HYVA INDIA P. LTD, NAVI MUMBAI V. ACIT 10(3), MUMBAI

ITA 8248/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8210 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 26-07-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 29-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIWAS RAO
• Assessee Lawyers: J D MISTRY
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 8248/MUM/2010 ASSESSMENT YEAR 2004-05 HYVA INDIA P. LTD., PLOT NO. E1-215, MIDC, MAHAPE, NAVI MUMBAI 400 701 PAN: AAACH 2006 C VS. ACIT 1 0 ( 3 ), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI J.D. MISTRY REVENUE BY : SHRI GOLI SRINIWAS RAO DATE OF HEARING : 26-07-2012 DATE OF PRONOUNCEMENT : 01-08-2012 ORDER PER RAJENDRA, A.M. THE PRESENT APPEAL LIES AGAINST THE ORDER OF THE CI T(A)-22, MUMBAI DATED 30-09-2010, RAISING FOLLOWING GROUNDS OF APPEAL: 1. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE C IT(A) HAS ERRED IN UPHOLDING THE LEVY OF PENALTY ULS.27 1(1 )(C) OF TH E INCOME TAX ACT. IN DOING SO, THE CIT(A) HAS FURTHER ERRED IN OBSERVING THAT NO FACTS TO PROVE THE CLAIM MADE BONAFIDE WAS BROUGHT ON RECORDS, THI S OBSERVATION OF THE CIT(A) IS FACTUALLY INCORRECT. 2. THE APPELLANT RESERVES ITS RIGHT TO ADD TO, ALTER, AMEND, MODIFY OR DELETE ANY OF THE GROUNDS TAKEN IN THIS APPEAL. 2. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FO R THE A.Y. 2004-05 ON 01- 11-2004 DECLARING TOTAL INCOME AT RS. 6,49,67,980/- WHICH WAS PROCESSED U/S. 143(1) ITA NO. 8248/MUM/2010 HYVA INDIA P. LTD., 2 ACCEPTING THE RETURNED INCOME. THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 30-11- 2006 COMPUTING THE TOTAL INCOME AT RS. 7,27,05,850/ -. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND DEALIN G IN TRANSPORTATION SYSTEMS AND EQUIPMENTS. 3. IN THIS CASE, ON PERUSAL OF THE DETAILS FILED, AO FOUND THAT THE ASSESSEE HAD NOT INCLUDED EXCISE DUTY AND SALES TAX IN VALUATION OF CLOSING STOCK. DURING THE PRECEDING YEARS, ADJUSTMENTS WERE MADE TO THE CLOSING STOCK A ND CONSEQUENTLY TO OPENING STOCK OF THE NEXT YEAR. THE ASSESSEE STATED THAT THE IMP ACT OF CENVAT, ADJUSTMENTS ON PROFIT AND LOSS ACCOUNT IS NIL AND HENCE NO ADJUSTM ENT WAS NEEDED TO BE MADE U/S. 145A. AFTER CONSIDERING SUBMISSION OF THE ASSESSE E, AN ADDITION OF CLOSING STOCK AT RS. 37,57,228/- WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE WAS MADE. PENALTY PROCEEDINGS U/S. 271(1)( C ) WERE ALSO INI TIATED WITH REGARD TO SAID ADDITION. 4. ASSESSEE FILED AN APPEAL BEFORE THE FIST APPELLATE AUTHORITY (FAA). DECIDING THE APPEAL, HE HELD THAT SUBMISSION FOR DELETING TH E ADDITION MADE BY THE APPELLANT HAD TO BE REJECTED. HOWEVER, HE DIRECTED THE ASSES SING OFFICER (AO) TO VERIFY THE CLAIM OF THE ASSESSEE IN THIS REGARD AND ALLOW THE BENEFIT OF DEDUCTION U/S. 43B OF THE ACT. 4.1 MEANWHILE, PENALTY AMOUNTING TO RS. 10,80,782/- WA S IMPOSED U/S. 271(1)( C ) OF THE ACT BY THE AO ON ADDITION MADE TO CLOSING ST OCK OF RS. 37,57,228/- ON INCLUSION OF CENVAT FOR FURNISHING INACCURATE PARTI CULARS. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA AGAINST THE PENALTY ORDER. A FTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, HE HELD AS UNDER: ... T HE APPELLANT HAD FAILED TO SUBSTANTIATE ITS CLAIM T HAT AS ON THE DATE OF FILING OF RETURN TWO VIEWS REGARDING DISALLOWANCE U /S.145A WERE AVAILABLE ON THE BASIS OF WHICH IT HAD CLAIMED BENEFIT UNDER THE SAID SECTION, THAT THE APPELLANT HAD NOT BROUGHT ON RECORD ANY FACTS TO PR OVE THAT ITS CLAIM WAS BONA FIDE. HE UPHELD THE PENALTY IMPOSED BY (ASSESSING O FFICER) A.O. 4.2 HE FOUND THAT THE A.O. HAD NOT GIVEN EFFECT TO THE DIRECTIONS OF FAA AS CONTAINED IN THE QUANTUM ORDER. SO, HE DIRECTED TH AT BEFORE CALCULATING THE AMOUNT OF PENALTY IMPOSABLE U/S.271(L)(C) OF THE ACT, A.O. SH OULD CARRY OUT THIS EXERCISE TO ALLOW THE BENEFIT U/S.43B AS PER DIRECTIONS OF CIT( A). 5. BEFORE US, AUTHORIZED REPRESENTATIVE (AR ) SUBMITTED THAT AO HAS YET TO PASS CONSEQUENTIAL ORDER WITH REGARD TO THE QUANTUM OF A PPEAL. HE FURTHER STATED THAT HAD AO VERIFIED THE CLAIM MADE BY THE ASSESSEE-COMPANY WITH REGARD TO 145A CLAIM, NO PENALTY U/S. 271 (1)( C ) WOULD HAVE BEEN LEVIED. DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDER OF THE AO. 5.1 AFTER HEARING THE RIVAL SUBMISSION, WE ARE OF THE OPINION THAT MATTER SHOULD BE RESTORED BACK TO AO. HE IS DIRECTED TO PASS AN ORD ER IN PURSUANCE OF THE DIRECTIONS ITA NO. 8248/MUM/2010 HYVA INDIA P. LTD., 3 GIVEN BY THE FAA IN QUANTUM APPEAL. AFTER PASSING THE SAID ORDER, HE SHOULD DECIDE THE ISSUE OF IMPOSITION OF PENALTY AFRESH. APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST AUGUST, 2012. SD/- SD/- (B.R. MITTAL) (RAJENDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATE 1 ST AUGUST, 2012 TNMM COPY TO: 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR H BENCH, ITAT, MUMBAI 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI