBER, 2004 THE SAID CLAIM OF THE ASSESSEE WAS DISALLOWED BY TH E AO AND ON SUCH DISALLOWANCE CONCEALMENT PENALTY HAS BEEN LEVIED. PENALTY LEVIED HAS BEEN DELETED BY CIT(A) ON THE GROUND THAT IN THE PR ESENT CASE TWO VIEWS WERE CLEARLY POSSIBLE THE ISSUE OF DEDUCTION U/S 80 IB IN RESPECT OF DUTY DRAWBACK AND DEPB WAS SUPPORTED BY THE ORDERS OF IT AT AS WELL AS DECISION OF HONBLE HIGH COURTS. THE ASSESSEE DID NOT FURNISH ANY INACCURATE PARTICULARS OR CONCEDE ANY PARTICULARS T HE CLAIM OF THE ASSESSEE WAS SUPPORTED BY THE CERTIFICATE OF CHARTE RED ACCOUNTANT. THE PENALTY IS LEVIED MERELY BECAUSE THE CLAIM WAS NOT ALLOWED AND FOLLOWING THE DECISION IN THE CASE OF M/S ORIENTAL RUG COMPAN Y VS. ACIT ITA NO. 3629 & 3630/DEL/08 ORDER DATED 2 ND APRIL, 2009 FOR A.Y. 2001-02 AND 2002-03 THE RELEVANT PORTION OF WHICH IS REPRODUCED IN THE ORDER OF CIT(A), HAS DELETED THE PENALTY AND AGAINST SUCH FI NDING OF LD. CIT(A) AND DELETION OF PENALTY THE ABOVE GROUNDS OF APPEAL HAVE BEEN RAISED. 3. LD. DR AFTER NARRATING THE FACTS RELYING UPON TH E ORDER OF AO CONTENDING THAT ASSESSEE WRONGLY CLAIM THE DEDUCTIO N ON THE COMPONENTS OF DUTY DRAWBACK AND DEPB WHICH WAS CLEA RLY INADMISSIBLE TO THE ASSESSEE AS PER DECISION OF JURISDICTIONAL H IGH COURT AND DECISION OF HONBLE APEX COURT IN THE CASE OF M/S LIBERTY IN DIA LTD. AND, THEREFORE, LD. CIT(A) WAS WRONG IN DELETING THE PEN ALTY. HE PLEADED THAT THE ORDER OF AO SHOULD BE RESTORED AND THAT OF CIT( A) SHOULD BE SET ASIDE. 3 ITA NO. 4465/DEL/2009 4. ON THE OTHER HAND, IT WAS SUBMITTED THAT THE ISS UE OF LEVY OF PENALTY ON THE CLAIM OF DEDUCTION U/S 80IB WITH RES PECT TO DUTY DRAWBACK AND DEPB WAS CONSIDERED BY DELHI BENCHES OF ITAT VI DE ORDER DATED 22.01.2010 IN ITA NO. 4448/D/09 IN THE CASE OF ACIT VS. TEXTILE WORD, PANIPAT AND IT WAS HELD THAT PENALTY COULD NOT BE L EVIED. HE HAS PRODUCED BEFORE US A COPY OF THE SAID ORDER WHICH W AS ALSO GIVEN TO LD. DR. IT WAS PLEADED THAT WHILE HOLDING SO ITAT WAS RELIED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. ARISUDHNA SPINNING MILLS LTD. THUS, IT WAS PLEADED THAT THE ISSUE RAISED BY REVENUE IN THIS APPEAL IS COVERED IN FAVOUR OF A SESSEE BY THE AFOREMENTIONED DECISION OF TRIBUNAL. THEREFORE, TH E ORDER OF CIT(A) SHOULD BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE SIMILAR ISSUE WAS C ONSIDERED BY THIS TRIBUNAL IN THE AFOREMENTIONED CASE OF ACIT VS. TEX TILE WORD IN WHICH IT WAS HELD THAT CIT(A) WAS RIGHT IN DELETING THE PENA LTY. FOR THE SAKE OF CONVENIENCE THE SAID ORDER IN ITS ENTIRETY IS REPRO DUCED BELOW: - 1. THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECTED AGAINST THE ORDER OF CIT(A) DATED 16 TH SEPTEMBER, 2009 FOR A.Y. 2002-03. GROUNDS OF APPEAL READ AS UNDER: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 IMPOSED ON THE BASIS OF WRONG CLAIM OF DEDUCTION U/S 80IB OF THE INCOME TAX ACT, 1961. 4 ITA NO. 4465/DEL/2009 THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD DELETE OR AMEND THE GROUNDS OF APPEAL, BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE DEPARTMENT IN THE PRESENT APPEAL IS AGGRIEVE D BY THE ORDER OF CIT(A) VIDE WHICH PENALTY LEVIED ON AS SESSEE U/S 271(1)(C) AMOUNTING TO RS. 2,23,320/- HAS BEEN DELETED. THE PRESENT PENALTY WAS LEVIED IN RESPECT OF DENIAL OF CLAIM OF DEDUCTION U/S 80IB ON THE DUTY DRAWBACK AND DEPB COMPONENT OF INCOME. LD. CIT(A) HAS DELETED THIS P ENALTY FOLLOWING THE EARLIER DECISION OF ITAT ON THIS ISSU E WHICH ARE LISTED BELOW: - (I) M/S ORIENTAL RUG CO. VS. ACIT, PANIPAT, ITA NO. 3629 & 3630/D/08, ORDER DT. 02.04.09 A.Y. 01-02 & A.Y. 02-03. (II) M/S VIRENDER KUMAR JAIN VS. ACIT, PANIPAT, ITA NO. 3631/D/08, ORDER DT. 02.04.09, A.Y. 03-04. (III) SPARTAN TRENDS INC. VS. ACIT, PANIPAT ITA NO. 3677/D/08, ORDER DT. 02.04.09 A.Y. 02-03. (IV) M/S MAYUR OVERSEAS VS. ACIT, PANIPAT ITA NO. 3734/D/08, ORDER DT. 17.04.09, A.Y. 04-05. (V) RAJ OVERSEAS VS. ACIT, PANIPAT, ITA NO. 3735/D/ 08, ORDER DT. 17.4.09, A.Y. 03-04. (VI) M/S YATI OVERSEAS P. LTD. VS. ACIT, PANIPAT, I TA NO. 3736/D/08, ORDER DT. 17.4.09, AY 03-04. (VII) SHIV SHAKTI EXPORTS, ITA NO. 3813 & 3814/D/08 , ORDER DT. 20.05.09, AY 02-03 & 03-04. 3. REPRODUCING THE OBSERVATION OF ITAT IN THE CASE OF M/S ORIENTAL RUG CO. (SUPRA) LD. CIT(A) HAS OBSERVE D THAT JURISDICTIONAL ITAT HAS DECIDED THE ISSUE THAT WHER E THE CLAIM OF ASSESSEE IS REJECTED U/S 80IB ON DEPB AND DUTY DRAWBACK THEN NO PENALTY WAS TO BE LEVIED. IT IS I N THIS MANNER LD. CIT(A) HAS DELETED THE PENALTY. 4. AFTER NARRATING THE FACTS LD. DR RELIED ON THE P ENALTY ORDER AND IT WAS SUBMITTED THAT NOT ONLY HONBLE 5 ITA NO. 4465/DEL/2009 JURISDICTIONAL HIGH COURT BUT ALSO HONBLE SUPREME COURT HAS HELD THAT ASSESSEE CANNOT CLAIM DEDUCTION IN RE SPECT OF DUTY DRAWBACK AND DEPB. THUS, IT WAS PLEADED THAT THE CLAIM OF ASSESSEE WAS FALSE AND, THEREFORE, PENALTY WAS RIGHTLY LEVIED BY THE AO AND THE ORDER OF CIT(A) SH OULD BE SET ASIDE AND THAT OF AO SHOULD BE RESTORED. 5. ON THE OTHER HAND, LD. AR OF THE ASSESSEE HAS SUBMITTED BEFORE US A COPY OF ORDER OF HONBLE JURI SDICTIONAL HIGH COURT DT. 19.11.09 IN ITA NO. 410 TO 412/09 IN THE CASE OF CIT LUDHIANA VS. ARISUDANA SPINNING MILLS LTD., LUDHIANA (UNREPORTED DECISION) IN WHICH IN RESPECT OF A SIMI LAR CLAIM MADE BY THE ASSESSEE U/S 80IA IT WAS HELD THAT NO P ENALTY U/S 271(1)(C) WAS IMPOSABLE. WHILE HOLDING SO THEI R LORDSHIPS HAVE ALSO CONSIDERED THE DECISION OF JURI SDICTIONAL HIGH COURT IN THE CASE OF LIBERTY INDIA VS. CIT 293 ITR 520 AND ALSO DECISION OF HONBLE APEX COURT IN THE CASE OF LIBERTY INDIA VS. CIT 317 ITR 218. THEIR LORDSHIPS HAVE ALSO CONSIDERED THE DECISION OF HONBLE SUPREME COURT IN THE CAE OF UNION OF INDIA AND OTHERS VS. DHARMENDRA TEXTILE PROCESSORS AND OTHERS 306 ITR 277 AND AFTER CONSIDE RING THE SAME THEIR LORDSHIPS HAVE OBSERVED THAT THE ORD ER OF ITAT DELETING THE PENALTY CANNOT BE SAID TO BE PERV ERSED AS WHEN THE RETURNS WERE FILED THE ISSUE WITH REGARD T O ENTITLEMENT OF DEDUCTION WAS DEBATABLE. HE SUBMITT ED THAT THE SAID ORDER IS APPLICABLE TO THE PRESENT FACTS A LSO AND, THEREFORE, LD. CIT(A) HAS RIGHTLY DELETED THE PENAL TY. LD. AR ALSO RELIED UPON THE DECISIONS WHICH ARE CITED BY L D. CIT(A) IN HIS ORDER. A COPY OF THE ORDER OF HONBLE JURIS DICTIONAL HIGH COURT UPHOLDING THE ORDER OF ITAT REGARDING DE LETION OF PENALTY WAS ALSO GIVEN TO LD. DR. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO N IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE RETURN OF INCOME WAS FILED IN THE PRESENT CASE ON 31 ST OCTOBER, 2002, WHEREIN SUCH CLAIM WAS MADE. THE DECISION OF HONBLE JURIS DICTIONAL 6 ITA NO. 4465/DEL/2009 HIGH COURT ON THE ISSUE THAT WHETHER OR NOT ASSESSE E IS ENTITLED TO CLAIM DEDUCTION U/S 80IB ON DUTY DRAWBA CK AND DEPB IS DATED 27 TH SEPTEMBER, 2006 (LIBERTY INDIA VS. CIT 293 ITR 520) WHICH IS MUCH AFTER THE DATE OF FILING OF THE RETURN BY THE ASSESSEE. THEREFORE, IT CAN BE SAID THAT WHEN ASSESSEE PUT HIS CLAIM FOR DEDUCTION U/S 80IB ON DU TY DRAWBACK AND DEPB COMPONENTS THEN THE ISSUE WAS DEBATABLE AND, THEREFORE, THE AFOREMENTIONED DECISI ON OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. M/S ARISUDANA SPINNING MILLS LTD. (SUPRA) WILL BE APPLI CABLE AND IT IS TO BE HELD THAT IT IS NOT A FIT CASE WHERE LEVY OF CONCEALMENT PENALTY CAN BE HELD JUSTIFIED. FOR THE SAKE OF CONVENIENCE THE RELEVANT OBSERVATIONS OF HONBLE JURISDICTIONAL HIGH COURT FROM THE SAID DECISION AR E REPRODUCED BELOW: - THE AFORESAID FINDING OF FACT ARRIVED AT BY THE ITAT CANNOT BE SAID TO BE PERVERSE OR AGAINST THE MATERIAL AVAILABLE ON THE RECORD. WHEN THE RETURNS OF INCOME WERE FILED, THE ISSUE WITH REGARD TO ENTITLEMENT OF DEDUCTION U/S 80IA ON THE PROFITS DERIVED FROM TRADING TURNOVER I.E. TRADING IN THE RAW WOOL AND KNITTED CLOTH, WAS DEBATABLE AND THIS ISSUE WAS SETTLED WITH THE JUDGMENT OF THIS COURT IN M/S LIBERTY INDIA LTD. (SUPRA. THEREFORE, THE ITAT HAS RIGHTLY COME TO THE CONCLUSION THAT THE ASSESSEE DID NOT DELIBERATELY OR CONSCIOUSLY CONCEALED THE TRUE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE JUDGMENT CITED BY THE COUNSEL FOR THE APPELLANT IS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE PENALTY HAS BEEN DELETED ON THE BASIS OF AFORESAID FINDING OF FACT. 7 ITA NO. 4465/DEL/2009 IN VIEW OF THE AFORESAID FINDING OF FACT IN OUR OPINION NO SUBSTANTIAL QUESTION OF LAW IS ARISING OUT OF THE ORDER OF THE ITAT. HENCE, THESE APPEALS ARE DISMISSED. 7. IN VIEW OF ABOVE DISCUSSION, WE FIND NO INFIRMIT Y IN THE ORDER OF CIT(A), WHEN HE DELETED THE PENALTY VIDE I MPUGNED ORDER. WE DECLINE TO INTERFERE. 8. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. 6. IN THE AFOREMENTIONED ORDER ONE OF US (J.M.) IS A PARTY. FOLLOWING THE SAME, WE FIND NO MERIT IN DEPARTMENTAL APPEAL A ND THE SAME IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SD/- SD/- (A.K. GARODIA) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR