DCIT, New Delhi V. M/s. Hero Motocorp Ltd., New Delhi

ITA 6574/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3106 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2002-2003
• Appeal Filed On: 10-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 271(1)(c); 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI G.D.AGRAWAL, VICE PRESIDE NT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-6574/DEL/2015 ( ASSESSMENT YEAR: 2002-03) DY.COMMISSIONER OF INCOME TAX, CIRCLE-11(1), NEW DELHI. VS . M/S. HERO MOTORCORP LTD. 34, BASANT LOK, VASANT VIHAR, NEW DELHI- 110057, PAN : AAACH0812J APPELLANT RESPONDENT ASSESSEE BY : SH. GAURAV JAIN, ADV. REVENUE BY : MS. RINKU SINGH, SR.DR ORDER PER SUDHANSHU SRIVASTAVA, J.M.: THIS APPEAL IS PREFERRED BY THE DEPARTMENT AGAINST ORDER DATED 27.10.2015 PASSED BY THE LD. CIT (APPEALS)-16 , NEW DELHI WHEREIN, VIDE THE IMPUGNED ORDER, THE LD. CIT (APPE ALS) HAS DELETED THE PENALTY OF RS. 29,89,941/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) FOR ASSESSMENT YEAR 2002-03. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS IN THE BUSINESS OF MANUFACTURE OF MOTORCYCLES. THE RETURN OF INCOME WAS DATE OF HEARING 26.02.2019 DATE OF PRONOUNCEMENT 28.02.2019 2 ITA N O. 6574/DEL/2015 (HERO MOTOCORP LTD.) FILED DECLARING AN INCOME OF RS. 608,36,69,250/-. T HE CASE WAS SELECTED FOR SCRUTINY AND, SUBSEQUENTLY, THE ASSESS MENT WAS COMPLETED AT AN INCOME OF RS. 641,60,95,880/- AFTER MAKING CERTAIN DISALLOWANCES/ADDITIONS. THE ASSESSEE HAD M ADE A CLAIM OF DEDUCTION U/S 80IA OF THE ACT AMOUNTING TO RS. 8 3,75,186/- IN RESPECT OF ITS POWER GENERATION UNIT AT ITS MANUFAC TURING FACILITY AT GURGAON. THE AO, HOWEVER, DISALLOWED THE ASSESSEES CLAIM FOR DEDUCTION BY HOLDING THAT THE INTER-UNIT TRANSFER O F POWER FROM THE POWER PLANT SHOULD HAVE BEEN AT THE PRICE AT WHICH THE HARYANA STATE ELECTRICITY BOARD WAS SUPPLYING THE SAME TO THE ASSESSEES PLANT I.E. RS. 4.05 PER UNIT. SINCE THE COST OF GEN ERATION WAS RS. 4.56 PER UNIT, WHICH WAS MORE THAN THE MARKET VALUE TAKEN BY THE ASSESSING OFFICER, NO DEDUCTION UNDER SECTION 80IA OF THE ACT WAS ALLOWED. ON APPEAL, THE LD. CIT (APPEALS) UPHELD TH E DISALLOWANCE AND ON FURTHER APPEAL, THE ITAT ALSO UPHELD THE DIS ALLOWANCE OF DEDUCTION. SUBSEQUENTLY, PENALTY OF RS. 29,89,941/- WAS IMPOSED BY THE ASSESSING OFFICER. THE LD. CIT (APPEALS) DEL ETED THE PENALTY ON THE GROUND THAT THE ISSUE WAS A DEBATABLE ONE AN D NOW THE DEPARTMENT IS BEFORE THE ITAT CHALLENGING THE DELET ION OF THE PENALTY. 3. AT THE OUTSET, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE/RESPONDENT SUBMITTED THAT THE HONBLE DELH I HIGH COURT 3 ITA N O. 6574/DEL/2015 (HERO MOTOCORP LTD.) HAS ADMITTED THE ASSESSEES APPEAL AGAINST THE QUAN TUM ADDITION CONFIRMED BY THE ITAT ON WHICH THE PENALTY HAD BEEN IMPOSED BY THE AO BUT DELETED BY THE LD. CIT (APPEALS). THE LD . AUTHORISED REPRESENTATIVE PLACED ON RECORD COPY OF ORDER OF TH E HONBLE HIGH COURT OF DELHI IN ITA NO. 31/2014 WHEREIN VIDE ORDE R DATED 15.07.2014, THE HONBLE HIGH COURT HAD FRAMED THE F OLLOWING SUBSTANTIAL QUESTION OF LAW: WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS RIG HT IN DISALLOWING THE CLAIM UNDER SECTION 80IA OF THE INC OME TAX ACT, 1961 FOR VIOLATION OF SUB SECTION (8)? 3.1 THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T IN VIEW OF JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. LIQUID INVESTMENT & TRADING COMPANY IN ITA NO. 240/ 2009, NO PENALTY WAS LEVIABLE AS THE ISSUE ON WHICH THE PENA LTY HAD BEEN LEVIED WAS A DEBATABLE ISSUE. IT WAS PRAYED THAT TH E ORDER OF THE LD. CIT (APPEALS) BE UPHELD. 4. IN RESPONSE, THE LD. SR. DEPARTMENTAL REPRESENTA TIVE SUPPORTED THE ORDERS OF THE ASSESSING OFFICER. IT W AS VEHEMENTLY ARGUED THAT, UNDISPUTEDLY, THE QUANTUM ADDITION/DIS ALLOWANCE HAD BEEN CONFIRMED BY THE ITAT AND, THEREFORE, THE PENALTY HAD BEEN WRONGLY DELETED BY THE LD. CIT (APPEALS). THE LD. SR. DR ALSO PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRECEDENT S: 4 ITA N O. 6574/DEL/2015 (HERO MOTOCORP LTD.) (1) UNION OF INDIA V. DHARAMENDRA TEXTILE PROCESSOR S [(2007) 295 ITR 244]; (2) CIT VS. ZOOM COMMUNICATION (P.) LTD. [191 TAXMAN 179 (DELHI) / [2010] 327 ITR 510 (DELHI) / [2010]23 3 CTR 465]; (3) CIT VS. MOSER BAER INDIA LTD. (184 TAXMAN 8 (SC)/ [ 2009] 315 ITR 460 (SC) / [2009] 222 CTR 213); (4) KHANDELWAL STEE L AND TUBE TRADERS VS. ITO [2018] 95 TAXMANN.COM 15 (MADRAS); (5) CIT VS. GATES FOAM & RUBBER CO [91 ITR 467] CIT VS. INDIA S EAFOOD [105 ITR 467]. 4.1 IT WAS PRAYED THE ORDER OF THE LD. CIT (APPEALS ) DESERVED TO BE SET ASIDE AND THE ORDER OF THE AO IMPOSING THE P ENALTY RESTORE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THIS IS A CAS E WHERE THE PENALTY LEVIED PERTAINS TO AN ISSUE IN RESPECT OF W HICH THE HONBLE DELHI HIGH COURT, IN ASSESSEES OWN CASE, FOR THE R ELEVANT ASSESSMENT YEAR HAS FRAMED SUBSTANTIAL QUESTION OF LAW. THUS, IT IS VERY MUCH APPARENT THAT THE ISSUE IS A DEBATABLE ISSUE. ACCORDINGLY, IN VIEW OF JUDGMENT OF THE HONBLE DEL HI HIGH COURT IN THE CASE OF CIT VS. LIQUID INVESTMENT & TRADING COMPANY (SUPRA), WE FIND NO REASON TO INTERFERE WITH THE AC T OF THE LD. CIT (APPEALS) IN DELETING THE PENALTY. WE ALSO NOTE THA T A SIMILAR PENALTY ON IDENTICAL ADDITION WAS DELETED BY THE IT AT DELHI BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 IN ITA NO. 5 ITA N O. 6574/DEL/2015 (HERO MOTOCORP LTD.) 4410/DEL/2014 VIDE ORDER DATED 19.12.2018. ACCORDIN GLY, IN VIEW OF OUR OBSERVATIONS AS MENTIONED AFORESAID, WE DISM ISS THE GROUNDS RAISED BY THE DEPARTMENT. 6. IN THE FINAL RESULT APPEAL OF THE DEPARTMENT ST ANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2019. SD/- SD/- (G.D.AGRAWAL) (SUDHANSHU SRIVA STAVA) VICE PRESIDENT JUDICIAL MEMBER DATED: 28.02.2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA N O. 6574/DEL/2015 (HERO MOTOCORP LTD.) DATE OF DICTATION 28/02/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28/02/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 28/02/2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 28/02/2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 28/02/2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 28/02/2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 28/02/2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28/0 2/2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER