The ACIT,(OSD)Range-1,, Ahmedabad v. M/s. CLP Power India Pvt. Ltd.,, Ahmedabad

ITA 208/AHD/2014 | 2005-2006
Pronouncement Date: 28-10-2016 | Result: Dismissed

Appeal Details

RSA Number 20820514 RSA 2014
Assessee PAN AAACP6900B
Bench Ahmedabad
Appeal Number ITA 208/AHD/2014
Duration Of Justice 2 year(s) 9 month(s) 7 day(s)
Appellant The ACIT,(OSD)Range-1,, Ahmedabad
Respondent M/s. CLP Power India Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 28-10-2016
Date Of Final Hearing 31-08-2016
Next Hearing Date 31-08-2016
Assessment Year 2005-2006
Appeal Filed On 21-01-2014
Judgment Text
I.T.A. NO. 208 /AHD/201 4 & C.O. NO.121/AHD/2014 ASSESSMENT YEAR: 200 5 - 06 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM ] I.T.A. NO. 208 /AHD/201 4 ASSESSMENT YEAR: 20 0 5 - 06 AS STT. COMMISSIONER OF INCOME TAX (OSD) RANGE - 1 AHMEDABAD . . . APPELLANT VS. CLP POWER INDIA PVT . LTD. ...... ... .. RESPONDENT 6 TH FLOOR CHANAKYA BUILDING OFF. ASHRAM ROAD AHMEDABAD. [PAN: AA ACP 6900 B ] C.O. NO.121/AHD/2014 (IN I.T.A. NO. 208/AHD/2014) ASSESSMENT YEAR: 2005 - 06 CLP POWER INDIA PVT. LTD. ...... ... .. APPELLANT 6 TH FLOOR CHANAKYA BUILDING OFF. ASHRAM ROAD AHMEDABAD. [PAN: AAACP 6900 B] VS. ASSTT. COMMISSIONER OF INCOME TAX (OSD) RANGE - 1 AHMEDABAD . . . RESPONDENT APPEARANCES BY: PRASOON KABRA FOR THE REVENUE P.M. MEHTA WITH GULAB M. THAKKAR FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : 31 .0 8 .2016 DATE OF PRONOUNC ING THE ORDER : 28 .1 0.2016 O R D E R PER PRAMOD KUMAR AM : I.T.A. NO. 208 /AHD/201 4 & C.O. NO.121/AHD/2014 ASSESSMENT YEAR: 200 5 - 06 PAGE 2 OF 4 1. BY WAY OF THIS APPEAL THE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 11 TH NOVEMBER 2013 PASSED BY THE CIT(A) IN THE MATTER OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2005 - 06. 2. GRIEVANCES OF THE APPELLANT ARE AS FOLLOWS: (1) THE CIT(A) HAS ERRED IN LAW AND ON F ACTS BY DELETING THE PENALTY OF RS.17.61 LACS LEVIED U/S 271(L)(C) ON THE GROUND THAT THERE IS NO CHANGE IN THE RETURNED INCOME AND ASSESSED INCOME. (2) THE CIT(A) HAS NOT APPRECIATED THE FACT THAT THE ASSESSED INCOME HAD R EMAINED NIL DUE TO SET - OF F OF UNABSORBED DEPRECIATION. HENCE TAX ON THE ADDITION MADE IS TO BE REGARDED AS TAX SOUGHT TO BE EVADED AS PER EXPLANATION 4(A) TO SECTION 271(1) OF THE ACT. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) OUGHT TO HAVE UPHEL D THE ORDER OF THE ASSESSING OFFICER TO THE EXTENT MENTIONED ABOVE SINCE THE ASSESSEE HAS FAILED TO DISCLOSE HIS TRUE INCOME/BOOK PROFIT. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED TO THE ABOVE EXTENT. THE APPELLANT CRAVES TO LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3. TO ADJUDICATE ON THIS APPEAL IT IS SUFFICIENT TO TAKE NOTE OF THE FACT THAT IN THE PRESENT CASE THE ASSESSMENT IS ON THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT AND YET THE ASSESSING OFFICER HAS IMPOSED PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF QUANTUM DISALLOWANCES OF RS 3 98 124 OUT OF REPAIRS TO BUILDING AND RS 44 14 734 OUT OF LEGAL AND PROFESSIONAL FEES IN THE NORMAL INCOME. ON THESE FACTS WHEN MATTER TRAVELLED IN APPEAL BEFORE THE CIT(A) LEARNED CIT(A) DELETED THE DISALLOWANCE ON THE GROUND THAT IN THE LIGHT OF HON BLE DELHI HIGH COURT S JUDGMENT IN THE CASE OF CIT VS NALWA SONS INVESTMENTS PVT LTD (327 ITR 543) WHEN RETURNED INCOME AS ALSO THE ASSESSED INCOME EVEN AFTER THE DISALLOWANCES IN QUESTION IS NIL PENALTY UNDER I.T.A. NO. 208 /AHD/201 4 & C.O. NO.121/AHD/2014 ASSESSMENT YEAR: 200 5 - 06 PAGE 3 OF 4 SECTION 271(1)(C) CANNOT BE IMPOSED. THE ASSESSING OFFICER IS AGGRIEVED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONT ENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. AS LEARNED CIT(A) RIGHTLY NOTES THE ISSUES IS COVERED IN FAVOUR OF THE ASSESSEE BY HON BLE DELHI HIGH COURT S DECISION IN THE CASE OF NALWA SONS (SUPRA) WHEREIN THEIR LORDSHIPS HAVE INTER ALIA OBSERVED AS FOLLOWS: 21. THE QUESTION HOWEVER IN THE PRESENT CASE WOULD BE AS TO WHETHER FURNISHING OF SUCH WRONG PARTICULARS HAD ANY THE EFFECT ON THE AMOUNT OF TAX SOUGHT TO BE EVA DED. UNDER THE SCHEME OF THE ACT THE TOTAL INCOME OF THE ASSESSEE IS FIRST COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT AND TAX PAYABLE ON SUCH TOTAL INCOME IS COMPARED WITH THE PRESCRIBED PERCENTAGE OF THE BOOK PROFITS COMPUTED UNDER SECTION 115JB O F THE ACT. THE HIGHER OF THE TWO AMOUNTS IS REGARDED AS TOTAL INCOME AND TAX IS PAYABLE WITH REFERENCE TO SUCH TOTAL INCOME. IF THE TAX PAYABLE UNDER THE NORMAL PROVISIONS IS HIGHER SUCH AMOUNT IS THE TOTAL INCOME OF THE ASSESSEE OTHERWISE BOOK PROFITS ARE DEEMED AS THE TOTAL INCOME OF THE APPELLANT IN TERMS OF SECTION 115JB OF THE ACT. 22. IN THE PRESENT CASE THE INCOME COMPUTED AS PER THE NORMAL PROCEDURE WAS LESS THAN THE INCOME DETERMINED BY LEGAL FICTION NAMELY BOOK PROFITS UNDER SECTION 115JB OF THE ACT. ON THE BASIS OF NORMAL PROVISION THE INCOME WAS ASSESSED IN THE NEGATIVE I.E. AT A LOSS OF RS. 36 95 21 018. ON THE OTHER HAND ASSESSMENT UNDER SECTION 115JB OF THE ACT RESULTED IN CALCULATION OF PROFITS AT RS. 4 01 63 180. 23. IN VIEW THERE OF IN CONCLUSION THE ASSESSMENT ORDER RECORDS AS FOLLOWS: ASSESSED AT RS. 4 01 63 180 UNDER SECTION 115JB BEING HIGHER OF TWO. INTEREST UNDER SECTION 234B AND 234C HAS BEEN CHARGED AS PER THE PROVISIONS OF INCOME - TAX ACT 1961. PENALTY PROCEEDINGS UND ER SECTION 271(1)(C) OF THE INCOME - TAX ACT 1961 HAVE BEEN INITIATED. ISSUE NECESSARY FORMS. 24. THE INCOME OF THE ASSESSEE WAS THUS ASSESSED UNDER SECTION 115JB AND NOT UNDER THE NORMAL PROVISIONS. IT IS IN THIS CONTEXT THAT WE HAVE TO SEE AND EXAMINE TH E APPLICATION OF EXPLANATION 4. 25. JUDGMENT IN THE CASE OF GOLD COIN HEALTH FOOD (P.) LTD. (SUPRA) OBVIOUSLY DOES NOT DEAL WITH SUCH A SITUATION. WHAT IS HELD BY THE SUPREME COURT IN THAT CASE IS THAT EVEN IF IN THE INCOME - TAX RETURN FILED BY THE ASSESS EE LOSSES ARE SHOWN PENALTY CAN STILL BE IMPOSED IN A CASE WHERE ON SETTING OFF THE CONCEALED I.T.A. NO. 208 /AHD/201 4 & C.O. NO.121/AHD/2014 ASSESSMENT YEAR: 200 5 - 06 PAGE 4 OF 4 INCOME AGAINST ANY LOSS INCURRED BY THE ASSESSEE UNDER OTHER HEAD OF INCOME OR BROUGHT FORWARD FROM EARLIER YEARS THE TOTAL INCOME IS REDUCED TO A FIGURE LOWER THAN THE CONCEALED INCOME OR EVEN A MINUS FIGURE. THE COURT WAS OF THE OPINION THAT THE TAX SOUGHT TO BE EVADED WILL MEAN THE TAX CHARGEABLE NOT AS IF IT WERE THE TOTAL INCOME. ONCE WE APPLY THIS RATIONALE TO EXPLANATION 4 GIVEN BY THE SUPREME COURT IN THE PRESENT CASE IT WILL BE DIFFICULT TO SUSTAIN THE PENALTY PROCEEDINGS. REASON IS SIMPLE. NO DOUBT THERE WAS CONCEALMENT BUT THAT HAD ITS REPERCUSSIONS ONLY WHEN THE ASSESSMENT WAS DONE UNDER THE NORMAL PROCEDURE. THE ASSESSMENT AS PER THE NORMAL PROC EDURE WAS HOWEVER NOT ACTED UPON. ON THE CONTRARY IT IS THE DEEMED INCOME ASSESSED UNDER SECTION 115JB OF THE ACT WHICH HAS BECOME THE BASIS OF ASSESSMENT AS IT WAS HIGHER OF THE TWO. TAX IS THUS PAID ON THE INCOME ASSESSED UNDER SECTION 115JB OF THE A CT. HENCE WHEN THE COMPUTATION WAS MADE UNDER SECTION 115JB OF THE ACT THE AFORESAID CONCEALMENT HAD NO ROLE TO PLAY AND WAS TOTALLY IRRELEVANT. THEREFORE THE CONCEALMENT DID NOT LEAD TO TAX EVASION AT ALL. 6. RESPECTFULLY FOLLOWING THE ABOVE LEGAL POSI TION WE UPHOLD THE RELIEF GRANTED BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 7. IN THE RESULT THE APPEAL OF THE ASSESSING OFFICER IS DISMISSED. 8. THE CROSS OBJECTION FILED BY THE ASSESSEE WAS NOT PRESSED AND IS ACCORDINGLY DISMISSED FOR WA NT OF PROSECUTION. 9. IN THE RESULT THE CO IS ALSO DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON 28 TH DAY OF OCTOBER 2016. SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 28 TH DAY OF OCTOBER 2016. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDA BAD