M/S AARTECH SOLONICS LIMITED, Bhopal V. THE DCIT 1(2), Bhopal

ITA 676/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5808 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Section: 143(3); 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER M/S. AARTECH SOLONICS LIMITED, E-2/57, ARERA COLONY, BHOPAL PAN: AACCA5369B VS. DY. CIT, 1(2), BHOPAL APPELLANT RESPONDENT APPELLANT BY SHRI HITESH CHIMNANI, CA RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 22.08.2016 DATE OF PRONOUNCEMENT 22.08.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, BHOPAL [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 27.05 .2016 AND PERTAINS TO ASSESSMENT YEAR 2008-09 AS AGAINST APPE AL DECIDED IN ASSESSMENT ORDER DATED 27-08-2014 OF DC IT WARD 1(2), INDORE [HEREINAFTER REFERRED TO AS THE AO]. I.T.A. NO.676/IND/2016 ASSESSMENT YEAR: 2008-09 M/S. AARTECH SOLANICS LTD., BHOPAL VS. DCIT, 1(2), BHOPA L I.T.A.NO. 676/IND/2016 A.Y.2008-09 PAGE 2 OF 7 2. THE GROUND RELATES TO SUSTAINING OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON ACCOUNT OF DISALLOWANCE OF C LAIM OF RS. 2,11,001/-. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE PENALTY ORDER WAS PASSED IN ASSESSMENT YEAR 2008-09 ON 27.08 .2004 AT AN ASSESSED INCOME OF RS. 12,45,046/-. SIMILARLY , THE PENALTY U/S 271(1)(C) WAS ALSO LEVIED FOR ASSESSMENT YEAR 2006-07, 2007-08 AND 2009-10 AND 2011-12. 4. IN THE ASSESSMENT ORDERS, THE ORDERS WERE PASSED KEEPING IN VIEW THE DIRECTION OF THE I.T.A.T. INDORE BENCH AND THE DIRECTION OF THE HON HIGH COURT OF JABALPUR ALO NGWITH THE REPORT OF THE EXPERTS PANEL. THE CLAIM OF DEDUCTIO N U/S 80IC OF THE ACT IN THE PARWANOO UNIT IN ALL THESE ASSESSM ENT YEARS AS CLAIMED BY THE ASSESSEE WAS REDUCED IN VIEW OF THE DIRECTION OF THE COURT AND EXPENSES CLAIMED BY THE ASSESSEE WERE APPORTIONED ON THE BASIS OF TURNOVER. OTHER ADD ITION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT YEA R 2008-09 WAS IN RESPECT OF DONATION DISALLOWED OF RS. 2,11,001 /-. THE M/S. AARTECH SOLANICS LTD., BHOPAL VS. DCIT, 1(2), BHOPA L I.T.A.NO. 676/IND/2016 A.Y.2008-09 PAGE 3 OF 7 ASSESSEE FILED AN APPEAL AGAINST THE LEVY OF PENALT Y ON ACCOUNT OF DISALLOWANCE OF DONATION. 5. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE PENALTY HAD BEEN LEVIED ON THE TOTAL ASSESSED INCOME AT RS. 12,45,064/-, WHICH INCLUDES RETURNED INCOME OF RS. 7,84,060/-. THEREFORE, THE LEVY OF PENALTY ON RETUR NED INCOME WAS INCORRECT AND NOT AS PER LAW. IT WAS ALSO SUBMITTE D THAT THE ADDITION OF RS. 2,11,001/- ON ACCOUNT OF DISALL OWANCE OF CLAIM U/S 80G WAS LEVIED INSPITE OF THE FACT THAT TH E ASSESSEE COMPANY SUBMITTED COPIES OF DONATION RECEIPTS ALONG WITH 80G CERTIFICATE BEFORE THE LD. CIT(A) IN APPELLATE PROC EEDINGS VIDE WRITTEN REPLY SUBMITTED ON 01.02.2014. HOWEVER, THE CLAIM OF THE ASSESSEE WAS NOT ALLOWED. 6. IN APPEAL, THE LD. CIT(A) HAS DELETED THE PENALTY I N RESPECT OF DEDUCTION U/S 80IC OF THE ACT, KEEPING I N VIEW THE DECISION IN APPEAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2010-11. HOWEVER, WITH REGARD TO PENALTY LEVIED BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2008-09 IN RE SPECT OF DONATION DISALLOWED OF RS. 2,11,001/-, THE CONTENTIO N OF THE ASSESSEE WAS NOT ACCEPTABLE AND PENALTY WAS CONFIRME D WITH M/S. AARTECH SOLANICS LTD., BHOPAL VS. DCIT, 1(2), BHOPA L I.T.A.NO. 676/IND/2016 A.Y.2008-09 PAGE 4 OF 7 THE DIRECTION THAT THE AO MAY VERIFY THE CALCULATIO N OF PENALTY AS PER THE PROVISIONS OF THE ACT. 7. BEING NOT SATISFIED WITH THE ORDER OF THE CIT(A), TH E ASSESSEE FILED THIS APPEAL BEFORE US. 8. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ADDITION OF RS. 2,11,001/- WAS MA DE BY THE AO ON ACCOUNT OF DONATION EXPENSES TREATING AS EXPL AINED NOT RELATED TO BUSINESS AND ALSO SEPARATELY INITIATED P ENALTY PROCEEDINGS FOR CONCEALMENT AND FURNISHING INACCURA TE PARTICULARS OF INCOME U/S 271(1)(C) OF THE ACT VIDE ASSESSMENT ORDER U/S 143(3) DATED 22.12.2010. 9. THE ASSESSEE PREFERRED APPEAL AGAINST THE ORDER BEF ORE THE CIT(A) AND THE LD. CIT(A) VIDE ORDER DATED 29.0 7.2011 HAS DELETED THE ENTIRE ADDITION OF RS. 2,11,001/- (PAPE R BOOK PAGE 46) THE REVENUE HAS NOT PREFERRED APPEAL BEFORE THE I.T.A.T. AGAINST THE SAID RELIEF. THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE I.T.A.T. AGAINST THE OTHER ADDITION U/S 80IC MAINTAINED BY THE LD. CIT(A). THE I.T.A.T. REMANDED THE ISSUE OF DEDUCTION U/S 80IC TO THE FILE OF THE AO VIDE OR DER DATED 3.03.2013 THE AO PASSED FRESH ORDER U/S 260 READ WIT H SEC M/S. AARTECH SOLANICS LTD., BHOPAL VS. DCIT, 1(2), BHOPA L I.T.A.NO. 676/IND/2016 A.Y.2008-09 PAGE 5 OF 7 143(3) ON 28.02.2014 AND AGAIN MADE THE ADDITION OF RS. 2,11,001/- ON THE GROUND THAT DISALLOWANCE OF DONATI ON CLAIM OF RS. 2,11,001/- WAS UPHELD BY THE I.T.A.T., WHEREAS THE LD. CIT(A) HAS ALREADY DELETED THE SAID ADDITION AND TH E DEPARTMENT HAD NOT PREFERRED ANY APPEAL IN THE SAID YEAR. FURTHER, THE AO PASSED THE ORDER U/S 271(1)(C) ON 2 7.08.2014 AND LEVIED PENALTY ON DISALLOWANCE ON GROUND THAT TH E ASSESSEE HAS CONCEALED HIS INCOME. THE ASSESSEE PRE FERRED APPEAL BEFORE THE CIT(A), WHO VIDE ORDER DATED 27.05 .2011 MAINTAINED THE SAID PENALTY. THUS, ON PERUSAL OF TH E FACTUAL MATRIX, IT WAS CONTENDED THAT SINCE THE VERY BASIS O F LEVY OF PENALTY DOES NOT EXIST, IN THE SENSE THAT IT STANDS ALREADY DELETED BY THE CIT(A) VIDE HIS ORDER DATED 29.07.20 11 AND THE REVENUE DID NOT AGITATE THE MATTER FURTHER. THIS IS SUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE AND, THUS, THE PE NALTY SO LEVIED BY THE ASSESSING OFFICER ON THIS COUNT OUGHT TO BE DELETED. WITHOUT PREJUDICE TO THE ABOVE, THE LD. AU THORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT A PER USAL OF THE PAPER BOOK PAGE 47 WILL SHOW THAT THE AMOUNT OF DONAT ION ALREADY STANDS ADDED BACK TO THE INCOME BY THE ASSE SSEE ITSELF M/S. AARTECH SOLANICS LTD., BHOPAL VS. DCIT, 1(2), BHOPA L I.T.A.NO. 676/IND/2016 A.Y.2008-09 PAGE 6 OF 7 IN THE COMPUTATION. THERE CAN BE NO CASE FOR DOUBLE DISALLOWANCE AND DEFINITELY NO CASE FOR PENALTY U/S 271(1)(C) OF THE ACT ON THAT COUNT. 10. THE LD. SENIOR DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE CIT(A). 11. WE HAVE CONSIDERED THE FACTS AND PERUSED THE MATERI AL ON RECORD. WE FIND THAT THE ADDITION OF RS. 2,11,00 1/- MADE IN THE ORIGINAL ASSESSMENT STANDS DELETED BY THE CIT(A ) VIDE HIS ORDER DATED 29.07.2011 AGAINST WHICH NO APPEAL WAS PR EFERRED BY THE REVENUE. IT IS ALSO NOTICED FROM THE PAPER B OOK PAGE 47 THAT THE AMOUNT OF DONATION WAS INCLUDED IN THE AMOU NT OF RS. 2,13,101/- WHICH WAS ADDED BACK BY THE ASSESSEE I N THE COMPUTATION OF TOTAL INCOME. THEREFORE, THERE REMAI NS NO CONCEALMENT OF INCOME ON ACCOUNT OF DONATION. CONSI DERING THESE FACTS, THE PENALTY LEVIED ON ACCOUNT OF DONAT ION OF RS. 2,11,001/- IS HEREBY DELETED. M/S. AARTECH SOLANICS LTD., BHOPAL VS. DCIT, 1(2), BHOPA L I.T.A.NO. 676/IND/2016 A.Y.2008-09 PAGE 7 OF 7 12. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 22 ND AUGUST, 2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED :22ND AUGUST, 2016. CPU* COPY OF THE ORDER FORWARDED TO : THE ASSESSEE/ PCIT- INDORE/ CIT(A)-I, INDORE, AO/ D R- INDORE BENCH/ GUARD FILE BY ORDER ASSISTANT REGISTRAR OF ITAT, INDORE BENCH