The ACIT,(OSD), Ward-8(4), Ahmedabad V. Shree Rama Multi Tech Limited, Ahmedabad

ITA 763/AHD/2006

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50801 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-10-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 28-03-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: S N SOPARKAR SRAR
• Section: 271(1)(c); 80IA

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD , ..'#$, % BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L.GEHLOT, ACCOUNTANT MEMBER ./ ITA NO. 763/AHD/2006 ' (' ' (' ' (' ' (' / // / ASSESSMENT YEAR:- 1998-99 DATE OF HEARING:13.10.11 DRAFTED:13.10.11 ACIT (OSD) WARD-8(4), AHMEDABAD / V/S . SHREE RAMA MULTI TECH LTD., RAMNIVAS NO.1 KHANPUR, AHMEDABAD PAN NO.AAABS0322F )*/ APPELLANT .. +,)*/ RESPONDENT )*/ BY APPELLANT SHRI S.K. GUPTA, CIT, DR +,)* - . / BY RESPONDENT SHRI S.N.SOPARKAR, SR-AR /0 - $1% / DATE OF HEARING 13/10/2011 2#( - $1% / DATE OF PRONOUNCEMENT 21/10/2011 / / / / ORDER . . '#$, % /PER A.L.GEHLOT, ACCOUNTANT MEMBER:- THIS IS AN APPEAL BY THE REVENUE. THE ASSESSMENT IN VOLVED IN THIS APPEAL IS 1998-99. THE APPEAL IS INSTITUTED AGAINST THE ORDER OF THE CIT(A)-XIV, AHMEDABAD, DATED 28-12-2005. THIS APPEAL ARISES OUT OF THE PEN ALTY ORDER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. GROUND REPRODUCED AS UNDER:- ITA NO.763/AHD/2006 A.Y. 1998-99 ACIT (OSD) WD.8(4) ABD V. SHREE RAMA MULTI TECH LTD. PAGE 2 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N REDUCING THE PENALTY U/S. 271(1)(C) OF THE ACT LEVIED BY THE A.O OF RS.1 ,15,41,646/- TO RS.49,72,446/- THEREBY GRANTING THE RELIEF OF RS.65 ,62,200/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT CASE THE AS SESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) OF RS.1,15,41,646/- ON ACCOU NT OF TOTAL ADDITION TO THE INCOME OF RS.3,26,76,132/- DETAILED AS UNDER:- 1) PURCHASE OF HDPE FABRICS QUOTED ON BOTH SIDES A T HIGHER RATE WHICH WERE SOLD AT A LOWER RATE RS.1,42,06,989/- 2) INTEREST ATTRIBUTABLE TO INTEREST BEARING BORROW INGS DIVERTED AS INTEREST FEE ADVANCES FOR NON-BUSINESS PURPOSE RS S.68,40,000/- 3) SHARE AND DEBENTURE ISSUE EXPENSES .54,71,162/ - 4) INTEREST INCOME REDUCED FROM PRE-OPERATIVE EXPEN SES RS.35,54,409/- 5) EXCESS DEDUCTION OF 29,03,572/- DISALLOWED U/S 8 0IA CLAIMED ON OTHER INCOME OF RS.96,78,575/- THE LD. CIT(APPEALS) PARTLY ALLOWED THE ASSESSEES APPEAL UPHOLDING THE PENALTY ADDITION IN RESPECT OF ADDITION OF RS.1,42, 06,989/- AND CANCELLED THE PENALTY ON OTHER ADDITIONS. THE REVENUE IS IN APPEA L AGAINST CANCELLATION OF PENALTY BY THE LD. CIT(A). 3. WE HAVE HEARD THE LD. REPRESENTATIVE OF THE PART IES. WE NOTICE THAT IN QUANTUM MATTER THE ASSESSEE PREFERRED APPEAL AGAINS T THE ORDER OF LD. CIT(APPEALS) BEFORE ITAT AND ITAT VIDE ITS ORDER EV EN DATED HAS DECIDED THE ISSUE AS DELETED THE ADDITION OF RS.35,54,409/ MADE BY ASSESSING OFFICER IN RESPECT OF SET OFF THE INTEREST INCOME. IN RESPECT OF ADDITION OF RS 68.40 CRORES OUT OF INTEREST EXCESS THE ISSUE HAS BEEN SENT BACK TO THE FILE OF ASSESSING OFFICER BY THE ITAT. THE ISSUES RELATING TO DISALLO WANCE OF RS.54,71,162/- AND RS.68.40 CRORES HAVE ALSO BEEN SENT BACK TO THE FIL E OF ASSESSING OFFICER. THEREFORE, PENALTY U/S. 271(1)(C) IS NOT SUSTAINABL E. THE PENALTY IN RESPECT OF ITA NO.763/AHD/2006 A.Y. 1998-99 ACIT (OSD) WD.8(4) ABD V. SHREE RAMA MULTI TECH LTD. PAGE 3 DISALLOWANCE OF DEDUCTION U/S.80IA WE FIND THAT THI S GROUND IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT O F HONBLE APEX COURT IN THE CASE OF CIT V. RELIANCE PETROPRODUCT PVT. LTD. (2010) 322 ITR 174 (SC). FOLLOWING THE ABOVE JUDGMENT OF THE HONBLE APEX CO URT WE FIND THAT PENALTY FOR DISALLOWANCE OF DEDUCTION U/S 80IA IS NOT SUSTA INABLE. IN THE LIGHT OF ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF LD. CIT(APPEALS) IN RESPECT OF CANCELLATION OF PENALTY FOR WHICH THE RE VENUE IS IN APPEAL, THE ORDER OF THE LD. CIT(APPEALS) TO THAT EXTENT IS CONFIRMED . 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 3 - 2#( 4 5 21/10 /2011 # %/ 9 - '0 THIS ORDER PRONOUNCED IN OPEN COURT ON 21/10/ 2011 . SD/- SD/- ( ) (% ) (BHAVNESH SAINI) (A.L.GEHLO T) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, 21/10/2011 *DKP - -- - +$< +$< +$< +$< =<($ =<($ =<($ =<($ / COPY OF ORDER FORWARDED TO:- 1. )* / APPELLANT 2. +,)* / RESPONDENT 3. $ /? / CONCERNED CIT 4. /?- / CIT (A) 5. <' +$ , , / DR, ITAT, AHMEDABAD 6. 'D' E3 / GUARD FILE. BY ORDER/ , /TRUE COPY/ F/ G ,