DCIT, Parwanoo V. Sh. Vipan Gupta, Solan

ITA 86/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6624 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 09-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE MS.DIVA SINGH, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.86/CHD/2017 (ASSESSMENT YEAR : 2010-11) THE D.C.I.T., VS. SH.VIPAN GUPPTA PROP. CIRCLE PARWANOO. M/S JAYANTI POLYMERS INDUSTRIES, PLOT NO.30, DIC, DISTT. SOLAN,BADDI, PAN: ABXPG0206E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH, SR.DR RESPONDENT BY : SHRI MANOJ KUMAR, CA DATE OF HEARING : 01.11.2017 DATE OF PRONOUNCEMENT : 17.11.2017 ORDER PER ANNAPURNA GUPTA, A.M.: THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS ), SHIMLA (HEREINAFTER REFERRED TO AS CIT(APPEALS)) DATED 05.10.2016, RELATING TO ASSESSMENT YEAR 2010-11, DE LETING THE PENALTY LEVIED U/S 271(1) OF THE INCOME TAX ACT,1961(IN SHORT THE ACT). 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSING OFFICER HAD RESTRICTED THE ASSESSEES CLAIM OF DEDU CTION U/S 80 IC OF THE ACT TO 25% OF THE ELIGIBLE PROFITS AS AGAINST 100% CLAIMED BY THE ASSESSEE ON ACCOUNT OF SUBSTANT IAL EXPANSION UNDERTAKEN BY IT, FOR THE REASON THAT IT WAS THE 8 TH YEAR SINCE COMMENCEMENT OF PRODUCTION BY THE ASSE SSEE IN THE AREA SPECIFIED BY THE SECTION, WHILE AS PER THE SECTION DEDUCTION @100% OF THE ELIGIBLE PROFITS WA S ALLOWABLE ONLY FOR THE FIRST FIVE YEARS FROM THE DA TE OF 2 COMMENCEMENT OF PRODUCTION AND THEREAFTER @ 25% OF THE PROFITS FOR THE NEXT FIVE YEARS. THE SAID DISALLOWA NCE WAS UPHELD IN FURTHER APPEALS, BOTH BY THE CIT(A) AND T HE ITAT. 3. IN VIEW OF THE CONFIRMATION OF THE ORDER OF THE AO WITH RESPECT TO RESTRICTION OF DEDUCTION U/S 80IC, THE A O PROCEEDED WITH THE PENALTY PROCEEDINGS AND LEVIED P ENALTY U/S 271(1)(C) AMOUNTING TO RS.19,87,760/- VIDE ORDE R DATED 29/01/2016 FOR FURNISHING INACCURATE PARTICULARS OF INCOME. AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED APPEAL BEFORE THE LD.CIT(APPEALS).TH E LD.CIT(APPEALS) DELETED THE PENALTY LEVIED U/S 271( 1)(C) OF THE ACT RELYING UPON THE ORDER OF THE COORDINATE BE NCH OF THE TRIBUNAL IN THE CASE OF M/S HYCRON ELECTRONICS VS. ITO FOR ASSESSMENT YEAR 2009-10 IN ITA NO.326/CHD/2005. 4. AGGRIEVED BY THE ACTION OF THE LD.CIT(APPEALS), THE REVENUE HAS COME UP IN APPEAL BEFORE US. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER WHILE THE L D. COUNSEL FOR ASSESSEE PLACED RELIANCE UPON THE ORDER OF THE LD.CIT(APPEALS). 5. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIE S, AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(APPEAL S) IN DELETING THE PENALTY LEVIED FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE CASE OF M/S HYCRON ELECTRON ICS VS. ITO IN ITA NO.326/CHD/2015 RELATING TO ASSESSMENT Y EAR 2009-10. ON PERUSAL OF THE SAID ORDER WE FIND THAT THE I.T.A.T., IN THE SAID CASE, WAS SEIZED WITH AN IDEN TICAL ISSUE 3 OF PENALTY LEVIED U/S 271(1) , ON ACCOUNT OF RESTR ICTION OF DEDUCTION U/S 80 IC TO 25% AS AGAINST 100% CLAIMED BY THE ASEESSEE, BEYOND FIVE YEARS FROM THE COMMENCEME NT OF PRODUCTION, ON ACCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN BY IT. THE COORDINATE BENCH , TAKING NO TE OF AND AGREEING WITH THE ASSESSEES CONTENTION THAT THE CLAIM WAS BASED ON INTERPRETATION OF THE SECTION SO AS TO ALLOW 100% DEDUCTION OF PROFITS ON SUBSTANTIAL EXPANSION UNDERTAKEN, FOUND THE CLAIM OF THE ASSESSEE TO BE BONAFIDE AND NOT FALSE OR WRONG. FURTHER TAKING NOTE OF THE FACT THAT THE DELHI BENCH OF THE ITAT HAD ALLOWED IDENTICAL C LAIM IN THE CASE OF TIRUPATI LPG AND THAT THE APPEAL OF THE ASSESSEE WAS PENDING BEFORE THE HIGH COURT, HELD THAT THE IS SUE WAS DEBATABLE. THUS THE COORDINATE BENCH OF THE ITAT DE LETED THE PENALTY LEVIED HOLDING THAT THE ASSESSEES CLAI M OF DEDUCTION U/S 80IC OF THE ACT WAS DEBATABLE AND BON AFIDE AND MERELY BECAUSE ITS CLAIM WAS DISALLOWED, IT COU LD NOT BE TREATED AS CONCEALMENT OR FURNISHING OF INACCURA TE PARTICULARS OF INCOME. THE I.T.A.T. RELIED UPON TH E DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. RE LIANCE PETROPRODUCTS (P) LTD., 322 ITR 158 IN THIS REGARD. 6. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICA L TO THAT IN THE CASE OF M/S HYCRON ELECTRONICS (SUPRA) AND N O DISTINGUISHING FACTS HAVE BEEN BROUGHT TO OUR NOTIC E BY THE LD. DR IN THIS REGARD, WE AGREE WITH THE LD.CIT(APP EALS) THAT THE DECISION OF THE I.T.A.T. IN THE CASE OF M/ S HYCRON ELECTRONICS (SUPRA) WILL SQUARELY APPLY IN THE PRES ENT CASE. THE ORDER OF THE LD.CIT(APPEALS) IS, THEREFORE, UPH ELD AND 4 PENALTY LEVIED U/S 271(1), AMOUNTING TO RS. 19,87, 760/- IS DELETED. 7. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 17 TH NOVEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH