ITO,, Ludhiana v. M/s Ramtech Software Ward Solutions Pvt. Ltd.,, Ludhiana

ITA 166/CHANDI/2010 | misc
Pronouncement Date: 31-12-2010

Appeal Details

RSA Number 16621514 RSA 2010
Assessee PAN AABCR0991F
Bench Chandigarh
Appeal Number ITA 166/CHANDI/2010
Duration Of Justice 40 year(s) 11 month(s) 29 day(s)
Appellant ITO,, Ludhiana
Respondent M/s Ramtech Software Ward Solutions Pvt. Ltd.,, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 31-12-2010
Appeal Filed By Department
Assessment Year misc
Appeal Filed On 01-01-1970
Judgment Text
700/CHANDI/10 1 IN THE INCOME TAX APPELLATE TRIBUNAL: SMC BENCH: CHANDIGARH BEFORE HONBLE SHRI D K SRIVASTAVA AM ITA NO. 166/CHANDI/2010 ASSESSMENT YEAR: 2005-06 I.T.O. V(3) LUDHIANA V RAMTECH SOFTWARE WARD SOLU TIONS PVT. LTD. MILLER GANJ LUDHIANA PAN: AABCR 0991 F (APPELLANT) (RESPONDENT-ASSESSEE) APPELLANT BY: SMT. SARITA KUMARI RESPONDENT BY: SHRI SUBHASH AGGARWAL ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 13.11.2009 CA NCELLING THE PENALTY AMOUNTING TO RS. 2 82 900/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF INCOME-TAX ACT. THE DEPARTMENT HAS TAKEN THE FOLLOW ING GROUNDS OF APPEAL: 1 THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON F ACTS IN DELETING THE PENALTY U/S 271(1)(C) AMOUNTING TO RS. 2 82 990 /- IMPOSED BY THE ASSESSING OFFICER ON ACCOUNT OF FURNISHING INACCURA TE PARTICULARS OF INCOME. 2 THAT THE ORDER OF THE LD. CIT(A)-II BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR UNDER APPEAL O N 31.10.2005 RETURNING NET LOSS AT RS. 27 203/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. THE ASSESSEE HAD THREE UNITS NAMELY DELHI UNIT S ECUNDERABAD UNIT AND DUBAI UNIT OUT OF WHICH EXEMPTION U/S 10A WAS CLAIM ED IN RESPECT OF INCOME OF DELHI UNIT AND SECUNDERABAD UNIT AS THEY WERE RE GISTERED AS STPI UNITS. THE CLAIM FOR EXEMPTION U/S 10A IN RESPECT OF INCOM E OF DELHI UNIT AND SECUNDERABAD UNIT WAS DULY SUPPORTED BY AUDIT REPOR T IN FORM NO. 56F. WHILE THE ASSESSEE HAD EARNED INCOME IN RESPECT OF DELHI UNIT AND SECUNDERABAD UNIT IT HAD SUFFERED LOSS IN ITS DUBAI UNIT. SINCE INCOME OF DELHI UNIT AND SECUNDERABAD UNIT WAS EXEMPT U/S 10A THE ASSESSEE SOUGHT TO ADJUST THE LOSS SUFFERED IN DUBAI UNIT AGAINST MISCELLANEOUS I NCOME. THE ASSESSING OFFICER HOWEVER TREATED THE DUBAI UNIT AS PART OF S ECUNDERABAD UNIT AND 700/CHANDI/10 2 CONSEQUENTLY ADJUSTED THE LOSS SHOWN BY THE ASSESSE E IN DUBAI UNIT AGAINST EXEMPTED PROFITS OF SECUNDERABAD UNIT. THE AFORESAI D ACTION OF THE ASSESSING OFFICER WAS NOT CHALLENGED BY THE ASSESSEE BEFORE A NY AUTHORITY. IN OTHER WORDS THE ACTION OF THE ASSESSING OFFICER IN TREAT ING THE DUBAI UNIT AS BRANCH OF SECUNDERABAD UNIT AND CONSEQUENTLY HIS FURTHER A CTION OF SETTING OF LOSS OF DUBAI UNIT AGAINST THE PROFITS OF SECUNDERABAD UNIT WERE ACCEPTED BY THE ASSESSEE. IT IS WITH REFERENCE TO THE REJECTION OF THE AFORESAID CLAIM MADE BY THE ASSESSEE THAT THE IMPUGNED PENALTY HAS BEEN LEV IED BY THE ASSESSING OFFICER U/S 271(1)(C) OF INCOME-TAX ACT. 3. AGGRIEVED BY THE ORDER PASSED BY THE ASSESSING O FFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) UPON WHICH THE LD. CIT(A) CANCELLED THE PENALTY FOR THE REASONS GIVEN BY HIM IN HIS APPELLATE ORDER. AGGRIEVED BY HIS ORDER THE DEPARTMENT IS NOW IN AP PEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF APPEAL THE LD. DR SUPPORTED THE ORDE R PASSED BY THE ASSESSING OFFICER AND SUBMITTED THAT THE ACTION OF THE ASSESS ING OFFICER WAS IN CONFORMITY WITH THE JUDGMENT IN K.C. BUILDERS V. AS SISTANT CIT 265 ITR 562 (S.C); A.M. SHAH AND CO. V CIT 108 TAXMAN 137 (GUJ ); AND CIT V. CHANDI PRASAD KHETAN 120 ITR 314 (RAJ). 4. IN REPLY THE LEARNED AUTHORIZED REPRESENTATIVE F OR THE ASSESSEE SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). HE CI TED AS MANY AS 27 AUTHORITIES TO SUPPORT THE ORDER PASSED BY THE LD. CIT(A). 5. I HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS INCLUDING AUTHORITIES REFERRED TO BY TH EM. THE SHORT ISSUE IS WHETHER MERE REJECTION OF CLAIM BY THE ASSESSING OF FICER ON THE FACTS OF THE CASE WOULD JUSTIFY LEVY OF PENALTY U/S 271(1)(C). IN MY VIEW MERE REJECTION OF CLAIM MADE BY THE ASSESSEE DOES NOT JUSTIFY THE LEV Y OF PENALTY. THE CLAIM OF THE ASSESSEE WAS SUPPORTED BY AUDIT REPORT IN FORM NO. 56A. THE ASSESSEE HAD ALSO MADE FULL AND TRUE DISCLOSURE OF FACTS MAT ERIAL TO THE COMPUTATION OF ITS INCOME. THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE HAD ACTED MALA FIDE IN MAKING THE CLAIM FOR SET-OFF OF LOSS S UFFERED IN DUBAI UNIT. ON THE FACTS OF THE CASE THE LD. CIT(A) HAS RIGHTLY CANCE LLED THE PENALTY LEVIED BY 700/CHANDI/10 3 THE ASSESSING OFFICER. HIS ORDER IS THEREFORE CON FIRMED. THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED ON 31 ST DECEMBER 2010 (D K SRIVASTAVA) ACCOUNTANT MEMBER CHANDIGARH THE 31 ST DECEMBER 2010 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR