The DyCIT., Ahmedabad Circle-1, Ahmedabad V. Arvind Fashion Ltd., Ahmedabad

ITA 591/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8634 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-03-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 07-02-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: P M MEHTA
• Keywords: Opportunity of being heard; Set aside
• Section: 80IB; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND N. S. SAINI, AM) ITA NO. 591/AHD/2007 A. Y.: 2001-02 THE D. C. I. T., CIRCLE-1, 3 RD FLOOR, JITENDRA CHAMBERS, R. B. I. LANE, ASHRAM ROAD, AHMEDABAD VS ARVIND FASHIONS LTD., ARVIND MILLS PREMISES, NARODA ROAD, AHMEDABAD PA NO. AABCA 2402L (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI P.M. MEHTA, AR DEPARTMENT BY SHRI C. K. MISHRA, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE CIT(A)-V, AHMEDABAD DATED 14-1 1-2006 FOR ASSESSMENT YEAR 2001-02 CANCELING THE PENALTY U/S 2 71(1) ( C ) OF THE INCOME TAX ACT. 2. THE AO IN THE PENALTY ORDER U/S 271 (1) ( C ) OF THE IT ACT NOTED THAT THE ORDER U/S 1443(3) OF THE IT ACT WAS PASSED ON 30-03-2004 DISALLOWING ONE FOURTH AMOUNT OF ROYALTY, DISALLOWI NG EXCESS CLAIM U/S 80 I AND 80 HHC OF THE IT ACT. PENALTY PROCEEDINGS WERE ACCORDINGLY INITIATED. THE AO ALSO NOTED THAT THE LEARNED CIT(A ) CONFIRMED PART OF THE DISALLOWANCES. THE AO FURTHER NOTED THAT THE ASSESS EE HAD CLAIMED EXCESSIVE DEDUCTION U/S 80 IB AND 80 HHC OF THE IT ACT AND EXCESSIVE CLAIM WAS MADE BY MISINTERPRETING THE PROVISIONS OF LAW. VIDE SEPARATE ORDER, PENALTY WAS ACCORDINGLY IMPOSED ON THE EXCES SIVE DEDUCTION CLAIMED U/S 80 IB AND 80 HHC OF THE IT ACT. IT WAS BRIEFLY SUBMITTED BEFORE THE LEARNED CIT(A) THAT ASSESSEE MADE CLAIM U/S 80 IB AND 80 HHC ON THE BASIS OF DIFFERENT ORDERS OF THE TRIBUNA L AND SINCE THE IS SUE IS ITA NO.591/AHD/2007 ARVIND FASHIONS LTD. 2 DEBATABLE IT IS NOT A FIT CASE FOR IMPOSITION OF PE NALTY. THE LEARNED CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE AND CANCELL ED THE PENALTY. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUT SET SUBMITTED THAT QUANTUM CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE IN ITA NOS. 1037/AHD/2005 AND 1304/AHD/2005 RESPECTIVELY HAVE B EEN DECIDED BY THE TRIBUNAL VIDE ORDER DATED 18-12-2009. THE SUBJE CT MATTER OF DISPUTE BEFORE THE TRIBUNAL PERTAINS TO THE QUESTION AS TO WHETHER DEDUCTION U/S 80IB AND 80 HHC WERE ADMISSIBLE AGAINST SEVERAL ITE MS OF INCOME. HE HAS FILED COPY OF THE ABOVE ORDER ON RECORD AND ALS O SUBMITTED THAT THE TRIBUNAL WHILE CONSIDERING THE DEDUCTION U/S 80 IB OF THE ACT NOTED THAT SOME OF THE ITEMS ARE NOT ELIGIBLE FOR DEDUCTION AN D SOME ARE ELIGIBLE. SIMILARLY, ON THE DEDUCTION U/S 80 HHC OF THE IT AC T, THE ISSUES HAVE BEEN RESTORED BACK TO THE FILE OF THE AO FOR CONSID ERATION AND THE SAME IS THE POSITION WITH REGARD TO DEDUCTION U/S 80 IB OF THE IT ACT. THE LEARNED DR IN VIEW OF THE ABOVE SUBMITTED THAT SINCE THE MA TTER IS NOW DECIDED BY THE TRIBUNAL AND MAJOR ISSUES HAVE BEEN RESTORED TO THE FILE OF THE AO, THEREFORE, IT WOULD NOT BE APPROPRIATE TO RESTORE T HE PENALTY APPEAL ALSO TO THE FILE OF THE AO FOR RE-CONSIDERATION AS PER F INDINGS GIVEN BY THE TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE ORDER OF THE TRIBUNAL DATED 18-12-2009. AT THE STAG E OF PASSING THE PENALTY ORDER BY THE AO, THE AO HAD TAKEN INTO CONS IDERATION THE FINDING GIVEN BY THE LEARNED CIT(A) ON QUANTUM IN RESPECT O F EXCESSIVE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80 IB AND 80 HHC OF TH E IT ACT. NOW THE TRIBUNAL HAS DECIDED BOTH THE ISSUE AND SOME OF THE ISSUES HAVE BEEN RESTORED TO THE FILE OF THE AO. THE ASSESSEE ALSO I NFORMED THAT SINCE SOME OF THE ISSUES WERE DEBATABLE AND THE ASSESSEE CLAIM ED DEDUCTION ON THE BASIS OF VARIOUS ORDERS OF THE TRIBUNAL. THEREFORE, IT WOULD BE APPROPRIATE AND RELEVANT TO RESTORE THE PENALTY APPEAL ALSO TO THE FILE OF THE AO FOR RE- ITA NO.591/AHD/2007 ARVIND FASHIONS LTD. 3 CONSIDERATION IN VIEW OF THE FINDINGS NOW GIVEN BY THE TRIBUNAL. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE PENALTY MATTER TO THE FILE OF THE AO WITH DIRECTION TO RE-DECIDE THE PENALTY MATTER AFTER DECIDING QUANTUM ISSUE AS IS DIRECTED BY THE TRIBUNAL VIDE ORDER DATED 18-12-2009. THE AO SHALL GIVE SUFFICIEN T REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS O PEN TO THE ASSESSEE TO RAISE PLEA BEFORE THE AO IN SUPPORT OF ITS CONTENTI ON THAT THE ISSUE WAS DEBATABLE AND DEDUCTION WAS CLAIMED AS PER THE EARL IER ORDERS OF THE TRIBUNAL. 5. WITH THIS OBSERVATION, WE ALLOW THE APPEAL OF TH E REVENUE FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12-03-2010 SD/- SD/- (N. S. SAINI) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 12-03-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD