ITO, Ludhiana v. M/s S.E. Exports, Baddi

ITA 1417/CHANDI/2010 | 2005-2006
Pronouncement Date: 30-09-2011 | Result: Dismissed

Appeal Details

RSA Number 141721514 RSA 2010
Bench Chandigarh
Appeal Number ITA 1417/CHANDI/2010
Duration Of Justice 9 month(s) 14 day(s)
Appellant ITO, Ludhiana
Respondent M/s S.E. Exports, Baddi
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-09-2011
Date Of Final Hearing 29-09-2011
Next Hearing Date 29-09-2011
Assessment Year 2005-2006
Appeal Filed On 16-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES BCHANDIGARH BEFORE SHRI MS SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NOS. 1339 & 1340/CHD/2010 ASSESSMENT YEAR:2004-05 & 2005-06 M/S S.E.EXPORTS V ITO WARD 1(3) (FORMERLY M/S SALUJA EXIM) LUDHIANA. 90 INDL. AREA BADDI. PAN NO. AAXFS-4051-N & ITA NO. 1417/CHD/2010 ASSESSMENT YEAR:2005-06 ITO WARD 1(3) M/S S.E.EXPORTS LUDHIANA. C/O INDL. AREA BADDI. PAN NO. AAXFS-4051-N (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI ASHWANI KUMAR DEPARTMENT BY : SHRI AJAY SHARMA DATE OF HEARING : 29.09.2011 DATE OF PRONOUNCEMENT : 30.09.2011 ORDER PER BENCH OUT OF THESE THREE APPEALS TWO APPEALS ARE FILED B Y THE ASSESSEE AGAINST SEPARATE ORDERS OF THE CIT(A) DATED 17.09.2 010 RELATING TO ASSESSMENT YEARS 2004-05 AND 2005-06 AGAINST PENALT Y LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT 1961. THE REVENUE HAS FILED CROSS APPEAL RELATING TO ASSESSMENT YEAR 2005-06 AGAINST THE PORTION OF PENALTY LEVIED U/S 271(1)(C) OF THE ACT DELETED BY THE CIT(A). 2 2. ALL THE THREE APPEALS RELATING TO THE SAME ASSES SEE ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA 1339/CHD/2010 : 3. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE TRIBUNAL HAS DELETED THE QUANTUM ADDITIONS IN THE CASE AND HENCE THERE IS NO BASIS FOR THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. ON THE PERUSAL OF THE RECORD WE FIND THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS ASSESSMENT WAS COMPLETED BY THE AO BY TREATING THE EXPORT INCENTIVES OF RS.75 78 269/- AS INCOME FROM OTHER SOURCES. THE AO ALSO DISALLOWED DEDUCTION CLAIMED U/S 80IB ON OTHER INCO ME INCLUDING DEPB AND DUTY DRAWBACK. THE CIT(A) RESTRICTED THE ADDITION TO RS.34 81 858/-. BOTH THE ASSESSEE AND THE REVENUE W ERE IN APPEAL AGAINST THE ORDER OF CIT(A) BEFORE THE TRIBUNAL. T HE TRIBUNAL IN ITA NO. 466/CHD/2008 IN APPEAL FILED BY THE REVENUE AND ITA NO. 531/CHD/2008 IN APPEAL FILED BY THE ASSESSEE VIDE O RDER DATED 31.12.2009 DELIBERATED UPON THE ISSUE OF ADDITION O F RS.75 78 269/-. THE TRIBUNAL VIDE PARAS 24 AND 25 OF THE ORDER DATE D 31.12.2009 RELYING UPON THE DECISION IN ITA NO. 463 AND 532/CH D/2008 OF EVEN DATE ALLOWED THE GROUNDS OF APPEAL RAISED BY THE AS SESSEE AND DISMISSED GROUND OF APPEAL RAISED BY THE REVENUE AN D HENCE THE ADDITION WAS DELETED BY THE TRIBUNAL (SUPRA). 4. THE AO HAD INITIATED PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT ON THE ABOVESAID ADDITION CONFIRMED BY CIT(A). THE PENALTY WAS LEVIED ON TWO ACCOUNTS I.E. FOR TREATING THE INCOME AS INCOME FROM OTHER SOURCES AND FOR CLAIMING WRONG DEDUCTION U/S 80IB ON DEPB AND DUTY DRAW BACK. THE CIT(A) IN THE APPEAL FILED AGAINST THE 3 ORDER OF THE AO LEVYING PENALTY U/S 271(1)(C) OF TH E ACT DELETED THE PENALTY IN RESPECT OF DISALLOWANCE OF DEDUCTION U/S 80IB OF THE ACT ON DEPB FOLLOWING THE RATIO LAID DOWN BY THE CHANDIGAR H BENCH OF TRIBUNAL IN CHIRAG INTERNATIONAL ( ITA NO. 401/CHD/ 2008 ORDER DATED 15.10.2008) AND M/S KARNA INTERNATIONAL (ITA NO. 1033/CHD/2009 ORDER DATED 24.05.2010). THE CIT(A) HOWEVER CONFIRMED THE LEVY OF PENALTY IN RESPECT OF ADDITIO N OF RS.34 81 858/- ON ACCOUNT OF INCOME FROM OTHER SOURCES. 5. WE FIND THAT THE AFORESAID ADDITION OF RS.34 81 858/- HAS BEEN DELETED BY THE TRIBUNAL VIDE ORDER DATED 31.12.2009 AND CONSEQUENTLY THERE IS NO MERIT IN THE LEVY OF PENA LTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY WE DIRECT THE AO TO DELETE T HE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL RA ISED BY THE ASSESSEE IN ITA NO. 1339/CHD/2010 ARE THUS ALLOWED . ITA 1340/CHD/2010 6. IN THE FACTS RELATING TO ASSESSMENT YEAR 2005-06 THE AO HAD MADE ADDITION ON THE GROUND THAT THE ASSESSEE HAD A LLOWED OVER- WITHDRAWALS TO THE PARTNERS ON WHICH NO INTEREST WA S CHARGED AS AGAINST THE INTEREST BEING PAID ON BORROWINGS FROM VARIOUS BANKS AND CREDIT INSTITUTION. THE AO HAD MADE AN ADDITION OF RS.43 15 231/-. THE CIT(A) DELETED THE ADDITION TO THE EXTENT OF RS .32 03 741/- AND BALANCE ADDITION OF RS.11 11 490/- WAS RETAINED BY CIT(A). THE TRIBUNAL IN ITA NO. 799/CHD/2008 AND ITA NO.876/CHD /2008 IN CONSOLIDATED ORDER WITH LEAD ORDER IN ITA NO.463/CH D/2008 ORDER DATED 31.12.2009 VIDE PARA 38 & 39 DELETED THE ENTI RE ADDITION. 7. THE AO HAD LEVIED PENALTY U/S 271(1)(C) OF THE A CT ON THE AFORESAID ADDITION OF THE DISALLOWANCE OF INTEREST AND ALSO 4 RE-COMPUTING OF DEDUCTION U/S 80IB AND 80HHC OF THE ACT ON ACCOUNT OF DEPB ETC. THE CIT(A) IN THE APPEAL AGAINST ORDE R LEVYING PENALTY U/S 271(1)(C) OF THE ACT DELETED THE PENALTY ON RE WORKING OF DEDUCTION U/S 80IB AND 80HHC OF THE ACT BUT UPHOLD THE PENALTY IN RESPECT OF DISALLOWANCE OF INTEREST. 8. THE ASSESSEE IS IN APPEAL AGAINST THE AFORESAID LEVY OF PENALTY ON THE DISALLOWANCE OF INTEREST. THE TRIBUNAL IN A SSESSEE'S OWN CASE HAS DELETED THE SAID ADDITION AND HENCE THERE IS N O MERIT IN LEVY OF ANY PENALTY ON THE AFORESAID ADDITION. ACCORDINGLY WE DIRECT THE AO TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE A CT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS ALLOWED. ITA 1417/CHD/2010 9. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CI T(A) RELATING TO ASSESSMENT YEAR 2005-06 WHEREIN THE PENALTY HAS BEE N DELETED BY CIT(A) ON THE REWORKING OF CLAIM OF DEDUCTION U/S 8 0IB AND 80HHC OF THE ACT. THE TRIBUNAL WHILE DECIDING THE PRESEN T ISSUE HAD UPHELD THE ORDER OF THE CIT(A) VIZ-A-VIZ REWORKING OF DEDU CTION U/S 80IB OF THE ACT ON INCOME BY WAY OF DUTY DRAW BACK AND DEPB . THE CIT(A) WHILE DELETING THE PENALTY LEVIED U/S 271(1 )(C) OF THE ACT PLACED RELIANCE ON THE ORDER OF THE TRIBUNAL IN DCI T V M/S KARNA INTERNATIONAL LUDHIANA (ITA NO.1033/CHD/2009). THE TRIBUNAL VIDE ORDER DATED 24.05.2008 IN-TURN FOLLOWING THE RATIO LAID DOWN IN M/S CHIRAG INTERNATIONAL(SUPRA) HAD HELD THAT NO PENALT Y IS LEVIABLE U/S 271(1)(C) OF THE ACT ON DENIAL OF DEDUCTION U/S 80I B OF THE ACT ON EXPORT INCENTIVES. THE ISSUE RAISED IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE RAISED BEFORE THE TRIBUNAL IN M/S CHIR AG INTERNATIONAL AND M/S KARNA INTERNATIONAL (SUPRA). FOLLOWING THE ABO VESAID ISSUE WE 5 ARE IN AGREEMENT WITH ORDER OF THE CIT(A) AND UPHOL DING THE SAME WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE . 10. IN THE RESULT BOTH THE APPEALS OF ASSESSEE IN ITA NO.1339/CHD/2010 AND ITA NO. 1340/CHD/2010 ARE ALLO WED AND THE APPEAL OF THE REVENUE IN ITA NO.1417/CHD/2010 IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF SEPTEMBER 2011. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH SEPT. 2011 POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH