Ashish Abrol, New Delhi V. ITO, New Delhi

ITA 6159/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3074 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 01-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Section: 143(3); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DLEHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO.6159/DEL/2016 ASSESSMENT YEAR: 2009-10 SHRI ASHISH ABROL VS INCOME-TAX OFFICER PROP. M/S JANEX, X-2, OKHLA INDL. AREA WARD 29(5), NEW DELHI. PH-II, NEW DELHI. (PAN: AAEPA6509L) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VINEET GARG, ADVOCA TE RESPONDENT BY: SHRI RAVI KANT GUPTA, SR. D R ORDER DATE OF HEARING: 22.03.2018 DATE OF PRONOUNCEMENT: 26 .03.2018 PER K.N. CHARY,JM CHALLENGING THE ORDER DATED 28.9.2016 IN APPEAL NO .152/2015-16 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 10, NEW DELHI (FOR SHORT LD. CIT(A)), ASSESSEE PREFERRED THIS APPEAL 2. ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WAS CO MPLETED BY WAY OF ORDER DATED 27.1.2016 AT RS.3,59,63,385/- AS AGAINST THE RETURNED LOSS OF RS.33,77,487/- 2 AFTER CLAIMING EXEMPTION U/S 10B OF THE ACT IN RESP ECT OF PROFITS OF RS.3,64,22,541/- BY DISALLOWING THE CLAIM FOR EXEMP TION U/S 10B OF THE ACT AND ALSO THE CLAIM FOR DEDUCTION OF RS.29,81,331/- TOWA RDS THE LIABILITY. WHEN THE MATTER WAS CARRIED IN APPEAL, LEARNED CIT(A) ALLOWE D THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10B OF THE ACT, WHO CONFIRMED THE DIS ALLOWANCE OF RS.29,18,331/-. WHILE DOING SO, LEARNED CIT(A) OBSERVED THAT THE AS SESSEE COMPANY, A 100% EOU ENTITLED TO 100% DEDUCTION U/S 10B OF THE ACT, AS S UCH, IT WILL NOT MAKE ANY DIFFERENCE WITH REGARD TO THE TAXATION OF THE 100% EOU UNIT. WHILE MAKING SUCH OBSERVATION, LEARNED CIT(A) DIRECTED THE LEARNED AO TO RECALCULATE THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 10B OF THE ACT IN THE LI GHT OF THE INCOME INCREASED BY THE AMOUNT OF THE DISALLOWANCE. 3. AFTER THE DISPOSAL OF THE SAID APPEAL, LEARNED A O TOOK COGNIZANCE OF THE OBSERVATIONS OF THE LEARNED CIT(A) IN ORDER DATED 2 6.8.2014. HOWEVER, HE INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT AND COMPLETED BY WAY OF ORDER DATED 27.1.2016 WITH A LEVY OF PENALTY OF RS.7,51,3 84/-. 4. APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY WAY OF IMPUGNED ORDER WITH THE OBSERVATION THAT THE ASSESSEE FAILED TO DI SCHARGE HIS ONUS TO ESTABLISH THE GENUINENESS AND VERACITY OF THE SUNDRY CREDITORS NOT ONLY DURING THE ASSESSMENT PROCEEDINGS BUT ALSO AT THE APPELLATE AN D PENALTY STAGE. HENCE, THE ASSESSEE IS IN THIS APPEAL BEFORE US. 5. IT IS THE ARGUMENT OF THE LEARNED AR THAT INASMU CH AS THE LEARNED CIT(A) GRANTED EXEMPTION U/S 10B OF THE ACT TO THE ASSESSE E WITH THE SPECIFIC OBSERVATION THAT THE ASSESSEE COMPANY, A 100% EOU IS ENTITLED TO 100% DEDUCTION U/S 10B OF THE ACT, AS SUCH IT WILL NOT M AKE ANY DIFFERENCE WITH REGARD 3 TO THE TAXATION OF THE 100% UNIT AND UPON SUCH OBSE RVATION DIRECTED THE LEARNED AO TO RE-CALCULATE THE EXEMPTION CLAIM OF THE ASSES SEE U/S 10B OF THE ACT IN THE LIGHT OF THE INCOME INCREASED BY THE AMOUNT OF THE D ISALLOWANCE. HE, THEREFORE, SUBMITS THAT THOUGH THE INCOME IS ENHANCED, AT THE SAME TIME, EXEMPTION IS ALSO ENHANCED RESULTING IN NO TAX LIABILITY TO THE ASSESS EE. WHEN THERE IS NO TAX LIABILITY TO THE ASSESSEE, NO QUESTION OF PENALTY AR ISES. 6. PER CONTRA, IT IS THE ARGUMENT OF THE LEARNED DR THAT THE ASSESSEE CONSCIOUSLY MADE AN INCORRECT CLAIM IN ORDER TO EVAD E THE TAX , AS SUCH, CLAIM WAS RIGHTLY DEALT BY THE AUTHORITIES BELOW BY LEVYING THE PENALTY, AS SUCH PENALTY CANNOT BE DELETED. 7. IN THIS MATTER, THERE IS NO DISPUTE AS TO THE LE ARNED CIT(A) GRANTING EXEMPTION TO THE ASSESSEE U/S 10B OF THE ACT AND HI S OBSERVATION AS TO THE ENTITLEMENT OF THE ASSESSEE TO CLAIM 100% DEDUCTION U/S 10B OF THE ACT. LEARNED CIT(A) OBSERVED THAT INASMUCH AS 100% DEDUCTION IS AVAILABLE TO THE ASSESSEE, ANY ENHANCEMENT IN THE INCOME DOES NOT RESULT IN ADDITI ONAL TAX LIABILITY TO THE ASSESSEE AND IN ANY CASE, THE ASSESSED INCOME WILL B E THE RETURNED INCOME. AS A MATTER OF FACT, IT IS NOT THE CASE OF THE REVENUE T HAT AFTER RECALCULATION OF THE EXEMPTION CLAIM OF THE ASSESSEE U/S 10B OF THE ACT IN THE LIGHT OF THE INCOME INCREASED BY THE AMOUNT OF THE DISALLOWANCE, ANY ADDI TIONAL TAX LIABILITY WAS INCURRED BY THE ASSESSEE. WHEN THE ASSESSED INCOME IS EQUIVALENT TO THE RETURNED INCOME, THE QUESTION OF PENALTY DOES NOT AR ISE. WITH THIS VIEW OF THE MATTER, WE ALLOW THE APPEAL OF THE ASSESSEE AND DIR ECTED THE LEARNED AO TO DELETE THE PENALTY. 4 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH, 2018. SD/- SD/- (G.D. AGARWAL) (K. NARASIMHA CHARY ) PRESIDENT JUDICIAL MEMBER DATED: 26 TH MARCH, 2018 VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) BY ORDER 5. DR, ITAT ASSTT. REGISTRA R, ITAT