JINDAL DRUGS TD, MUMBAI V. ACIT CEN CIR 8, MUMBAI

ITA 5914/MUM/2010

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9158 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 19-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 27-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMANAND J DR
• Keywords: Additional evidence
• Section: 80HHC; 80IB

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.5914/MUM/2010 ASSESSMENT YEAR: 2004-05 M/S JINDAL DRUGS LIMITED, BHAKTAWAR, 6 TH FLOOR, B & C, 229, NARIMAN POINT, MUMBAI-400021 / VS. THE ACIT, CENTRAL CIRCLE-8, 8 TH FLOOR, OLD CGO BUILDING ANNEXE, M.K. ROAD, MUMBAI-400020 ( #$%& ' /ASSESSEE) ( / REVENUE) P.A. NO. AAACJ1000A #$%& ' / ASSESSEE BY): SHRI ASHOK MEHTA / REVENUE BY SHRI PARMANAND J. -DR ( # ) ' * / DATE OF HEARING : 25/03/2015 , ) ' * / DATE OF PRONOUNCEMENT : 25/03/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 12/05/2010 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE ONLY GROUND RAISED IN THE PRESENT APPEAL PERTAINS TO LEVYING/CONFIRMING THE PENALTY OF RS.45 ,636/- M/S JINDAL DRUGS LIMITED , 2 WITHOUT APPRECIATING THE GENUINE CLAIM OF DEDUCTION MADE U/S 80IB OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE A CT). 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI ASHOK MEHTA, CONTENDED THAT THE QUANTUM ADDITION HA S ALREADY BEEN DELETED BY THE TRIBUNAL, THEREFORE, TH E PENALTY WILL NOT SURVIVE. THE ASSESSEE PRODUCED THE PHOTOCO PY OF THE ORDER DATED 15/02/2013 (ITA NO.751 AND 2591/MUM/200 8). THE LD. DR, SHRI PARMANAND J. DEFENDED THE LEVY AS WELL AS CONFIRMATION OF THE PENALTY BUT DID NOT CONTROVERT THE FACTUAL MATRIX THAT QUANTUM ADDITION HAS BEEN DELETED BY TH E TRIBUNAL. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRI EF ARE THAT THE ASSESSEE IS ENGAGED IN TRADING AND MANUFACTURING OF DYES, MENTHOL BASED PRODUCT ETC, DECLARED INCOME OF RS.17 .8 CRORES AFTER CLAIMING DEDUCTION U/S 80HHC OF THE ACT AMOUN TING TO RS.2.91 CRORES AND DEDUCTION U/S 80IB OF THE ACT AM OUNTING TO RS.1,21,211/-. AGGRIEVED BY THE ORDER OF THE AS SESSING OFFICER, THE ASSESSEE PREFERRED THE APPEAL BEFORE T HE COMMISSIONER OF INCOME TAX (APPEALS), WHERE IT WAS PARTLY ALLOWED. FINALLY, THE MATTER TRAVELLED TO THE TRIB UNAL, WHEREIN, THE ASSESSING OFFICER WAS DIRECTED (PARA-35 OF THE ORDER OF THE TRIBUNAL) TO EXAMINE THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. THE LD. ASSESSING OFFICER, PURSUANT TO T HE DIRECTION OF THE TRIBUNAL, EXAMINED THE CLAIM OF THE ASSESSEE AND FINALLY ACCEPTED ITS CLAIM VIDE ORDER DATED 24/02/2014. TH E RELEVANT PORTION IS REPRODUCED HEREUNDER:- M/S JINDAL DRUGS LIMITED , 3 4. HON. ITAT HAS GIVEN CERTAIN FRAMEWORK AND SPECI FIC DIRECTIONS TO INVESTIGATE FURTHER AND AFTER APPLYIN G THE FACTS, FINDINGS AND THE LAW BEING WITHIN THE FOUR CORNERS OF THESE DIRECTIONS THE UNDERSIGNED IS OF THE OPINION THAT T HE ASSESSEE M/S JINDAL DRUGS LTD. HAD COMMENCED THE MANUFACTURING A CTIVITY BEFORE 31 ST MARCH, 2004 AND IS ELIGIBLE FOR ITS CLAIM OF DEDUC TION U/S 80IB AS EXPLAINED IN THE INCOME TAX ACT, 1961. 2.2. THERE IS NO DISPUTE THAT QUANTUM ADDITION HAS BEEN DELETED BY THE ASSESSING OFFICER BY ACCEPTING THE C LAIM OF THE ASSESSEE, PURSUANT TO THE DIRECTION OF THE TRIBUNAL , THEREFORE, WE ARE OF THE VIEW THAT THE BASIS ON WHICH THE PENA LTY WAS LEVIED, REMAINS NO MORE IN EXISTENCE, CONSEQUENTLY, PENALTY CANNOT SURVIVE. OUR VIEW FURTHER FINDS SUPPORT FRO M THE DECISION AND THE RATIO LAID DOWN IN CIT VS S.P VIZ CONSTRUCTION COMPANY 176 ITR 47 (PATNA) AND K.C. BUILDERS VS ACI T 265 ITR 562 (SUPREME COURT). WE ARE OF THE VIEW WHERE T HE PENALTY FOR CONCEALMENT OR FURNISHING INACCURATE PA RTICULARS WAS LEVIED AND AFTER DELETING THE QUANTUM ADDITION/ ACCEPTING THE CLAIM OF THE ASSESSEE, THERE REMAINS NO BASIS A T ALL FOR LEVYING THE PENALTY. ORDINARILY, PENALTY CANNOT ST AND IN ITSELF IF THE ADDITION MADE IN THE ASSESSMENT ITSELF IS SE T ASIDE OR CANCELLED BY THE SUPERIOR AUTHORITY/COURT OR BY THE ASSESSING OFFICER HIMSELF AS HAS BEEN DONE IN THE PRESENT APP EAL. THE PENALTY CANNOT STAND BY ITSELF BECAUSE FALSE RESULT MAY BE PRODUCED BY THE FALSITY OF ONE OR MORE OF THE CONST ITUENT ITEMS IN THE RETURN. THE WORD INACCURATE PARTICULARS W OULD COVER FALSITY IN THE FINAL FIGURE AND ALSO THE CONSTITUEN T ELEMENTS OR ITEMS. THEY SIMPLY WOULD MEAN INACCURATE IN SOME S PECIFIC OR DEFINITE RESPECT WHETHER IN THE CONSTITUENT OR SUBO RDINATE M/S JINDAL DRUGS LIMITED , 4 ITEMS OF INCOME OR THE END RESULT. CONCEALMENT OR FURNISHING INACCURATE PARTICULARS IMPLIES SOME DELIBERATE ACT ON THE PART OF THE ASSESSEE IN WITHHOLDING THE TRUE FACTS FROM THE AUTHORITIES. SINCE, THE BASIS OF LEVYING PENALTY R EMAINS NO MORE IN EXISTENCE, AFTER DELETION OF THE QUANTUM ADDITION/ACCEPTANCE BY THE ASSESSING OFFICER HIMSEL F, THEREFORE, FROM THIS ANGLE THE ASSERTION OF THE ASS ESSEE IS HAVING MERIT, THEREFORE, THE PENALTY SO IMPOSED U/S 271(1)(C) OF THE ACT IS DELETED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 25/03/2015. - ) , . #/ 25 /0 3 /2015 ) 4 SD/ - (D. KARUNAKARA RAO) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER ( MUMBAI; . # DATED : 25/03/2015 F{X~{T? P.S/. #.. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. 6789 / THE APPELLANT 2. :;89 / THE RESPONDENT. 3. ( <' ( 67 ) / THE CIT, MUMBAI. 4. ( <' / CIT(A)- , MUMBAI 5. >? :'#$ , 67* 6$ , ( / DR, ITAT, MUMBAI 6. % @ / GUARD FILE. / BY ORDER, ;>7' :' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI