M/S. FINOGLOBAL EXPORTS LTD, MUMBAI V. THE DY CIT 5(1), MUMBAI

ITA 685/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2372 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-04-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 30-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN KUMAR
• Assessee Lawyers: JEETENDRA JAIN
• Keywords: Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVAN , JM ITA NO.685/MUM/2008 : ASST.YEAR 2000-2001 M/SFINOGLOBAL EXPORTS LIMITED 105, MANI MAHAL, 11/21, MATHEW ROAD MUMBAI 400 004. PA NO.AAACF0528M. VS. THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 5(1) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JEETENDRA JAIN RESPONDENT BY : SHRI SHRAVAN KUMAR O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ON 2.11.2007 U PHOLDING THE PENALTY OF RS.30,00,000 IMPOSED BY THE ASSESSING OFFICER U/S.2 71(1)(C) OF THE ACT IN RELATION TO THE ASSESSMENT YEAR 2000-2001. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE CLAIMED DEDUCTION U/S.80HHC TO THE TUNE OF RS.72,53,506 BY SHOWING E XPORT SALES AT RS.6.81 CRORE. ON THE PERUSAL OF THE DETAILS, THE ASSESSING OFFICE R NOTED THAT ONLY A SUM OF RS.1.96 CRORE WAS REALIZED BY THE ASSESSEE IN TIME, OUT OF THE TOTAL EXPORT SALES AND THE REMAINING AMOUNT WAS OUTSTANDING AT RS.4.85 CRO RES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS CALLED UPON TO FURNISH THE REVISED CALCULATION OF DEDUCTION U/S.80HHC BY CONSIDERING T HE EXPORT REALIZATION AT RS.1.96 CRORE WHICH THE ASSESSEE DID. AS A RESULT O F THAT THE AMOUNT OF DEDUCTION U/S.80HHC WAS REDUCED TO RS.21.69 LAKHS AS AGAINST THE ORIGINAL CLAIM OF RS.72.53 LAKHS. THE ASSESSING OFFICER IMPOSED PENALTY U/S.27 1(1)(C) IN RESPECT OF THE DIFFERENTIAL AMOUNT OF REDUCTION IN DEDUCTION U/S .80HHC TO THE TUNE OF RS.50.84 LAKHS. SUCH PENALTY WAS IMPOSED AT RS.30 LAKHS. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. ITA NO.685/MUM/2008 M/S.FINOGLOBAL EXPORTS LIMITED. 2 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE ASSESSEE CLAIMED DEDUCTION U/S.80HHC ON THE BASIS OF THE REPORT OF THE CHARTERED ACCOUNTANT IN FORM NO.10CCA C WHICH IS AVAILABLE AT PAGES 6 TO 8 OF THE PAPER BOOK. THE CHARTERED ACCOU NTANT CERTIFIED THAT THE TOTAL DEDUCTION TO BE CLAIMED BY THE ASSESSEE U/S.80HHC I N RESPECT OF ASSESSMENT YEAR 2000-2001 WAS RS.72.53 LAKHS. IT IS ON THE BASIS OF THIS CERTIFICATION BY THE AUDITOR OF THE ASSESSEE THAT THE DEDUCTION U/S.80HHC AT THI S LEVEL CAME TO BE CLAIMED BY THE ASSESSEE. CHARTERED ACCOUNTANTS ARE EXPERT I N THIS FIELD AND HAVE BEEN STATUTORILY AUTHORIZED TO CERTIFY THE CORRECT AMOUN T OF DEDUCTION UNDER DIFFERENT PROVISIONS OF THE ACT, INCLUDING SECTION 80HHC. THE RESTING OF ASSESSEES CLAIM ON THE STRENGTH OF SUCH CERTIFICATE ISSUED BY THE AUDI TOR, WHICH WAS EVENTUALLY FOUND TO BE NOT ENTIRELY CORRECT, CANNOT BE CONSIDERED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE DID NOT MAKE EXPORT SALE OF RS.6.81 CR ORE AS CLAIMED BY THE ASSESSEE. THE DIFFERENCE OF OPINION ON THE QUANTUM OF DEDUCT ION U/S.80HHC AROSE ONLY ON ACCOUNT OF INADEQUATE REALIZATION OF EXPORT PROFITS IN THE RELEVANT PERIOD. IN OUR CONSIDERED OPINION THE ASSESSEE CANNOT BE HELD TO B E CAUGHT WITHIN THE MISCHIEF OF SECTION 271(1)(C) UNDER SUCH CIRCUMSTANCES. THE LEA RNED A.R. HAS PLACED ON RECORD A COPY OF THE ORDER OF THE MUMBAI BENCH OF THE TRIB UNAL IN M/S.TEKSONS COOLING SYSTEMS P.LTD. VS. ITO IN ITA NO.7128/MUM/06 IN WHI CH THE TRIBUNAL VIDE ITS ORDER DATED 24.3.2009 DELETED THE PENALTY IMPOSED U /S.271(1)(C) ON ACCOUNT OF REDUCTION IN THE CLAIM OF DEDUCTION U/S.80-IA WHICH WAS BASED ON THE REPORT OF THE AUDITOR. THE HONBLE DELHI HIGH COURT IN CIT VS. S.DHANABAN [(2009) 309 ITR 268 (DEL.)] HAS ALSO CANCELLED THE PENALTY U/S.271(1)(C) WHICH WAS IMPOSED BY THE ASSESSING OFFICER IN VIEW OF HIGHER CLAIM OF DEDUCT ION ON THE GROUND THAT THE ASSESSEE FILED CLAIM ON THE BASIS OF INCORRECT ADVI SE GIVEN BY HIS CHARTERED ACCOUNTANT. SIMILAR VIEW WAS EXPRESSED BY THE HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. DEEP TOURS PRIVATE LIMITED [(2005) 274 ITR 603 ITA NO.685/MUM/2008 M/S.FINOGLOBAL EXPORTS LIMITED. 3 (P&H)] . IN VIEW OF THE FOREGOING DISCUSSION, WE ARE OF TH E CONSIDERED OPINION THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN UPHOLDING T HE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S.271(1)(C). WE, THEREFORE, ORD ER FOR THE DELETION OF THIS PENALTY. 4. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 7 TH DAY OF APRIL 2010. SD/- SD/- ( ASHA VIJAYARAGHAVAN ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 7 TH APRIL, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A) - V, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.