M/S CHAMBAL FERTILIZERS & CHEMICALS LTD., Kota V. ACIT, Kota

ITA 527/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82875 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 31-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: M L PATODI; P J PARDIWALA SMT RITU DAS

Judgement Text

ITA NO. 556/JP/2012 M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. ACIT , CIRCLE- 2, KOTA 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 527/JP/2012 ASSESSMENT YEAR: 2003-04 PAN : AAACC 9762 A M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. THE ACIT GADEPAN, CIRCLE- 2 KOTA KOTA (APPELLANT) (RESPONDENT) ITA NO. 556/JP/2012 ASSESSMENT YEAR: 2003-04 PAN : AAACC 9762 A THE DCIT VS. M/S. CHAMBAL FERTILIZERS & CHEMICAL S LTD. CIRCLE- 2 GADEPAN, KOTA KOTA (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.J. PARDIWALA, SMT. RITU DAS AND SHRI M.L. PATODI DEPARTMENT BY: SHRI A.K. KHANDELWAL DATE OF HEARING: 28-10-2014 DATE OF PRONOUNCEMENT: 19-12-2014 ORDER PER R.P. TOLANI, JM THESE ARE THE CROSS APPEALS AGAINST THE ORDER OF T HE LD. CIT(A), KOTA DATED 30-03-2012 FOR THE ASSESSMENT YEAR 2003-04 IN RESPECT OF PENALTY PROCEEDINGS U/S 271(1) (C). ITA NO. 556/JP/2012 M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. ACIT , CIRCLE- 2, KOTA 2 2.0 THE ASSESSEE IN ITS APPEAL HAS RAISED THE FOLLO WING GROUND. 1. THAT HE ACIT, CIRCLE- 2, KOTA ERRED IN IMPOSIN G THE PENALTY U/S 271(1) (C ) OF THE I.T. ACT. THE LD . CIT(A), KOTA ERRED IN PARTIALLY MAINTAINING THE PENALTY OF RS. 3 ,62,466/- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. HENC E, THE PENALTY OF RS. 3,62,466/- IMPOSED U/S 271(1)( C) OF THE I.T. ACT SHOULD BE SET ASIDE. 3.0 THE REVENUE IN ITS APPEAL HAS RAISED THE FOLLOW ING GROUNDS. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE H AS ERRED IN:- (I) DELETING PENALTY OF RS. 8,65,29,719/- IMPOSED U /S 271(1) (C ) OF THE ACT ON THE ADDITION OF RS. 23,54 ,55,017/- ON ACCOUNT OF DOWNWARD IMPACT OF RETENTION PRICE SUBS IDY. (II) DELETING PENALTY OF RS. 15,23,33,187/- IMPOSED U/S 271(1) (C ) OF THE ACT ON THE ADDITION OF RS. 41,45 ,12,073/- ON ACCOUNT OF WRONG DEDUCTION U/S 80IA IN RESPECT OF CAPTIVE POWER PLANT. (III) DELETING PENALTY OF RS. 1,43,99,768/- IMPOSED U/S 271(1) (C ) OF THE ACT ON THE ADDITION OF RS. 3,91, 93,043/- ON ACCOUNT OF WRONG DEDUCTION U/S 80IA. 4.0 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT ALL THE ISSUES AS RAISED BY THE ASSESSEE AND REVENUE ARE COVERED BY ITAT, JA IPUR BENCH ORDER IN ASSESSEE'S OWN PENALTY APPEAL ORDER FOR AY 2002-03 DATED 24-09-2014 AND QUANTUM APPEAL FOR AY 2003-04 DATED 28-7-2011. 5.1 APROPOS ASSESSEE'S APPEAL, IT IS CONTENDED BY T HE LD. COUNSEL SHRI P J PARDIWALA SR. ADV. THAT THE PENALTY WAS IMPOSED IN RESPECT OF A BONAFIDE ITA NO. 556/JP/2012 M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. ACIT , CIRCLE- 2, KOTA 3 MISTAKE DISCLOSING THE NET RECEIPTS WITHOUT INCLUDI NG TDS IN RESPECT OF MOROCCO JOINT VENTURE COMPANY. THIS BENCH OF ITAT V IDE ITS ORDER DATED 24-09-2014 IN ASSESSEE'S OWN CASE FOR THE ASSESSMEN T YEAR 2002-03 HAS DELETED THE PENALTY ON THE SAME ISSUE BY FOLLOWING OBSERVATIONS. 19. APROPOS ADDITION ON ACCOUNT OF IMACID DEPOSI T, WE FIND THAT THE ASSESSEE HAD GIVEN PROPER EXPLANAT ION IN THIS BEHALF, WHICH HAS BEEN OVERLOOKED BY LD. CIT(A). TH E MISTAKE IS BONAFIDE, THE ENTRIES WERE MADE AS PER REGULAR ACC OUNTING POLICY IN THIS BEHALF. BESIDES ALL THE RELEVANT PAR TICULARS FOR THIS ACCOUNTING OF IMACD HAVING BEEN FILED ALONG WITH RE TURN OF INCOME, THE JUDGMENT OF HON'BLE SUPREME COURT IN T HE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) IS SQUARELY APPLICABLE TO THIS ISSUE. IN VIEW THEREOF, WE DELET E THE PENALTY RETAINED BY THE LD. CIT(A). 5.2 THE LD. DR IS HEARD ON THIS ISSUE. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FACTS AND CIRCUMSTANCES OF THIS ISSUE ARE SAME WITH THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 200 2-03, FOLLOWING THE SAME AND THE DECISION OF HON'BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. 322 ITR 158, WE DELETE THE P ENALTY ALLOWING THE SOLITARY GROUND RAISED BY THE ASSESSEE. 6.1 APROPOS GROUND NO. 1 OF THE REVENUE QUA PENALTY IN RESPECT OF DOWNWARD IMPACT OF RETENTION PRICE SUBSIDY. THE LD . DR IS HEARD. ITA NO. 556/JP/2012 M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. ACIT , CIRCLE- 2, KOTA 4 6.2 THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT TH E QUANTUM ADDITION HAS BEEN DELETED BY THIS BENCH OF ITAT FOR THE ASSESSME NT YEAR 2003-04 VIDE ITS ORDER DATED 28-07-2011, WHICH HAS BEEN FOLLOWED BY LD. CIT(A) VIDE ORDER DATED 30-03-2012. CONSEQUENTLY THE PENALTY AS RAISE D BY THE REVENUE IN GROUND NO. 1 IS LIABLE TO BE DISMISSED. 7.1 THE GROUND NO. (II) OF THE REVENUE QUA PENALTY ON ACCOUNT OF WRONG DEDUCTION U/S 80IA IN RESPECT OF CAPTIVE POWER PL ANT. THE LD. DR IS HEARD. 7.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT QUANTUM ADDITION IN THIS BEHALF HAS BEEN DELETED BY ITAT VIDE ITS ORDER DATED 28-07-2011 IN ASSESSEE'S OWN CASE BY FOLLOWING OBSERVATIONS. 22.9 CONSIDERING THE ABOVE DISCUSSIONS, WE REJECT THE CONTENTIONS OF THE REVENUE THAT THE DEDUCTION U/S 8 0IA IS NOT AVAILABLE IN RESPECT OF CAPTIVE POWER PLANT FOR TH E ASSESSMENT YEAR 2004-05 ON THE GROUND THAT IT IS THE 11 TH YEAR OF THE COMMERCIAL PRODUCTION. AS PER SECTION 80IA (2), IT IS TO BE CONSIDERED THAT THE ASSESSEE HAS EXERCISED THE OPT ION FOR THE FIRST TIME FOR THE ASSESSMENT YEAR 1999-2000 AND HE NCE DEDUCTION 80IA WILL BE AVAILABLE FOR 10 CONSECUTIVE ASSESSMENT YEARS OUT OF 15 CONSECUTIVE ASSESSMENT YEARS STARTI NG FROM THE INITIAL ASSESSMENT YEAR. 7.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. SINCE THE QUANTUM ADDITION HAS BEEN DELETED BY THIS ITA NO. 556/JP/2012 M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. ACIT , CIRCLE- 2, KOTA 5 BENCH OF ITAT, THEREFORE, PENALTY IMPOSED IN THIS B EHALF APROPOS CLAIM OF DEDUCTION U/S 80IA ON CAPTIVE POWER PLANT IS DELETE D. 8.1 APROPOS GROUND NO. (III) OF THE REVENUE IS ALSO IN RESPECT OF DEDUCTION OF MISCELLANEOUS INCOME U/S 80IA. THE LD . DR IS HEARD. 8.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT IN THE ORDER OF THE LD. CIT(A) THE CLAIM OF DEDUCTION U/S 80IA WAS FOUND TH AT ITAT OUT MISCELLANEOUS INCOME TO THE EXTENT OF RS. 3,94,45,9 23/- WAS RETAINED. WHILE DEALING WITH THE ISSUE OF PENALTY THESE ADDITIONS W ERE NOT ADJUDICATED IN THE APPEAL. BEFORE LD. CIT(A), IT WAS PLEADED THAT NO I NACCURATE PARTICULARS OF INCOME WERE FURNISHED IN THE RETURN OF INCOME. ALL THE DETAILS REGARDING CLAIM U/S 80IA WERE PRODUCED BEFORE THE LOWER AUTHO RITIES AND THE ISSUE EMANATED FROM ITS RETURN ONLY. THE ISSUE OF ELIGIBI LITY OF MISCELLANEOUS INCOME WHILE COMPUTING DEDUCTION U/S 80IA WAS VEXED ONE AND AFTER A PROLONGED LITIGATION WAS SETTLED BY THE HON'BLE APE X COURT. THE LD. CIT(A), IN VIEW THEREOF DELETED THE PENALTY BY FOLLOWING OB SERVATIONS THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (322 ITR 158) HAS H ELD THAT MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTION OF IN TEREST WHICH HAS NOT BEEN ACCEPTED BY THE REVENUE PENALTY U/S 271(1) IS NOT ATTRACTED, MERE MAKING A CLAIM WHICH IS NO T ITA NO. 556/JP/2012 M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. ACIT , CIRCLE- 2, KOTA 6 SUSTAINABLE IN LAW, WILL NOT AMOUNT TO FURNISHING I NACCURATE PARTICULARS SINCE ALL THE PARTICULARS WERE FURNISHED IN THE RET URN OF INCOME AND IN RESPECT OF THIS ADDITION, DECISION OF HON'BLE APEX COURT I N THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) IS SQUARELY APPLICAB LE, THUS THE PENALTY IS NOT LEVIABLE. 8.3 THE LD. DR CONTENDS THAT THE ASSESSEE HAD NOT D ISPUTED THESE ADDITIONS WHICH AMOUNT TO ADMISSION OF ADDITION. THE HON'BLE APEX COURT IN THE CASE OF MAK DATA (P) LTD. VS. CIT 358 ITR 593 HAS HELD T HAT ONCE THE AMOUNT IS ADMITTED BY THE ASSESSEE THEN THERE IS NO FURTHER O NUS ON THE AO TO ESTABLISH THE FACTUMS OF CONSCIOUS CONCEALMENT. 8.4 THE LD. COUNSEL FOR THE ASSESSEE IN REPLY CONTE NDS THAT THE CASE OF MAX DATA IS SOLELY BASED ON THE FACT OF ADMISSION O F THE ADDITION BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S. IN CONTRA DISTINCTION IN THIS CASE THE ADDITIONS WERE DISPUTED IN VIEW OF THE PROLONGED LEGAL DEBATE THEREON AND REJECTING THE ASSESSEE'S EXPLANATION, T HE DISALLOWANCES WERE MADE. THE ASSESSEE DID NOT APPEAL AGAINST IT WHICH DOES NOT TANTAMOUNT TO ADMISSION OF THE AMOUNTS. THEREFORE, THE CASE OF MA K DATA (P) LTD. VS. CIT (SUPRA) IS NOT APPLICABLE TO THE ASSESSEE'S CASE. ITA NO. 556/JP/2012 M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. ACIT , CIRCLE- 2, KOTA 7 8.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. APROPOS THE ISSUES OF GROUND N O. (I) AND (II) IN RESPECT OF DOWNWARD IMPACT OF RETENTION OF PRICE SUBSIDY A ND 80IA IN RESPECT OF CAPTIVE POWER PLANT, THE QUANTUM ADDITIONS HAVE BEE N DELETED BY THIS BENCH OF ITAT FOR THE ASSESSMENT YEAR 2003-04. SINC E QUANTUM ADDITIONS WERE DELETED, WE SEE NO REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A). THUS GROUND NO. (I) AND (II) OF THE REVENUE ARE DIS MISSED. 9.1 APROPOS GROUND NO. (III) OF THE REVENUE, WE FIND ME RIT IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE. TH E MAX DATA JUDGMENT AS PLEADED BY THE LD. DR IS APPLICABLE TO THE VOLUNTAR Y ADMISSION OF AN INCOME BY THE ASSESSEE BEFORE THE AO. THE FACTS IN THIS CA SE ARE DISTINGUISHABLE INASMUCH AS THE ASSESSEE CONTESTED 80IA CALCULATION BEFORE THE AO. IN VIEW OF THE VEXED LEGAL HISTORY, THE AO REJECTED ASSESSE E'S EXPLANATION AND MADE ADDITION WHICH WAS NOT CHALLENGED BY THE ASSESSEE I N APPEAL FOR ANY REASON. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, THE A SSESSEE'S NON-APPEALING OF THE ISSUE DOES NOT TANTAMOUNT TO ADMISSION OF ADDIT ION IN TERMS OF MAK DATA (P) LTD. VS. CIT (SUPRA) JUDGMENT. SINCE ALL THE MA TERIAL PARTICULARS WERE FILED BY THE ASSESSEE ALONG WITH RETURN OF INCOME A ND THEY WERE PART OF THE RETURN. THE RATIO OF RELIANCE PETRO PRODUCTS (P) LT D. (SUPRA) (SC) IS SQUARELY APPLICABLE TO ASSESSEE'S CASE. WE HAVE RELIED ON TH IS JUDGMENT FOR DELETION OF ITA NO. 556/JP/2012 M/S. CHAMBAL FERTILIZERS & CHEMICALS LTD. VS. ACIT , CIRCLE- 2, KOTA 8 PENALTIES IN RESPECT OF IMACID AND CAPTIVE POWER PL ANT. IN VIEW THEREOF, GROUND NO. (III) OF THE REVENUE IN RESPECT OF MISC ELLANEOUS INCOME U/S 80IA CLAIM IS DISMISSED. 10.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED AND THAT OF THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19-12 -2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 19 TH DEC. 2014 *MISHRA COPY FORWARDED TO:- 1. M/S. CHAMBAL FERTILISERS & CHEMICALS LTD. KOTA 2. THE ACIT, CIRCLE- 2 / THE DCIT, CIRCLE- 2, KOTA 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 527JP/2012) AR ITAT, JAIPUR