ACIT CIR 4(2), MUMBAI V. JBF INDUSTRIES LTD, MUMBAI

ITA 6043/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88337 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Department
• Bench Allotted: J
• Next Hearing Date: 12-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 30-08-2011
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: DR K SHIVARAM; RABHUL R SARDA
• Keywords: Depreciation
• Section: 143(3); 115JB; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.6043/M/2011 ( / ASSESSMENT YEAR: 2005 - 2006 ) ACIT - CIRCLE 4(2), R.NO.642, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. / VS. JBF INDUSTRIES LTD., JBF HOUSE OLD POST OFFICE LANE, KALBADEVI ROAD, MUMBAI 400 002. ./ PAN : AAACJ2575J ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARI GOVIND SINGH, DR / RESPONDENT BY : DR. K. SHIVARAM AND RABHUL R SARDA / DATE OF HEARING : 12.2.2015 / DATE OF PRONOUNCEMENT : 20 .2.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 30.08.2011 IS AGAINST THE ORDER OF THE CIT (A) - 8, MUMBAI DATED 7.6.2011 FOR THE ASSESSMENT YEAR 20056 - 06. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN CANCELLING THE PENALTY OF RS. 93,80,870/ - LEVIED U/S 271(1)(C) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER OF THE CIT (A) IS CONTRARY TO LAW TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 47,59,14,661/ - U/S 115JB OF THE ACT. ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF RS. 2,70,44,861/ - . IN THE ASSESSMENT, ASSESSING OFFICER MADE VARIOUS ADDITIONS AN D THEY INCLUDE (I) 33,02,458/ - ON ACCOUNT OF DEPRECIATION ON LEASED INCOME; (II) RS. 1,9 4,44,448/ - ON ACCOUNT OF DISALLOWANCE OF LEASE RENT; (III) RS. 8,52,500/ - ON 2 ACCOUNT OF DEPRECIATION ON ELECTRICAL FITTINGS AND (IV) RS. 19,00,000/ - U/S 40A(2)(B) OF THE ACT. EVENTUALLY, THE ASSESSED INCOME WAS COMPUTED UNDER SECTION 115JB OF THE ACT. TH US, ASSESSING OFFICER AFTER SATISFYING HIMSELF THAT THE ASSESSEE CONCEALED ITS INCOME / FURNISHED INACCURATE PARTICULARS WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT, INITIATED THE PENALTY PROCEEDINGS UNDER THE SAID SECTION AND ISSUED THE ORDER U/S 2 71(1)(C) OF THE ACT ON 29.3.2010. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, CIT (A) ALLOWE D THE ASSESSEES APPEAL. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. BEFORE US, LD DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. ON THE OTHER HAND, LD COUNSEL F OR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. FURTHER, LD COUNSEL BROUGHT OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S. VASANT INVESTMENT CORPORATION L TD VIDE ITA NO.1146/M/2012 (AY 2006 - 2007), DATED 5.6.2013 AND MENTIONED THAT THE SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL AND THE SAME WAS DECIDED IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE PENALTY PROVISIONS DO NOT ATTRACT WHEN THE ASSESSMENT WAS MADE ON INCOME COMPUTED UNDER SECTION 115JB AND THE TAX HAD BEEN PAID ON INCOME SO COMPUTED. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED ORD ER OF THE TRIBUNAL IN THE CASE OF M/S. VASANT INVESTMENTS COR PORATION LTD. ON PERUSAL OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) DATED 5.6.2013, WHEREIN ONE OF US (AM) IS A PARTY TO THE SAID TRIBUNALS ORDER, WE FIND PARA 8 IS RELEVANT IN THIS REGARD. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARA 8 OF T HE TRIBUNALS ORDER DATED 5.6.2013 IS EXTRACTED AS UNDER: 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AND THE MATERIAL PLACED BEFORE US. WE HAVE ALSO EXAMINED THE CITED DECISIONS BY THE LD COUNSEL. UNDISPUTEDLY, THE AO MADE THE ASSESSMENT UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT AND NOT UNDER THE NORMAL PROVISIONS. REGARDING THE NATURE OF ADDITIONS, IT IS A FACT THAT THE ASSESSEE MADE CERTAIN CLAIMS IN THE RETURN, BEFORE REVISING THE THEM BY WAY OF FILING REVISE D COMPUTATION OF INCOME, WHICH ARE PRIMA FACIE NOT ALLOWABLE AS PER THE PROVISIONS OF THE ACT. OF COURSE, THE ASSESSEE WITHDREW THE SAID CLAIMS AFTER THEY ARE POINTED OUT TO THE ASSESSEE. ALL THESE ISSUES BECOME IRRELEVANT IN VIEW OF THE HONBLE SUPREME CO URT JUDGMENT IN THE CASE OF CIT VS. NALWA SONS INVESTMENT LTD (SUPRA). IT IS A SETTLED AT THE LEVEL OF THE APEX COURT THAT PENALTY WAS NOT ATTRACTED IN RESPECT OF THE ADDITIONS MADE IN THE ASSESSMENT BY 3 THE AO UNDER MAT PROVISIONS. THE LEGAL PROPOSITIONS M ENTIONED IN PARA 5 ABOVE APPLY HERE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THIS IS NOT A FIT CASE FOR INVOKING THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT (A) AND THE SAME DOES NOT CA LL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. CONSIDERING T HE SETTLED NATURE OF THE ISSUE BY THE ORDERS OF THE TRIBUNAL AS WELL AS THE JUDGMENTS OF THE HIGHER JUDICIARY, WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE TO LEVY PENALTY U/S 271(1)(C) OF THE ACT. THE ADDITIONS MADE UNDER MAT PROVISIONS DO NOT ATTRACT CONCEALMENT PENALTY. THEREFORE, THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE. THUS, W E FIND NO INFIRMITY IN THE ORDER OF CIT (A) AND THE SAME DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. I N THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOU NCED IN THE OPEN COURT ON 2 0 T H FEBRUARY, 2015. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 2 0 .2.2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. DR ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI