CALCHEM INDUSTRIES P. LTD, V. ITO 9(1)2,

MA 517/MUM/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6455 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 17-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS MALATHI SRIDHAR PER R K
• Assessee Lawyers: N M PORWAL
• Section: 80IB

Judgement Text

1 MA NO. 517/MUM/2010 (ITANO.3512/M/2007.) IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI C CC C BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI D MANMOHAN, VP & D MANMOHAN, VP & D MANMOHAN, VP & D MANMOHAN, VP & SHRI R K PANDA, AM SHRI R K PANDA, AM SHRI R K PANDA, AM SHRI R K PANDA, AM MISCELLANEOUS APPLICATION NO.517/MUM/2010 MISCELLANEOUS APPLICATION NO.517/MUM/2010 MISCELLANEOUS APPLICATION NO.517/MUM/2010 MISCELLANEOUS APPLICATION NO.517/MUM/2010 ARISING OUT OF ARISING OUT OF ARISING OUT OF ARISING OUT OF ITA NO. 3512/MUM/2007 (ASST YEAR21-02) M/S CALCHEM INDUSTRIES P LTD CHANDBAI PALANCE BAZAR ROAD BANDRA (W) MUMBAI 5 VS THE INCOME TAX OFFICER] WARD 9(1)(2), MUMBAI ( (( (APP APP APP APPLICANT LICANT LICANT LICANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO.AAACC2402R AAACC2402R AAACC2402R AAACC2402R A SSESSEE BY SHRI N M PORWAL REVENUE BY MRS MALATHI SRIDHAR PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM THE ASSESSEE, THROUGH THIS MISCELLANEOUS APPLICATIO N, REQUESTS THE TRIBUNAL TO RECALL THE ORDER FOR FRESH HEARING OR A LTERNATIVELY MODIFY THE ORDER WHEREIN THE TRIBUNAL HAS REVERSED THE ORDER OF THE CIT(A) AND UPHELD THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271 (1) ( C) OF THE I T ACT. 2 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSE E IN THE INSTANT CASE HAD DEBITED THE HEAD OFFICER EXPENSES TO THE ROHA UNIT WHICH CLAIMS 30% DEDUCTION U/S 80IB AND NO EXPENSES HAVE BEEN ALLOCATED TO THE PONTA UNIT WHICH IS ELIGIBLE FOR 100% DEDUCTION/S 80IB. UNDER THESE CIRCUMSTANCE S, THE ASSESSING OFFICER APPORTIONED THE EXPENSES IN RATIO OF THEIR TURNOVER ON ESTIMATE BASIS AND ALLOCATED EXPENSES TO BOTH THE UNITS WHICH HAVE BEE N UPHELD BY THE TRIBUNAL. THE ASSESSING OFFICER; THEREAFTER LEVIED PENALTY FOR WRONG PRACTICE ADOPTED BY THE ASSESSEE U/S 271(1)( C) OF THE ACT, WHICH WAS D ELETED BY THE CIT(A). WHEN THE MATTER CAME TO THE TRIBUNAL, THE TRIBUNAL REVER SED THE ORDER OF THE CIT(A) AND RESTORED THE ORDER OF THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE 2 MA NO. 517/MUM/2010 (ITANO.3512/M/2007.) HAD CLAIMED THE ENTIRE HEAD OFFICE EXPENSES IN THE P&L ACCOUNT OF ROHA UNIT WITHOUT ALLOCATING ANY EXPENDITURE TO THE OTHER UNI T WHICH CLAIMS 100% DEDUCTION/S 80IB AND THUS MAXIMISED THE PROFIT OF T HE ELIGIBLE UNIT AND MINIMISED THE TAX LIABILITY OF THE LESS ELIGIBLE UNIT. ACCORD INGLY, IT WAS HELD BY THE TRIBUNAL THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF INCOME SO AS TO ATTRACT THE PROVISIONS OF SEC. 271(1)( C) OF THE ACT. 3 NOW, THE ASSESSEE THROUGH THIS MISCELLANEOUS APPL ICATION REQUESTS THE TRIBUNAL TO RECALL THE ORDER FOR FRESH HEARING OR M ODIFY THE ORDER SINCE THE GROUND ON WHICH THE CIT(A) HAS CANCELLED THE PENALTY WAS N OT REVERSED BY THE TRIBUNAL. 3.1 THE LD COUNSEL FOR THE ASSESSEE, REFERRING TO T HE MISCELLANEOUS APPLICATION SUBMITTED THAT THE CIT(A) WHILE CANCELLING THE PEN ALTY IN HER ORDER HAS OBSERVED THAT THE ASSESSEE HAS NOT FAILED TO OFFER AN EXPLA NATION; AS PER PAST CONSISTENT PRACTICE FOR THE LAST SEVERAL YEARS HAD DEBITED TH E ENTIRE HEAD OFFICE EXPENSES TO THE ROHA UNIT; THAT THE SAID EXPLANATION OF THE ASS ESSEE IS BONAFDE AND TRUE AND THAT NO FACTS HAVE BEEN CONCEALED. MERELY BECAUSE T HE REVENUE DID NOT AGREE WITH THE EXPLANATION/VIEW OF THE ASSESSEE, IT WOULD NOT JUSTIFY THE VIEW THAT THE ASSESSEE HAD CONCEALED THE INCOME OR FURNISHED INAC CURATE PARTICULARS. 3.2 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE CIT(A)S OBSERVATIONS ARE NOT REVERSED BY THE TRIBUNAL AND S INCE THE VARIOUS CASE LAWS CITED WERE NOT CONSIDERED; THEREFORE, A MISTAKE APP ARENT FROM RECORD HAS CREPT IN. THEREFORE, THE ORDER OF THE TRIBUNAL SHOULD EIT HER BE RE-FIXED FOR FRESH HEARING OR THE SAME SHOULD BE MODIFIED BY CANCELLING THE P ENALTY LEVIED BY THE ASSESSING OFFICER. 3 MA NO. 517/MUM/2010 (ITANO.3512/M/2007.) 3.3 THE LD DR, ON THE OTHER HAND, WHILE SUPPORTING THE ORDER OF THE TRIBUNAL, SUBMITTED THAT THE BONAFIDENESS OF THE ASSESSEE WAS NOT AT ALL PROVED. BY DEBITING THE ENTIRE HO EXPENSES TO THE ROHA UNIT WI THOUT ALLOCATING ANY EXPENSE TO THE OTHER UNIT WHICH CLAIMS 100% DEDUCTION U/S 8 01B, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME WHICH IS NEITHER A BANAFIDE MISTAKE NOR AN INADVERTENT MISSTATE. THEREFORE, IT IS A CAS E FALLING UNDER CLAUSE (B) OF EXPLANATION 1 TO SEC. 271(1)( C) OF THE I T ACT. SI NCE THE TRIBUNAL HAS PASSED A SPEAKING ORDER; THEREFORE, ANY FURTHER DISCUSSION O N THE SAME AMOUNTS TO REVIEW OF ITS OWN ORDER BY THE TRIBUNAL, WHICH IS NOT PERM ISSIBLE IN LAW. HE ACCORDINGLY, SUBMITTED THAT THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE SHOULD BE DISMISSED. 4 WE HAVE HEARD THE RIVAL SUBMISSIONS MADE BY BOTH THE PARTIES. WE FIND THE TRIBUNAL WHILE REVERSING THE DECISION OF THE CI T(A) AT PARA 8 OF THE ORDER HAS OBSERVED AS UNDER: SINCE THE ASSESSEE CLAIMED THE ENTIRE HEAD OFFICE EXPENSES IN THE PROFIT AND LOSS ACCOUNT OF ROHA UNIT WITHOUT ALLOCATING AN Y EXPENDITURE TO THE OTHER UNIT WHICH CLAIMS 100% DEDUCTION U/S 80IBAND THUS MAXIMISED THE PROFIT OF THE ELIGIBLE UNIT AND MINIMISED THE TAX L IABILITY OF THE LESS ELIGIBLE UNIT, THEREFORE, WE ARE OF THE OPINION THAT THE ASS ESSEE HAS FURNISHED IN ACCURATE PARTICULARS OF INCOME SO AS TO ATTRACT THE PROVISIONS OF SEC 271(1)( C) OF THE ACT. SIMILAR IS THE CASE FOR WRON G CLAIM OF DEDUCTION U/S 35D WE THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ORDER OF THE ASSESSING OFFICER. THE GROUNDS RAISED BY TH E REVENUE ARE ACCORDINGLY ALLOWED. 4.1 AT PARA 7 OF THE ORDER, IT IS MENTIONED THAT TH E TRIBUNAL HAS CONSIDERED THE VARIOUS DECISIONS CITED BEFORE IT. UNDER THESE CIR CUMSTANCES, WE DO NOT FIND ANY MERIT IN THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE SO AS TO RECALL THE ORDER OR MODIFY THE SAME. THE LD COUNSEL FOR THE AS SESSEE COULD NOT POINT OUT ANY APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL. THE VARIOUS ARGUMENTS 4 MA NO. 517/MUM/2010 (ITANO.3512/M/2007.) ADVANCED AS WELL AS THE CONTENTS OF THE MISCELLANEO US APPLICATION INDICATE THAT THE ASSESSEE, THROUGH THIS MISCELLANEOUS APPLICATIO N, TRIES TO REQUEST THE TRIBUNAL TO RECALL ITS OWN ORDER OR MODIFY THE SAME , WHICH IN OUR OPINION, AMOUNTS TO REVIEW OF ITS OWN ORDER BY THE TRIBUNAL, WHICH IS NOT PERMISSIBLE UNDER THE LAW. SINCE NO APPARENT MISTAKE COULD BE POINTED OUT BY THE LD COUNSEL FOR THE ASSESSEE; THEREFORE, THE MISCELLANEOUS APPL ICATION FILED BY THE ASSESSEE BEING DEVOID OF ANY MERIT, IS DISMISSED. 5 IN THE RESULT, THE MISCELLANEOUS APPLICATION FILE D BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THE 20 TH , DAY OF APRIL 2011. SD/- SD/- ( (( ( D MANMOHAN D MANMOHAN D MANMOHAN D MANMOHAN ) )) ) VICE PRESIDENT ( (( ( R K PANDA R K PANDA R K PANDA R K PANDA ) )) ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 20 TH , APRIL 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI