The ITO, Ward-1(1)(1), Ahmedabad V. Aakash Deep Farms Pvt. Ltd., Ahmedabad

ITA 561/AHD/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9884 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJAN KUMAR SINGH
• Section: 271(1)(c); 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.561/AHD/2017 WITH CO NO.72/AHD/2017 / ASSTT. YEAR: 2009-10 ITO, WARD - 1(1)(1) AHMEDABAD. VS. AAKASH DEEP FARMS P.LTD. 2 ND FLOOR, SARTHIK ANNEX NR. FUN REPUBLIC SATELLITE, AHMEDABAD 380 015. PAN : AANCA 6683 M. ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI RANJAN KUMAR SINGH, SR.DR ASSESSEE BY : SHRI DHIREN SHAH, AR / DATE OF HEARING : 06/12/2018 / DATE OF PRONOUNCEMENT: 10/12/2018 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF LD.CIT(A)-3, AHMEDABAD DATED 27.12.2016 PASSED FOR THE ASSTT.YEA R 2009-10, BY WHICH THE LD.CIT(A) HAS DELETED PENALTY OF RS.26,39,116/- IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT, 1961. ON RECEIPT OF NOTICE ON REVENUES APPEAL, ASSESSEE HAS ALSO FILED CROSS OBJECTION BEARING NO.72/AHD/2017. 2. FOR ADJUDICATING THE ISSUE ON HAND, WE BRIEFLY T AKE NOTE OF FACTS EMERGING FROM THE ORDERS OF THE REVENUE AUTHORITIES . THE ASSESSEE HAS FILED ITA NO.561/AHD/2017 WITH CO 2 RETURN OF INCOME ON 30.9.2009 DECLARING TOTAL INCOM E AT RS.1,10,350/-. THE CASE OF THE ASSESSEE SELECTED FOR SCRUTINY ASSESSME NT AND THE ASSESSMENT WAS FINALIZED UNDER SECTION 143(3) DETERMINING TOTAL IN COME AT RS.3,90,65,893/- AFTER MAKING FOLLOWING ADDITIONS: I) ADDITION ON ACCOUNT OF STCG OF RS. 8,05,292/- II) ADDITION ON ACCOUNT OF LTCG OF RS.3,03,33,731/- III) DISALLOWANCE OF FUTURE & OPTION LOSS RS. 77,64,38 7/- IV) DISALLOWANCE OF ADMINISTRATIVE EXP. RS. 50,2 47/- 3. IN APPEAL BEFORE THE LD.CIT(A), THE LD.FIRST APP ELLATE AUTHORITY HAS DELETED TWO ADDITIONS VIZ. STCG OF RS.8,05,292/- AN D LTCG OF RS.3,03,33,731/- AND CONFIRMED REST OF DISALLOWANCE . BOTH THE REVENUE AND ASSESSEE WENT IN APPEAL BEFORE THE ITAT AGAINST RES PECTIVE DELETION/CONFIRMATION OF ADDITION MADE BY THE LD.CI T(A). IN THE MEANWHILE, QUA CONFIRMATION OF ADDITION ON ACCOUNT OF FUTURE AND OPTION LOSS OF RS.77,64,387/- THE LD.AO INITIATED PENALTY UNDER SE CTION 271(1)(C) OF THE ACT, WHICH RESULTED IN IMPOSITION OF PENALTY OF RS.26,39 ,116/-. ASSESSEE CHALLENGED IMPOSITION OF PENALTY BEFORE THE LD.CIT( A). THE LD.CIT(A) WHILE DELETING THE PENALTY HAS RECORDED THAT PENALTY IMPO SED IN RELATION TO ADDITION ACCOUNT OF STCG AND LTCG HAVE BEEN DELETED AND DISA LLOWANCE OF FUTURE AND OPTION LOSS OF RS.77,64,387/- HAS BEEN SET ASID E BY THE TRIBUNAL TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION. THERE FORE, THE LD.CIT(A) HELD THAT SINCE NO ADDITION WAS SUBSISTING, PENALTY COUL D NOT BE SUSTAINED. HE ACCORDINGLY DELETED THE IMPUGNED PENALTY, WHICH IS NOW IN CHALLENGE BY THE REVENUE BEFORE THE TRIBUNAL BY WAY OF PRESENT APPEA L. 4. BEFORE US, THE LD.DR SUPPORTED THE ORDER OF THE LD.AO, WHILE THE LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT AGAINST QUANTUM ADDITION ITA NO.561/AHD/2017 WITH CO 3 DELETED/CONFIRMED BY THE LD.CIT(A), BOTH THE REVENU E AND ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL, AND THE TRIBUNAL ITA NO .2138/AHD/2012 DISMISSED THE REVENUES APPEAL AND CONFIRMED THE OR DER OF THE LD.CIT(A) IN RESPECT OF ADDITION OF STCG OF RS.8,05,292/- AND TH E ADDITION ON ACCOUNT OF LTCG OF RS.3,03,33,731/-, WHILE IN THE APPEAL OF TH E ASSESSEE IN ITA NO.2564/AHD/2012 THE TRIBUNAL HAS SET ASIDE THE ISS UE OF ADDITION IN RESPECT OF FUTURE AND OPTION LOSS OF RS.77,64,387/- TO THE FILE OF AO FOR FRESH ADJUDICATION. HE PLACED ON RECORD COPY OF ORDER OF THE TRIBUNAL DATED 11.8.2016 PASSED IN THE APPEALS CITED SUPRA. HE, TH EREFORE SUBMITTED THAT NO ADDITION IS EXISTING AS OF NOW FOR VISITING THE ASS ESSEE WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND THE IMPUGNED PENAL TY IS LIABLE TO BE CANCELLED. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. WE FIND THAT S UB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN , BUT WHI CH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSE E. PENALTY IN THE PRESENT CASE WAS IMPOSED QUA DISALLOWANCE IN RESPECT OF FUTURE AND OPTION LOSS OF RS.77,64,387/-. THIS ISSUE HAS BEEN SET ASIDE BY THE TRIBUNAL IN THE APPEAL OF THE ASSESSEE IN ITA NO.25 64/AHD/2012 VIDE ORDER DATED 11.8.2016 TO THE FILE OF THE LD.AO FOR FRESH ADJUDICATION. T HEREFORE, SINCE SET ASIDE PROCEEDINGS QUA ADDITION ON WHICH IMPUGNED ITA NO.561/AHD/2017 WITH CO 4 PENALTY HAS BEEN IMPOSED, IS PENDING BEFORE THE ASS ESSING OFFICER, PENALTY AT THIS STAGE IS NOT SUSTAINABLE. THE LD.CIT(A) HAS C ONSIDERED THE ISSUE AFTER TAKING INTO CONSIDERATION THE ORDER OF THE TRIBUNAL DATED 11.8.2016 AND CANCELLED THE PENALTY. WE UPHOLD HIS ORDER AND DIS MISS THE APPEAL OF THE REVENUE. 6. SO FAR CO OF THE ASSESSEE IS CONCERNED, THE SAME IS MERELY IN SUPPORT OF THE ORDER OF THE LD.CIT(A), AND DOES NOT ADDRESS AN Y GRIEVANCE AGAINST ANY PART OF THAT ORDER. THE SAME IS, THEREFORE INFRUCTOUS , AND THUS STANDS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE AND CO OF T HE ASSESSEE, BOTH ARE DISMISSED ORDER PRONOUNCED IN THE COURT ON 10 TH DECEMBER, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER