The ACIT,(OSD)-I,Range-4,, Ahmedabad v. Jay Chemical Industies Ltd.,, Ahmedabad

ITA 2342/AHD/2010 | 2005-2006
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 234220514 RSA 2010
Assessee PAN AAACJ7628J
Bench Ahmedabad
Appeal Number ITA 2342/AHD/2010
Duration Of Justice 6 month(s) 5 day(s)
Appellant The ACIT,(OSD)-I,Range-4,, Ahmedabad
Respondent Jay Chemical Industies Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 21-01-2011
Date Of Final Hearing 07-01-2011
Next Hearing Date 07-01-2011
Assessment Year 2005-2006
Appeal Filed On 16-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI A.N. PAHUJA ACCOUNTANT MEMBER DATE OF HEARING : 07/1/2011 DRAFTED ON: 11 /01/2011 ITA NO.2342/AHD/2010 ASSESSMENT YEAR : 2005-06 THE ACIT (OSD)-I RANGE-4 AHMEDABAD VS. JAY CHEMICAL INDS. LTD. JAY HOUSE PANCHVATI CIRCLE AMBAWADI AHMEDABAD PAN/GIR NO. : AAACJ 7628 J ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI RAJDEEP SINGH SR. D.R. RESPONDENT BY: SHRI NIMISH VAYAWALA O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XX AHMEDABA D DATED 05/04/2010 PASSED FOR ASSESSMENT YEAR 2005-06 AGAIN ST THE DELETION OF PENALTY LEVIED U/S.271(1)(C) OF THE I.T.ACT OF RS.5 08 429/-. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING PENALTY ORDER PASSED U/S.271(1)(C) OF THE I.T. ACT 1961 DATED 30 /03/2009 AND ASSESSMENT ORDER MADE U/S.143(3) DATED 31/12/2007 W ERE THAT THE ASSESSEE-COMPANY IS IN THE BUSINESS OF MANUFACTURI NG AND EXPORT OF DYES AND CHEMICALS. THERE WERE TWO ADDITIONS WHICH WERE CONFIRMED ITA NO. 2342/AHD/2010 THE ACIT VS. JAY CHEMICAL INDS. LTD. ASST.YEAR - 2005-06 - 2 - BY THE APPELLATE AUTHORITY AND THOSE ADDITIONS WER E THE BASIS FOR LEVY OF PENALTY AS UNDER: (I) DISALLOWANCE OUT OF FOREIGN TRAVEL EXPENSES RS. 3 00 000/- (II) DISALLOWANCE OF DEPRECIATION RS.11 10 673/- 3. IN RESPECT OF DISALLOWANCE OF FOREIGN TRAVEL I T WAS INFORMED TO LEARNED CIT(APPEALS) THAT THE DETAILS WERE ON RECOR D AND THE DIRECTORS HAD TO UNDERTAKE TOURS AND TRAVELS SOMETIMES ALONG WITH THE SPOUSE. THE ASSESSING OFFICER HAS DISALLOWED AN ADHOC AMOUNT WH ICH WAS ALSO REDUCED ON ESTIMATE BASIS BY THE FIRST APPELLATE AU THORITY. BECAUSE OF THESE REASONS THE LEARNED CIT(APPEALS) HAS CONCLUD ED THAT SINCE THE FACTS WERE ALREADY ON RECORD AND THE ASSESSING OFFI CER HAD NOT BROUGHT ON RECORD THAT THE EXPLANATION OFFERED BY THE ASSES SEE WAS FALSE THEREFORE THE PENALTY IN RESPECT OF DISALLOWANCE O F FOREIGN TRAVEL WAS HELD AS NOT SUSTAINABLE. AFTER HEARING THE SUBMISS IONS OF BOTH THE SIDES AND IN THE LIGHT OF THE COMPILATION FILED BEFORE US WE ARE OF THE VIEW THAT THE LEARNED CIT(APPEALS) HAS RIGHTLY REVERSED THE O RDER OF A.O. SPECIALLY WHEN THE HON'BLE SUPREME COURT HAS HELD I N THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. REPORTED AT [2010] 322 ITR 158 (SC) THAT A PENALTY CANNOT BE IMPOSED MERELY BECAUSE A C LAIM HAS BEEN DISALLOWED. 4. AS REGARDS DISALLOWANCE OF DEPRECIATION IT WAS EXPLAINED TO LEARNED CIT(APPEALS) THAT FOR THE YEAR UNDER CONSID ERATION A DEPRECIATION WAS COMPUTED HOWEVER THROUGH OVERSIG HT THE ADDITIONAL DEPRECIATION WHICH WAS ALLOWED IN THE IMMEDIATELY P RECEDING YEAR WAS ITA NO. 2342/AHD/2010 THE ACIT VS. JAY CHEMICAL INDS. LTD. ASST.YEAR - 2005-06 - 3 - NOT REDUCED. WHEN THIS FACT WAS CAME TO THE NOTICE OF THE ASSESSEE IMMEDIATELY THEREAFTER A REVISED WORKING OF DEPRECI ATION WAS FURNISHED BEFORE THE ASSESSING OFFICER. THE LEARNED CIT(APPE ALS) HAS HELD THAT THE BOOKS OF ACCOUNT HAVE DULY BEEN AUDITED BY THE CHARTERED ACCOUNTANT AND FACTS ABOUT THE DEPRECIATION WERE ON RECORD AND NO FACT ABOUT CORRECTNESS OF THE CLAIM OF DEPRECIATION WAS CONCEALED BY THE ASSESSEE BUT DURING THE COURSE OF ASSESSMENT PROCE EDINGS THE SAID MISTAKE WAS CORRECTED HENCE IT WAS NOT A CASE OF EITHER FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. N OW BEFORE US IN ADDITION TO THE DECISION OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. REPORTED AT [2010] 322 ITR 158 (SC) FEW OTHER DECI SIONS HAVE ALSO BEEN CITED; NAMELY ACIT VS. RAJ MULTIPLEX PVT.LTD. 06 I TR 76 (TRIBUNAL)[AHD.] YOGESH R.DESAI VS. ACIT 38 DTR 1 01 (TRIBUNAL)[MUM.] CIT VS. UNION ELECTRIC CORP. 281 ITR 266(GUJ.) ETC. RELYING UPON THESE DECISIONS AND CONSIDERING THE TO TALITY OF THE CIRCUMSTANCES OF THE CASE WE HEREBY UPHELD THE VI EW TAKEN BY THE LEARNED CIT(APPEALS). GROUNDS RAISED BY THE REVENU E ARE DISMISSED. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 21/ 01 /2011. SD/- SD/- ( A.N. PAHUJA ) ( MU KUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 21/ 01 /2011 T.C. NAIR SR. PS ITA NO. 2342/AHD/2010 THE ACIT VS. JAY CHEMICAL INDS. LTD. ASST.YEAR - 2005-06 - 4 - COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XX AHMEDABAD 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD 1. DATE OF DICTATION.. 11.1.11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11.1.11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S21.1.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21.1.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER