DCIT 8(3), MUMBAI V. SULPHUR MILLS LTD, MUMBAI

ITA 6434/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92389 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Department
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 31-10-2013
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: K S CHOKSHI
• Keywords: Question of law
• Section: 10B; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ./ ITA NO S . 6 433 & 6434 / MUM/20 13 ( / ASSESSMENT YEAR S : 200 7 - 0 8 & 2008 - 09 ) DCIT - 8(3), MUMBAI VS. M/S SULPHUR MILLS LIMITED, 604/605, 349, BUSINESS PONT, 6 TH FLOOR, WESTERN EXPRESS HIGHWAY, ANDHERI (EAST), MUMBAI - 400069 ./ ./ PAN /GIR NO. : A ABCS 8736 K ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI NEIL PHILIP /ASSESSEE BY : SHRI K.S.CHOKSHI / DATE OF HEARING : 23 /0 3 /2015 / DATE O F PRONOUNCEMENT 17/04 /2015 / O R D E R PER R.C.SHARMA (A.M) : BOTH T HESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR S 200 7 - 08 & 2008 - 09 IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) 2. COMMON GROUNDS TAKEN IN BOTH THE APPEALS RELATES TO DELETION OF PENALTY LEVIED U/S.271(1)(C) OF THE ACT OF RS.14,39,230/ - FOR ASSESSMENT YEAR 2007 - 08 AND RS.29,36,705/ - FOR ASSESSMENT YEAR 2008 - 09 , THEREFORE, BOTH THE APPEALS ARE HEARD TOGETHER AND ARE NOW DISPO SED OFF BY THIS CONSOLIDATED ORDER. ITA NO S . 6433& 6434 / 13 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT T HE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SULPHUR PRODUCTS AND AGRO CHEMICALS. IN THE ASSESSMENT ORDER, THE AO RE DUCED THE CLAM OF THE ASSESSEE FOR DEDUCTION U/S.10B FOR THE A.Y.2007 - 08 FROM RS.4,02,40,839/ - TO RS.3,1946,548/ - AND FOR A.Y.2008 - 09 FROM RS.7,47,18,492/ - TO RS.6,81,93,074/ - . IN APPEAL, THE CIT(A) CONFIRMED THE ACTION OF AO TO THE EXTENT OF RS.42,75,774/ - FOR A.Y.2007 - 08 AND RS.65,25,418/ - FOR A.Y.2008 - 09. SUBSEQUENTLY THE AO ISSUED NOTICE TO THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY U/S.271(1)(C) MAY NOT BE LEVIED. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE AO HELD THAT THE ASSESSEE SUBMITTED INACC URATE PARTICULARS OF INCOME WHICH HAS RESULTED INTO CONCEALMENT OF INCOME. THUS, A PENALTY OF RS.14,39,230/ - & RS.22,17,990/ - IN A.Y.2007 - 08 & 2008 - 09 RESPECTIVELY WAS LEVIED @100% OF THE TAX SOUGHT TO BE EVADED. 4. BY THE IMPUGNED ORDER, THE CIT(A) DELETE D THE PENALTY SO LEVIED FOR BOTH THE YEARS UNDER CONSIDERATION AFTER HAVING FOLLOWING OBSERVATIONS : - 2.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE A.O. AND FACTS OF THE CASE CAREFULLY, IT IS NOTICED THAT THIS ISSUE HAS ALREADY BEEN DECIDED IN ITS OWN CASE IN FAVOUR OF THE APPELLANT FOR A.Y.2006 - 07 BY HOLDING AS UNDER : - 'I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE AO AND FACTS OF THE CASE CAREFULLY . IT IS NOTICED THAT DURING THE ASSESSMENT PROCEEDINGS THE A'O. HAS MADE DISALLOWANCE ON ACCOUNT OF INTEREST INCOME, CST REFUND, HANDLING CHARGES, CHEQUE BOUNCING CHARGES, MISCELLANEOUS INCOME AND SUNDRY BALANCE TOTALING TO RS. 46. 55. THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 10B ON THIS INCOME BUT THE AO HAS MADE DISA LLOWANCE BY TREATING IT AS INCOME FROM OTHER SOURCES NOT ELIGIBLE FOR DEDUCTION U/S. 10B. THE ID. CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER TO THE EXTENT OF RS.46,55,505/ - . SECONDLY THE AO HAS MADE DISALLOWANCE U/S.145A AMOUNTING TO RS.1,07, 125/ - ON ITA NO S . 6433& 6434 / 13 3 ACCOUNT OF EXCISE DUTY AND CLOSING STOCK OF RS. 1.8 CRORE AFTER GIVING CREDIT OF OPENING STOCK OF RS. 72.96 LAKH. THE CIT(A) HA S CONFIRMED THE ACTION OF THE AO . THUS THE AO HAS LEVIED PENALTY BY TREATING IT AS INACCURATE PARTICULARS FILED BY THE A SSESSEE. ON THE OTHER HAND THE AR OF THE APPELLANT HAS SUBMITTED THAT BOTH THE DISALLOWANCES WERE MADE ON LEGAL ISSUES AND THE ASSESSEE HAS NOT CONCEALED ANY FACTS IN THE RETURN OF INCOME FILED. FURTHER IT WAS ARGUED THAT ON LEGAL ISSUES THE AO HAS LEVIED PENALTY IN THE CASE OF THE APPELLANT FOR A Y 2001 - 02 TO 2005 - 06. THE LD. CIT(A) AND THE HON'BLE TRIBUNAL HAS DELETED THE PENALTY. FURTHER IT WAS SUB MITTED THAT FOR A Y 2001 - 02 THE HON'BLE BOMBAY HIGH COURT HAS ALSO CONFIRMED THE ORDER OF CIT(A) AND THE TR IBUNAL IN DELETING THE PENALTY IN ASSESSEE'S OWN CASE. FROM THE PERUSAL OF SUBMISSIONS AND FACTS OF THE CASE IT IS NOTICED THAT THE ISSUE OF LEVY OF PENALTY ON ACCOUNT OF REDUCING THE DEDUCTION U/S. 10B AND DISALLOWANCE MADE U/S.145A THE ISSUE IS FULLY COV ERED BY THE DECISION OF CIT(A) AND THE HON 'BL E TRIBUNAL IN ASSESSEE'S OWN CASE FOR A YRS. 2001 - 02 TO 2005 - 06. MOREOVER. THE CASE OF THE APPELLANT IS SQUARELY C OVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M/ S. RELIANCE PETRO PRODUCTS LIMIT ED 189 TAXMANN 322 WHERE IT IS HELD THAT 'MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE'. SINCE THE ISSUE IS PURELY LEGAL AND NO FACTS HAVE BE EN CONCEALED BY THE ASSESSEE THEREFORE, THE PENALTY LEVIED BY THE AO IS NOT SUSTAINABLE, HENCE, DELETED. T H E GROUND OF APPEAL IS ALLOWED. ' SINCE THE FACTS & CIRCUMSTANCES ARE SAME THA T THE CIT(A) IN EARLIER YEARS AND HON'BLE TRIBUNAL HAS DELETED THE PEN ALTY AND EVEN THE HON'BLE BOMBAY HIGH COURT HAS ALSO DISMISSED THE APPEAL OF THE DEPARTMENT BY HOLDING AS UNDER: - 'HAVING SEEN THE FINDINGS OF FACT RECORDED BY THE TRIBUNAL BASED ON APPRECIATION OF EVIDENC E, WE DO NOT FIND ANY SUBSTANTI AL QUESTION OF LAW ARISING IN THE APPEAL. IN THE RESU LT, THIS APPEAL IS LIABLE TO BE DISMISSED FOR WANT OF SUBSTANTIAL QUESTION OF LAW. ORDER ACCORDINGLY. ' SINCE THE FACTS & CIRCUMSTANCES OF THE CASE ARE THE SAME, THEREFORE, FOLLOWING THE DECISION IN THE EARLIER YEARS, P ENALTY LEVIED BY THE AO IS DELETED AND GROUND OF APPEAL IS ALLOWED. 3. IN THE RESULT, APPEALS ARE ALLOWED. 5. AGAINST THE AFORESAID ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. ITA NO S . 6433& 6434 / 13 4 6. LD. DR RELIED ON THE ORDERS OF THE AO AND SUBMITTED THAT TH OUGH THE ASSESSEE HAD FURNISHED CERTAIN DETAILS IN THE COURSE OF ASSESSMENT PROCEEDINGS, BUT THE SAME WERE APPARENTLY NOT ACCEPTED IN THE COURSE OF SCRUTINY PROCEEDINGS ITSELF. THEREFORE, THE AO WAS RIGHT IN LEVYING PENALTY U/S.271(1)(C) OF THE ACT OF RS.1 4,39,230/ - FOR ASSESSMENT YEAR 2007 - 08 AND RS.29,36,705/ - FOR ASSESSMENT YEAR 2008 - 09 . 7. ON THE OTHER HAND, LD. AR RELIED ON THE IMPUGNED ORDER OF THE CIT(A) DATED 7 - 8 - 2013 AND SUBMITTED THAT THE CIT(A) AFTER DETAILED DISCUSSION HAS DELETED THE PENALTY SO LEVIED. LD. AR FURTHER SUBMITTED THAT IN A.Y.2001 - 02 THE TRIBUNAL IN ASSESSEES OWN CASE HAD DROPPED THE PENALTY WHICH WAS CONFIRMED BY THE HONBLE BOMBAY HIGH COURT. THEREFORE, THE INSTANT CASE IS ALSO COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S RELIANCE PETRO PRODUCTS LIMITED, 189 TAXMANN 322 . 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE RECORD CAREFULLY. WE FOUND FROM THE ORDER OF THE CIT(A) THAT THE CLAIM OF THE ASSESSEE WAS BONAFIDE AND THE ASSESSEE HAS NOT CONCEA LED ANY PARTICULARS OF INCOME. IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2006 - 07, THE TRIBUNAL VIDE ORDER DATED 13 - 8 - 2014 IN ASSESSEES OWN CASE CONFIRMED THE DELETION OF PENALTY IMPOSED U/S.271(1)(C) OF I.T.ACT. FURTHERMORE, T HE CIT(A) AFTER RELYING ON THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE RELIANCE PETROPRODUCTS LIMITED (SUPRA ) , DELETED THE PENALTY LEVIED BY THE AO. THEREFORE, WE SEE NO REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE CIT(A) IN DELETING THE PENALTY. ITA NO S . 6433& 6434 / 13 5 ACCORDINGLY, WE DI SMISS BOTH APPEALS OF THE REVENUE FOR THE YEARS UNDER CONSIDERATION. 9 . IN THE RESULT, BOTH APPEALS OF REVENUE ARE DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 17/04 / 201 5 . SD/ - SD/ - ( ) ( SANJAY GARG ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 17/04 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//