RAMKRISHNA ELECTRICALS LTD, Nagpur V. ADDL. CIT, RANGE-7, Nagpur

ITA 95/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93386 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAVE
• Assessee Lawyers: VIVEK KHEMKA
• Keywords: Wrong claim

Judgement Text

1 ITA NO. 95/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.95/NAG/2013 ASSESSMENT YEAR : 2006-07. RAMKRISHNA ELECTRONICS LTD., ADDL. COMMISSIONER OF N-5, MIDC INDUSTRIAL AREA, V/S. INCOME-TAX, HINGNA ROAD, NAGPUR. RANGE-7, NAGPUR. PAN AAACR 7724E APPELLANT. RESPONDENT. APPELLANT BY : SHRI VIVEK KHEMKA. RESPONDENT BY : SHRI A.R. NINAVE. DATE OF HEARING - 19-05-2015 DATE OF PRONOUNCEMENT : 19-05-2015. O R D E R PER SHRI SHAMIM YAHYA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-II, NAGPUR DATED 19-12-2012 AND PERTAI NS TO ASSESSMENT YEAR 2006- 07. 2 ITA NO. 95/NAG/2013 2. THE ISSUE RAISED IN THIS APPEAL IS THAT THE LEAR NED CIT(APPEALS) ERRED IN CONFIRMING THE LEVY OF PENALTY OF ` .2,63,034/- UNDER SECTION 271(1)(C) OF THE I.T. ACT. 3. IN THIS CASE THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IA OF ` .76,645/- WAS DENIED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE SUPPLIES TRANSFORMERS TO MAHARASHTRA STATE DISTRIBUTION AND POWER SUPPLY CO. THIS IN AO'S OPI NION DID NOT ENABLE THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80IA FOR CARRYING THE BUSINESS IN INFRASTRUCTURE FACILITY. THE ASSESSING OFFICER OPIN ED THAT DEDUCTION UNDER SECTION 80IA IN THIS CASE WILL BE ALLOWED ONLY TO MAHARASHT RA STATE DISTRIBUTION AND POWER SUPPLY CO. AND NOT TO THIS COMPANY AS THERE IS NO D IRECT NEXUS OF DISTRIBUTION OF POWER WITH ITS CONSUMERS. ACCORDINGLY ASSESSEES C LAIM OF DEDUCTION UNDER SECTION 80IA WAS DENIED. ON THIS AMOUNT PENALTY UND ER SECTION 271(1)(C) OF ` .2,63,034/- WAS LEVIED. THE PENALTY WAS UPHELD BY T HE LEARNED CIT(APPEALS). IN THE APPELLATE ORDER THE LEARNED CIT(APPEALS) HAS PR IMARILY DISMISSED THE APPEAL FOR NON PROSECUTION. HE HAS ALSO CURROSILY MENTION ED THAT ON THE DETAILED REASONS MENTIONED BY THE ASSESSING OFFICER HE WAS D ECLINED TO INTERFERE IN THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IA I S THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING OF DISTRIBUTION OF TRANSFORMERS UT ILIZED IN THE POWER DISTRIBUTION LINE AND NET WORK. HOWEVER, THE ASSESSEES CLAIM HA S BEEN DENIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE I S NOT ACTUALLY ENGAGED IN DISTRIBUTION OF POWER. HENCE THE ASSESSEE DOES NOT FALL UNDER THE DEFINITION OF 3 ITA NO. 95/NAG/2013 CARRYING ON THE BUSINESS OF INFRASTRUCTURE FACILITY . WE FIND THAT SECTION 271(1)(C) POSTULATES LEVY OF PENALTY FOR CONCEALMENT OF INCO ME AND FURNISHING OF INACCURATE PARTICULARS. IN THIS CASE WE FIND THAT T HERE IS NO CONCEALMENT OF INCOME AND THERE IS ALSO NO CASE OF FURNISHING OF INACCURA TE PARTICULARS. THE ASSESSEE HAS DULY DISCLOSED ALL THE PARTICULARS OF INCOME AND MA DE A CLAIM WHICH IN ASSESSEES OPINION WAS A BONAFIDE CLAIM FOR DEDUCTION UNDER SE CTION 80IA. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS MADE AN EXFACI E BOGUS CLAIM. ASSESSEES CLAIM HAS BEEN DENIED BY THE ASSESSING OFFICER AFT ER GIVING CONSIDERABLE REASONING. IN SUCH A SITUATION, IN OUR CONSIDERED O PINION, THE ASSESSEE SHOULD NOT BE VISITED WITH THE RIGOR OF PENALTY UNDER SECTION 271(1)(C). IN THIS REGARD, WE ALSO DRAW SUPPORT FROM HONBLE APEX COURT DECISION IN TH E CASE OF RELIANCE PETRO PRODUCTS LTD. 322 ITR 158 FOR THE PROPOSITION THAT PENALTY UNDER SECTION 271(1)(C) IS NOT AUTOMATICALLY ATTRACTED WHENEVER ANY CLAIM O F THE ASSESSEE IS DENIED BY THE REVENUE. IN THE BACKGROUND OF THE AFORESAID DIS CUSSION AND PRECEDENT, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELET E THE LEVY OF PENALTY. 5. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MAY, 2015. SD/- SD/- (MUKUL K. SHRAWAT) (SHAMIM YAHYA) JUDICIAL MEMBER. ACCOUNTANT MEMBER NAGPUR, DATED: 19 TH MAY, 2015. 4 ITA NO. 95/NAG/2013 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. T RUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE