Asstt.CIT, Cir-2, Nashik, v. Galvi Engineering P.Ltd. Nashik,

ITA 1494/PUN/2008 | 2003-2004
Pronouncement Date: 31-08-2010 | Result: Dismissed

Appeal Details

RSA Number 149424514 RSA 2008
Assessee PAN AABCG2114K
Bench Pune
Appeal Number ITA 1494/PUN/2008
Duration Of Justice 1 year(s) 9 month(s) 13 day(s)
Appellant Asstt.CIT, Cir-2, Nashik,
Respondent Galvi Engineering P.Ltd. Nashik,
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-08-2010
Assessment Year 2003-2004
Appeal Filed On 17-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI R.C. SHARMA (AM) ITA NO. 1494/PN/2008 (ASSTT. YEAR : 2003-04) ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-2 NASHIK .. APPELLANT V. GALVI ENGINEERING PVT. LTD. 114 STICE MUSALGAON SINNER NASHIK PAN : AABCG2114K . RESPONDENT C.O. NO. 13/PN/2010 (ARISING OUT OF ITA NO. 1494/PN/2008) (ASSTT. YEAR : 2003-04) GALVI ENGINEERING PVT. LTD. 114 STICE MUSALGAON SINNER NASHIK PAN : AABCG2114K . CROSS OBJECTOR V. ASSTT. COMMISSIONER OF INCOME-TAX RESPONDENT CIRCLE-2 NASHIK ASSESSEE BY : SHRI. P.S. SHINGTE DEPARTMENT BY : MS. MANJU AJWANI ORDER PER I.C. SUDHIR. JM THIS APPEAL FILED BY THE REVENUE IS ARISING OUT OF THE ORDER OF THE CIT(A)-I NASHIK DT. 15.09.2008 FOR THE A.Y. 2003-04. REVENU E HAS QUESTIONED THE FIRST APPELLATE ORDER MAINLY ON THE GROUND THAT LD CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 13 07 803/- LEVIED BY THE A.O U/S. 2 71(1)(C ) ON ACCOUNT OF UNDERSTATEMENT OF INCOME BY CLAIMING INCORRECT AND HIGHER EXEMPTIONS U/S. 10 B OF THE ACT. 2. IN SUPPORT OF THE GROUND THE LD. D.R. TRIED TO JUSTIFY THE PENALTY ORDER WITH THE SUBMISSION THAT THE LD CIT(A) WHILE DELETING TH E PENALTY HAS FAILED TO ITA NO 1494/PN/2008 & C.O. 13/PN/2010 GALVI ENGG. P.LTD... A.Y.2003-04 PAGE OF 4 2 APPRECIATE THAT THE ASSESSEE HAD FURNISHED INACCURA TE PARTICULARS OF INCOME HENCE THE A.O WAS RIGHT IN INVOKING THE PENALTY PROVISION S U/S. 271(1)(C ) READ WITH EXPLANATION 1 THERETO. SHE SUBMITTED THAT AN INC ORRECT STATEMENT OF COMPUTATION WHICH HAS THE EFFECT OF MISLEADING THE A.O HAS TO BE TREATED AS CONCEALMENT OF PARTICULARS OF INCOME. SHE PLACED RELIANCE ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V/S. BHAIYALAL SHYAM BEHAR I 292 ITR 296 (ALLAHABAD.). 3. THE LD. A.R. ON THE OTHER HAND PLACED RELIANC E ON THE FIRST APPELLATE ORDER. 4. CONSIDERING THE ABOVE SUBMISSIONS IN VIEW OF TH E ORDERS OF THE LOWER AUTHORITIES AND DECISIONS RELIED UPON WE FIND THAT THE A.O HAD LEVIED PENALTY U/S. 271(1)(C ) ON THE BASIS THAT IN ITS RETURN OF INCOM E THE ASSESSEE HAD CLAIMED EXEMPTION U/S. 10 B WITHOUT GIVING SET OFF OF UNABS ORBED BUSINESS LOSS/DEPRECIATION. THE A.O HELD THAT THE ASSESSEE HAS INCORRECTLY CAR RIED FORWARD UNABSORBED DEPRECIATION OF RS. 26 98 677/- FOR SUBSEQUENT ASS ESSMENT YEAR 2004-05 WHICH HAS RESULTED INTO HIGHER CLAIM OF EXEMPTION U/S. 10 B AND WHICH HAS ALSO RESULTED IN UNDERSTATEMENT OF INCOME OF RS.26 98 677/-. THE A. O. ACCORDINGLY LEVIED PENALTY U/S. 271(1)(C ) AT RS.13 07 803/-. THE LD CIT(A) HAS DELETED THE PENALTY MAINLY ON THE BASIS THAT THE ASSESSEE HAD FURNISHED ALL THE R ELEVANT INFORMATION WITH THE RETURN OF INCOME IN RESPECT OF HIS CLAIM OF DEDUCT ION U/S. 10 B AND HAS NOT CONCEALED ANY PARTICULARS OF INCOME. THE LD CIT(A) HAS NOTED FURTHER THAT MERE REJECTION OF ASSESSEES CLAIM DISALLOWING PART OF D EDUCTION CLAIMED BY IT U/S. 10 B DOES NOT AMOUNT TO FURNISHING INACCURATE PARTICULAR S OF INCOME. THE LD CIT(A) HAS ALSO MENTIONED THAT CONTENTION OF THE ASSESSEE IS T HAT THE DEDUCTION U/S. 10 B IS TO BE ALLOWED FROM THE INCOME OF THE ELIGIBLE UNDERTAK ING AND UNABSORBED DEPRECIATION AND LOSSES ARE TO BE ALLOWED THEREAFTER IS SUPPORTE D BY SOME DECISION HENCE ADDITION IS DEBATABLE ON WHICH PENALTY U/S. 271(1) (C ) IS NOT LEVIABLE. TO SUPPORT HIS APPROACH THE LD CIT(A) HAS PLACED RELIANCE ON SEVERAL DECISIONS INCLUDING FOLLOWING ONE : ITA NO 1494/PN/2008 & C.O. 13/PN/2010 GALVI ENGG. P.LTD... A.Y.2003-04 PAGE OF 4 3 (I) CIT VS. HIMATASINGIKE SEIDE LTD. (2006) 156 TAXMAN 151(KARNATAKA). (II) CIT VS. HARSHVARDHAN CHEMICALS & MINERALS LTD. (200 3) 259 ITR 212 UNDISPUTEDLY IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THERE WAS NO CONCEALMENT OF NECESSARY INFORMATION RELATING T O THE CLAIMED DEDUCTION U/S. 80 IB OF THE ACT MADE BY THE ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF ENGINEERING GOODS. SINCE THE ISSUE AS DI SCUSSED ABOVE WAS DEBATABLE ONE HENCE IT ALSO CANNOT BE ALLEGED BEYOND DOUBT THAT THERE WAS FURNISHING OF INACCURATE PARTICULAR OF INCOME ON THE PART OF THE ASSESSEE. THUS IN ABSENCE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TOWARDS THE CLAIMED DEDUCT ION U/S. 80 IB WE ARE OF THE VIEW THAT THE LD CIT(A) HAS RIGHTLY DELETED THE PE NALTY IN QUESTION LEVIED U/S. 271(1) (C) OF THE ACT. THE FACTS IN THE CASE OF CI T V/S. BHAIYALAL SHYAM BEHARI (SUPRA) RELIED UPON BY THE LD. D.R. ARE DISTINGUISH ABLE AS IN THAT CASE OF ASSESSEE FIRM CERTAIN DEPOSITS WERE FOUND IN THE NAME OF SI X PERSONS IN THE BOOKS OF ACCOUNTS OF ASSESSEE AND THOSE DEPOSITS WERE FOUND TO BE UNEXPLAINED AND ADDED TO THE INCOME OF THE ASSESSEE. BESIDES ANOTHER AD DITION OF RS. 19 700/- WAS MADE ON ACCOUNT OF UNEXPLAINED PETTY EXPENSES. FURTHER ADDITION OF RS.44 500/- WAS SUSTAINED BY THE CIT(A) MADE ON ACCOUNT OF UNEXPLAI NED CASH CREDIT. UNDER THESE CIRCUMSTANCES THE HONBLE ALLAHABAD HIGH COURT IN VIEW OF THE EXPLANATION 1 TO SECTION 271(1)(C ) WAS PLEASED TO RESTORE THE PENAL TY. THUS THAT DECISION OF HONBLE ALLAHABAD HIGH COURT IS NOT HELPFUL TO THE REVENUE. IN THE PRESENT CASE AS DISCUSSED ABOVE THE FIRST APPELLATE ORDER ON THE I SSUE OF LEVY OF PENALTY IN QUESTION IS COMPREHENSIVE AND REASONED ONE HENCE WE ARE NOT INCLINED TO INTERFERE THEREWITH. THE SAME IS UPHELD. THE GROUND RAISED IS ACCORDINGLY REJECTED. CONSEQUENTLY THE APPEAL IS DISMISSED. C.O. NO. 13/PN/2010 5. THE ASSESSEE HAS PREFERRED CROSS OBJECTION IN SU PPORT OF THE FIRST APPELLATE ORDER. SINCE IN THE ABOVE APPEAL WE HAD ALREADY U PHELD THE FIRST APPELLATE ORDER ITA NO 1494/PN/2008 & C.O. 13/PN/2010 GALVI ENGG. P.LTD... A.Y.2003-04 PAGE OF 4 4 DELETING THE PENALTY IN QUESTION THE CROSS OBJECTI ON HAS BECOME INFRUCTUOUS. THE SAME IS DISMISSED AS SUCH. 6. IN THE RESULT APPEAL AND CROSS OBJECTION ARE DI SMISSED. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST AUGUS T 2010 SD/- SD/- (R.C. SHARMA) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 31 ST AUGUST 2010 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT -I NASHIK 4. THE CIT(A)-I PUNE 4. THE D.R. B BENCH PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE