Eastman Exports Glocal Clothing (P) Ltd., Tiruppur V. DCIT, Tiruppur

MA 1/CHNY/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5688 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 02-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS VIJAYA PRABHA JCITD R
• Assessee Lawyers: T BANUSEKAR
• Keywords: Depreciation; Capital receipt

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , ! '# , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI GEORGE MATHAN, JUDICIAL MEMBER M.P. NO.001/MDS./2017 ( ./ I.T.A.NO.102/MDS./2016 / ASSESSMENT YEAR :2011-12 ) M/S.EASTMAN EXPORTS GLOBAL CLOTHING (P) LTD., 12, 2 ND STREET, KUMAR NAGAR SOUTH, TIRUPUR 641 603,. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-I, TIRUPUR. [PAN AACCC 0952 E ] ( #0 / APPELLANT) ( 12#0 /RESPONDENT) / APPELLANT BY : MR.T.BANUSEKAR, C.A ! /RESPONDENT BY : MRS.VIJAYA PRABHA, JCIT,D.R ' # $%& / DATE OF HEARING : 28 - 07 - 201 7 '( $%& / DATE OF PRONOUNCEMENT : 28 - 07 - 201 7 3 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS MISCELLANEOUS PETITION FILED BY THE ASSESSE E SEEKING RECALL OF THE ORDER OF TRIBUNAL IN ITA NO.102/MDS. /2016 VIDE ORDER DATED 21.09.2016 FOR ASSESSMENT YEAR 2011-12. MP NO.001/MDS./2017 :- 2 -: 2. IN THIS CASE, THE ASSESSMENT FOR ASSESSMENT YEA R 2011-12 WAS FRAMED BY THE AO BY MAKING FOLLOWING ADDITIONS TO THE RETURN OF INCOME OF ASSESSEE. DISALLOWNANCE IN RESPECT OF ADVANCE MADE TO CIBI INTERNATIONAL 2,00,00,000/- DISALLOWNANCE U/S.80-IB 2,89,77,784/- DISALLOWNANCE OF INCOME FROM SALE OF SCRIBES 4,06,9 5,689/- DISALLOWNANCE IN RESPECT OF LEASE HOLD LAND 4,06,9 5,836/- DISALLOWNANCE OF DEPRECIATION CLAIMED ON INTANGIBLE ASSETS 5,00,00,000/- DISALLOWNANCE OF TUF REIMBURSEMENT CLAIM AS CAPITAL RECEIPT 1,71,71,868/- DISALLOWNANCE OF EXCESS DEPRECIATION ON MACHINERIES 19,66.245/ - DISALLOWNANCE OF AMOUNT OF PROTO TYPE SAMPLES 5 ,05,03,000 2.1 AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICE R, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL , LD.CIT(A) INTER ALIA DELETED THE FOLLOWING ADDITIONS. A) ADVANCES MADE TO CIBI INTERNATIONAL B) DISALLOWNANCE IN RESPECT OF LEASE HOLD LAND FURTHER, THE ASSESSEE HAS NOT CHALLENGED THE ISSUES RELATING TO THE DISALLOWANCE OF DEPRECIATION ON INTANGIBLE ASSETS. CONSEQUENT TO THIS, THE AO CONSIDERED THE DISALLOWANCE ON DEPRECIATION FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. 2.2 THE DEPARTMENT CARRIED THE APPEAL RELATING TO THE DELETION OF THREE ADDITIONS IN ITA NO.101/MDS.2016. MP NO.001/MDS./2017 :- 3 -: 3. THE TRIBUNAL ON THE ISSUES RELATING TO ADVANCE PAID TO CIBI INTERNATIONAL AND DEDUCTION U/S.80-IA WERE ALSO DEC IDED IN FAVOUR OF ASSESSEE. HOWEVER, THE DISALLOWANCE OF AMOUNT SPENT ON LEASEHOLD LAND WAS REMITTED TO THE FILE OF LD. ASSESSING OFF ICER FOR FRESH CONSIDERATION BY THE TRIBUNAL. FURTHER, THE ISSUE RELATING TO DELETION OF LEVY OF PENALTY IN ITA NO.102/MDS./2016, WHICH W AS CHALLENGED BY THE DEPARTMENT BEFORE THE TRIBUNAL WAS DISPOSED BY THE TRIBUNAL BY OBSERVING IN PARA 10.3 AS FOLLOWS:- 10.3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, IT IS PREPOSTEROUS TO DECID E THE ISSUE OF PENALTY LEVIED U/S.271(1)(C) OF THE ACT AT THIS STAGE, SIN CE CERTAIN ISSUE RELATING TO ADDITION OF DELETION BY THE LD.CIT(A) ARE REMITTED BY US TO THE FILE OF AO FOR FRESH CONSIDERATION FOR THE ASSE SSMENT YEAR UNDER CONSIDERATION. HENCE, AT THIS STAGE, THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED, STILL THE SUBJECT MATTER OF LITIGATION, WHICH IS NOT . HENCE, IN OUR OPINION, THE AO IS AT LIBERTY TO INITIATE THE PENALTY PROCEEDINGS ONLY AFTER GIVING EFFECT TO THE TRIBUNAL ORDER BY HIM IN THE ISSUE OF QUANTUM ADDITION. ACCORDINGLY, WE VACATE THE PENALTY ORDER AT THIS STAGE. AS SUCH WE DISMISS THI S APPEAL OF REVENUE AS INFRUCTUOUS. MP NO.001/MDS./2017 :- 4 -: 4. NOW, THE CONTENTION THE LD.A.R IS THAT THE ISSU E RELATING TO LEVY OF PENALTY U/S.271(1)(C) OF THE ACT INSTEAD OF HOLDING AS INFRUCTUOUS BY THE TRIBUNAL AS ABOVE, SHOULD HAVE B EEN DECIDED ON MERIT AND ACCORDINGLY, HE PRAYED THAT ORDER OF TRIBUNAL IN ITA NO.102/MDS./2016 BE RECALLED AND TO DECIDE ON M ERIT. 5. ON THE OTHER HAND, LD.D.R RELIED ON THE ORDER O F TRIBUNAL. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THOUGH THE SUBJECT MATTER OF LEVY OF PENALTY WAS NOT AN ISSUE RAISED BY THE REVENUE IN ITS QUANTUM APPEAL, THE TRIBUNAL WHILE D ECIDING THE ISSUE RELATING TO LEVY OF PENALTY U/S.271(1)(C) OF THE ACT, IT IS OBSERVED THAT THIS ISSUE PREPOSTEROUS TO DECIDE AND THE ASSESSMENT ORDER ON WHICH THE PENALTY WAS LEVIED, S TILL NOT ATTAINED FINALITY, IT HAS GIVEN A LIBERTY TO THE LD . ASSESSING OFFICER TO INITIATE THE PENALTY PROCEEDINGS ONLY AFTER GIVI NG EFFECT TO THE ORDER OF TRIBUNAL ON THE ISSUE OF QUANTUM ADDITION . THERE CANNOT BE TWO ASSESSMENT ORDERS, ONE FOR QUANTUM AD DITIONS, ANOTHER FOR LEVY OF PENALTY U/S.271(1)(C) OF THE AC T. IF WE ACCEPT THE CONTENTION OF THE LD.A.R THAT THE ISSUE WITH RE GARD TO LEVY OF PENALTY U/S.271(1)(C) OF THE ACT TO BE DECIDED ISOL ATELY AS THIS MP NO.001/MDS./2017 :- 5 -: ADDITION WAS NOT SUBJECT MATTER OF APPEAL BEFORE TR IBUNAL, IT LEADS ABSURDITY AS IT AMOUNTS TO CONSIDERING TWO DIFFERENT ORDERS; ONE FOR QUANTUM ADDITION AND OTHER FOR PENA LTY TO BE IMPOSED BY LD. ASSESSING OFFICER. SO, THE TRIBUNAL TOOK A CONSCIOUS DECISION TO GIVE LIBERTY TO INTITIATE TH E PENALTY PROCEEDINGS ONLY AFTER PASSING GIVING EFFECT TO THE ORDER OF TRIBUNAL IN THIS CASE. ACCORDINGLY, WE DO NOT FIN D ANY INFIRMITY IN PARA 10.3 OF THE ABOVE ORDER OF TRIBUNAL DATED 2 1 ST SEPTEMBER, 2016. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSIO N OF HEARING ON 28 TH JULY, 2017, AT CHENNAI SD/ - SD/ - ( ! '# ) (GEORGE MATHAN) 4 / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ) # / CHENNAI * / DATED: 28 TH JULY, 2017. K S SUNDARAM + $,- . -$ / COPY TO: 1 . / APPELLANT 3. ' /$ () / CIT(A) 5. -12 $3 / DR 2. ! / RESPONDENT 4. ' /$ / CIT 6. 24 5# / GF