THE DCIT CIR 3(1), MUMBAI V. M/S. ICICI BANK LTD (ERSTWHILE ANGRAM FINANCE LTD), MUMBAI

ITA 7000/MUM/2007

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6591 (ITAT-MUMBAI)
• Duration Of Justice: 12 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 29-09-2016
• Assessment Year: 1997-1998
• Appeal Filed On: 23-11-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHISHIR DHAMIJA LD
• Assessee Lawyers: AARTI VISSANJI LD
• Keywords: Depreciation; Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

ITA NO.7000/MUM/2007 M/S. ICICI BANK LTD. [ERSTWHILE ANAGRAM FINANCE LTD.] ASSESSMENT YEAR :1997-98 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.7000/MUM/2007 ( / ASSESSMENT YEAR : 1997-98 ) D CIT CIRCLE - 3(1) ROOM NO.607 AAYKAR BHAVAN MUMBAI- 400 020. / VS. M/S. ICICI BANK LTD. [ERSTWHILE ANAGRAM FINANCE LTD.] LAXMI COMMERCIAL CENTRE BEHIND NABARD BANK, 2 ND FLOOR BANDRA-KURLA COMPLEX BANDRA (E), MUMBAI-400 051. ./PAN.: AAACI-1195-H / AAACT-1398-K ( %& /APPELLANT ) : ( '(%& / RESPONDENT ) ASSESSEE BY : MS. AARTI VISSANJI -LD.AR REVENUE BY : SHRI SHISHIR DHAMIJA-LD.CIT-DR / DATE OF HEARING : 16/09/2020 / DATE OF PRONOUNCEMENT : 16/09/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 1997-98 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-XXVII, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL ITA NO.7000/MUM/2007 M/S. ICICI BANK LTD. [ERSTWHILE ANAGRAM FINANCE LTD.] ASSESSMENT YEAR :1997-98 2 NO. CIT(A)-XXVII/DCIT-3(1)/IT-47/06-07 DATED 30/08/ 2007 ON FOLLOWING GROUNDS OF APPEAL: - 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S,271(1)(C) AMOUNTING TO RS.8,33,657/- ON THE DISALLOWANCE OF DEPRECIATION ON LEASED ASSETS.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) AMOUNTING TO RS.24,76,532/- ON THE DISALLOWANCE OF DEPRECIATION ON SALE AND LEASEBACK ASSETS.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) AMOUNTING TO RS.6,298/- ON THE DISALLOWANCE OF DEDUCTION U/S.80M.' 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) AMOUNTING TO RS.92,66,500/- BEING PREMIUM ON REDEMPTION OF DEBENTURES.' 5. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) AMOUNTING TO RS.7,17,937/- BEING EXPENDITURE FOR INCREASE IN SHARE CAPITAL.' 6. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S,271(1)(C) AMOUNTING TO RS.11,39,762/- ON THE DISALLOWANCE OF EXPENSES MADE U/S.35D.' 7. 'THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. AS EVIDENT, THE REVENUE IS AGGRIEVED BY DELETION OF CERTAIN PENALTY U/S 271(1)(C) BY LEARNED FIRST APPELLATE AUTHORITY. THE PENALTY WAS LEVIED BY LD. ASSESSING OFFICER (AO) VIDE ORDER DATED 31/03/2 006. 2. THE LD. CIT-DR, SHRI SHISHIR DHAMIJA, DEFENDED T HE LEVY OF PENALTY BY LD. AO. HOWEVER, LD. COUNSEL FOR ASSESSEE (AR), MS. AARTI VISSANJI, AT THE OUTSET, PLACED ON RECORD A TABULATED CHART T O SUBMIT THAT MOST OF THE ADDITIONS / DISALLOWANCES, WHICH FORMED THE SUB JECT MATTER OF LEVY OF PENALTY, HAVE EITHER BEEN DELETED BY THE TRIBUNAL O R RESTORED BACK TO LOWER AUTHORITIES FOR FRESH ADJUDICATION AND THEREF ORE, THE PENALTY WOULD NOT BE EVEN OTHERWISE SUSTAINABLE IN LAW. ITA NO.7000/MUM/2007 M/S. ICICI BANK LTD. [ERSTWHILE ANAGRAM FINANCE LTD.] ASSESSMENT YEAR :1997-98 3 3. UPON DUE CONSIDERATION OF MATERIAL ON RECORD, OU R ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN S UCCEEDING PARAGRAPHS. 4. FACTS LEADING TO IMPOSITION OF PENALTY ARE THAT THE ERSTWHILE ASSESSEE NAMELY M/S ANAGRAM FINANCE LIMITED WAS ASS ESSED U/S 143(3) ON 29/03/2000 WHEREIN THE ASSESSEE WAS SADDL ED WITH CERTAIN DISALLOWANCES / ADDITIONS. CONSEQUENTLY, PENALTY PR OCEEDINGS WERE INITIATED U/S 271(1)(C) AND CERTAIN PENALTY WAS LEV IED VIDE ORDER DATED 31/03/2006, INTER-ALIA, ON ACCOUNT OF FOLLOWING DISALLOWANCES / ADDITIONS:- UPON FURTHER APPEAL, LD. CIT(A) DELETED ADDITION AG AINST ITEM NOS.1 & 2, FINDING THE ISSUE TO BE DEBATABLE ONE. THE PENALTY AGAINST ITEM NO.3 HAS BEEN DELETED FOLLOWING THE PREDECESSORS ORDER FOR AY 1994-95. SIMILARLY, PENALTY AGAINST ITEM NOS.4 & 5 HAS BEEN DELETED FOLLOWING THE PREDECESSORS ORDER FOR AY 1993-94. THE PENALTY AGA INST ITEM NO. 6 HAS BEEN DELETED FINDING THAT IN THE ABSENCE OF MEAN RE A, NO PENALTY WOULD BE LEVIABLE. AGGRIEVED AS AFORESAID, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5.1 AS RIGHTLY POINTED OUT BY LD. AR, WE FIND THAT ISSUE OF DISALLOWANCE OF DEPRECIATION ON LEASED ASSET HAS ALREADY BEEN SE T ASIDE BY THE NO. PARTICULARS AMOUNT OF ADDITION (RS.) 1. CLAIM OF DEPRECIATION 19,38,738/- 2. SALE & LEASE BACK TRANSACTION 57,59,376/- 3. DEDUCTION U/S 80M 14,646/- 4. PREMIUM ON REDEMPTION OF DEBENTURES 2,15,50,000/ - 5. EXPENDITURE FOR INCREASE IN AUTHORIZED CAPITAL 1 6,69,620/- 6. EXPENSES U/S 35D 26,50,610/- ITA NO.7000/MUM/2007 M/S. ICICI BANK LTD. [ERSTWHILE ANAGRAM FINANCE LTD.] ASSESSMENT YEAR :1997-98 4 COORDINATE BENCH TO THE FILE OF LD. AO FOR RE-EXAMI NATION VIDE ITA NO. 1475/MUM/2005 ORDER DATED 22/10/2019 (PARA NOS. 16 TO 20). FURTHER, THE PENALTY ON IDENTICAL ISSUE HAS BEEN DELETED BY TRIBUNAL FOR AY 1995- 96, ITA NO.5821/MUM/2007 ORDER DATED 10/08/2018 (PA RA-4) WHEREIN IT WAS HELD THAT SINCE THE ADDITION ON THE BASIS OF WH ICH THE PENALTY WAS LEVIED DOES NOT SURVIVE, THE PENALTY WOULD NOT BE S USTAINABLE. RESPECTFULLY FOLLOWING THE SAME, WE CONFIRM THE DEL ETION OF PENALTY, ALBEIT ON A DIFFERENT GROUND. 5.2 THE QUANTUM ADDITION AGAINST ITEM NO.2 STAND DE LETED BY THE TRIBUNAL VIDE ITA NO. 1475/MUM/2005 ORDER DATED 22/ 10/2019 (PARA NOS. 21 TO 25). SINCE QUANTUM ADDITIONS HAS ALREADY BEEN DELETED, THE PENALTY AGAINST THE SAME WOULD NOT SURVIVE. HENCE, THE IMPUGNED ORDER WOULD NOT REQUIRE ANY INTERREFERENCE ON OUR PART. T HIS GROUND STAND DISMISSED. 5.3 ITEM NO.3 IS RELATED WITH PENALTY ON DISALLOWAN CE OF DEDUCTION U/S 80M. WE FIND THAT PENALTY ON IDENTICAL ISSUE HAS BE EN DELETED BY THE TRIBUNAL IN THE CASE OF ICICI LIMITED VIDE ITA NO.1 112/MUM/2008, ORDER DATED 12/04/2017 (PARA-6). RESPECTFULLY FOLLOWING T HE SAME, WE CONFIRM THE DELETION OF PENALTY. THIS GROUND STAND DISMISSE D. 5.4 WE FIND THAT THE ADDITION AGAINST ITEM NO.4 (PR EMIUM ON REDEMPTION OF DEBENTURES) HAS ALREADY BEEN SET ASIDE AND RESTO RED BACK TO THE FILE OF LD. AO FOR RE-ADJUDICATION VIDE ITA NO. 1475/MUM /2005 ORDER DATED 22/10/2019 (PARA NOS. 26 TO 29). SINCE THE QUANTUM ADDITIONS, AT THE MOMENT, DO NOT SURVIVE, THE PENALTY WOULD NOT BE SU STAINABLE AGAINST THE SAME. THIS GROUND STAND DISMISSED. ITA NO.7000/MUM/2007 M/S. ICICI BANK LTD. [ERSTWHILE ANAGRAM FINANCE LTD.] ASSESSMENT YEAR :1997-98 5 5.5 ITEM NO.5 IS RELATED WITH DISALLOWANCE OF EXPEN DITURE FOR INCREASE IN SHARE CAPITAL. WE FIND THAT PENALTY ON IDENTICAL IS SUE HAS BEEN DELETED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 1993-94, ITA NO.1417/MUM/2007, ORDER DATED 21/01/2009 WHEREIN IT WAS HELD THAT THE ISSUE WAS DEBATABLE ONE AND THE SAME WOULD NOT CONS TITUTE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME BY THE ASSESSEE. RESPECTFULLY FOLLOWING THE SAME, W E CONFIRM THE STAND OF LD. CIT(A) IN DELETING THE PENALTY ON THIS ISSUE . 5.6 THE LAST ITEM IS RELATED WITH DISALLOWANCE OF C LAIM U/S 35D. WE FIND THAT THE ASSESSEE CLAIMED DEDUCTION OF PRELIMINARY EXPENSES U/S 35D WHICH WAS REJECTED BY LD.AO IN TERMS OF DECISION OF HONBLE MADRAS HIGH COURT IN AGRO CARGO TRANSPORT LTD. V/S CIT (23 6 ITR 1000). WE FIND THAT THIS ISSUE WAS DEBATABLE ONE AND THE MERE REJE CTION OF ASSESSEES CLAIM WOULD NOT NECESSARILY TANTAMOUNT TO CONCEALME NT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS H ELD BY HONBLE SUPREME COURT IN CIT V/S RELIANCE PETROPRODUCTS LTD. (322 ITR 158). THE ASSESSEE MADE A BONA-FIDE CLAIM WHICH WAS NOT A CCEPTED BY THE REVENUE. HOWEVER, SAME WOULD NOT BE GOOD GROUND FOR LEVY OF PENALTY UNLESS IT WAS DEMONSTRATED THAT THERE WAS ANY CONCE ALMENT OF INCOME / FURNISHING OF INACCURATE PARTICULARS OF INCOME BY T HE ASSESSEE. THEREFORE, WE CONFIRM THE STAND OF LD. CIT(A) IN DE LETING THE PENALTY, ON THIS ISSUE. ITA NO.7000/MUM/2007 M/S. ICICI BANK LTD. [ERSTWHILE ANAGRAM FINANCE LTD.] ASSESSMENT YEAR :1997-98 6 6. RESULTANTLY, THE APPEAL STANDS DISMISSED IN TERM S OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 16 TH SEPTEMBER, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 16/09/2020 SR.PS, JAISY VARGHESE '#$%&% / COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '(%& / THE RESPONDENT 3. / ( ) / THE CIT(A) 4. / / CIT CONCERNED 5. 01'*2 , 2 , / DR, ITAT, MUMBAI 6. 1345 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.