DCIT 8(3), MUMBAI V. SHATIVIJAY JEWELS LTD, MUMBAI

ITA 7485/MUM/2010

• Counselvise Citation: [2012] 129 COUNSELVISE.COM (IT) 9960 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 02-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V KRISHNAMOORTHY
• Assessee Lawyers: APURVA R SHAH
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.7485/MUM/2010 ASSESSMENT YEAR-2003-04 THE DY. CIT-8(3), AAYAKAR BHAVAN, MUMBAI-400 020 VS. M/S. SHANTIVIJAY JEWELS LTD., G-37, GEMS & JEWELLERY COMPLEX-III, SEEPZ, ANDHERI (E), MUMBAI-400 096 PAN-AAFCS 8914F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI V. KRISHNAMOORTHY RESPONDENT BY: MS. APURVA R. SHAH DATE OF HEARING :3.09.2012 DATE OF PRONOUNCEMENT:5.9.2012 O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- 18 DT.20.8.2010 FOR ASSESSMENT YEAR 2003-04. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN DELETING THE PENALTY OF RS. 53,92,070/- LEVIED BY T HE AO U/S. 271(1)(C) OF THE ACT. THIS GRIEVANCE OF THE REVENUE IS BASED ON THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOLD COIN FOOD PVT. LT D (2008) 304 ITR 308 (SC). 3. THE FACTS AT THE ASSESSMENT STAGE SHOW THAT THE ASSESSEE DECLARED TOTAL LOSS OF RS. 1,96,610/- FOR THE YEAR UNDER CON SIDERATION. THE ASSESSEE ITA NO.7485/M/2010 2 HAS ALSO CLAIMED EXEMPTION U/S. 10A OF THE ACT AT R S. 96,02,867/-. THE RETURNED INCOME WAS ASSESSED AT A LOSS OF RS. 2,69, 670/-. HOWEVER, THE TAX PAYABLE HAS BEEN COMPUTED ON BOOK PROFIT U/S. 115JB OF THE ACT. ON THE BASIS OF THIS, THE ASSESSING OFFICER INITIATED PENA LTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT. 4. DURING THE COURSE OF PENAL PROCEEDINGS, THE AO S HOW CAUSED THE ASSESSEE AS TO WHY PENALTY U/S. 271(1)(C) OF THE AC T SHOULD NOT BE LEVIED ONTHE DISALLOWANCES MADE TO THE RETURNED INCOME. A FTER CONSIDERING THE DETAILED REPLY OF THE ASSESSEE, THE AO CONCLUDED TH AT PROVISIONS OF SEC. 271(1)(C) R.W. EXPLANATION-I ARE ATTRACTED AND ACCOR DINGLY LEVIED PENALTY AT THE RATE OF 100% AT RS. 53,92,070/-. 5. THE MATTER WAS CARRIED BEFORE THE LD. CIT(A). B EFORE THE CIT(A), THE ASSESSEE CONTENDED THAT SINCE THE ASSESSMENT WAS O N LOSS OF RS. 2,69,670/-, THERE IS NO TAX LIABILITY. THE TAX LIABILITY HAS A RISEN ONLY DUE TO THE APPLICATION OF MAT U/S. 115JB OF THE ACT. THE LD. CIT(A) RELYI NG UPON THE DECISION OF ITO VS WIMCO SEEDLINGS LTD. (2008) 114 TTJ (DEL) 98 6 HELD THAT THE PENALTY U/S. 271(1)(C) CANNOT BE LEVIED WHERE THE TAX AS PE R REGULAR INCOME TAX PROCEEDINGS IS NIL AND TAX IS PAYABLE ONLY AS PER MAT PROVISIONS, ACCORDINGLY CANCELLED THE PENALTY. 6. REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF LTD. CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF AO. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES. ON IDENTICAL FACTS IN ITA NO. 6600/MU M/2011 WHEREIN WE HAVE HELD THAT PENALTY CANNOT BE LEVIED U/S. 271(1)(C) W HEN THE INCOME IS COMPUTED AS PER THE PROVISIONS OF SEC. 115JB OF THE ACT. IN THAT CASE, WE HAVE FOLLOWED THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS NALWA SONS INVESTMENTS LTD. (2011) 37 ITCL 218 (ITA NO. 1420/2009). ITA NO.7485/M/2010 3 FOLLOWING OUR OWN DECISION IN THE CASE OF ACIT VS. M/S. SURFACE GRAPHICS PVT. LTD. (ITA NO. 6600/M/2011), WE DISMISS REVENUES AP PEAL. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 5 TH DAY OF SEPTEMBER, 2012 SD/- SD/- (D.K. AGARWAL) (N.K. BILLAIYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 5 TH SEPTEMBER, 2012 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI