Alidhara Texpro Engineers Pvt.Ltd.,, Surat v. The Dy.CIT, Circle-1,, Surat

ITA 2404/AHD/2009 | 2004-2005
Pronouncement Date: 22-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 240420514 RSA 2009
Assessee PAN AACCA0256D
Bench Ahmedabad
Appeal Number ITA 2404/AHD/2009
Duration Of Justice 1 year(s) 11 month(s) 4 day(s)
Appellant Alidhara Texpro Engineers Pvt.Ltd.,, Surat
Respondent The Dy.CIT, Circle-1,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 22-07-2011
Date Of Final Hearing 07-07-2011
Next Hearing Date 07-07-2011
Assessment Year 2004-2005
Appeal Filed On 17-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND BHAVNESH SAINI JUDICIAL MEMBER) ITA NO.2404/AHD/2009 [ASSTT. YEAR : 2004-2005] ALIDHARA TEXPRO ENGINEERS P. LTD. PLOT NO.B-52 ROAD NO.3 UDYOGNAGAR UDHNA PAN : AACCA 0256 D VS. DCIT CIR.1 SURAT. ITA NO.2577/AHD/2009 [ASSTT. YEAR : 2004-2005] DCIT CIR.1 SURAT. VS. ALIDHARA TEXPRO ENGINEERS P. LTD. PLOT NO.B-52 ROAD NO.3 UDYOGNAGAR UDHNA (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HARDIK VORA REVENUE BY : SHRI S.K. MEENA O R D E R PER G.D. AGARWAL VICE-PRESIDENT : THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER O F LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-I SURAT DATED 14.07.2009 ARISING OUT OF THE ORDER OF THE AO UNDER SECTION 271(1)(C) 147 OF THE INCOME TAX ACT 1961. 2. THE ONLY GROUND RAISED IN BOTH THE CROSS APPEALS IS WITH REGARD TO PENALTY LEVIED UNDER SECTION 271(1)(C) WHICH IS PAR TLY SUSTAINED BY THE CIT(A). 3. THE FACTS OF THE CASE ARE THAT THE AO LEVIED PEN ALTY OF RS.10 11 957/-. THE PENALTY WAS LEVIED IN RESPECT OF THE FOLLOWING ADDITIONS: ITA NO.2404 AND 2577/AHD/2009 -2- I) ADDITION ON ACCOUNT OF LOW GP. THE ADDITION WA S MADE OF RS.67 53 842/- BUT THE CIT(A) HAS RESTRICTED THE AD DITION OF RS.24.2 LACS VIDE HIS ORDER DATED 19.07.2007. II) DISALLOWANCE OF DEDUCTION U/S.80IB OF OTHER INC OME TO THE EXTENT OF RS.82 689/- III) DISALLOWANCE OF DEDUCTION U/S.80IB DUE TO NON- CLAIM OF DEPRECIATION OF RS.3 06 294/- IV) ADDITION ON ACCOUNT OF INTEREST OF RS.11 409/- 4. THE CIT(A) DELETED THE PENALTY IN RESPECT OF GP ADDITION AND SUSTAINED IN RESPECT OF REMAINING ADDITION/DISALLOW ANCE. THE REVENUE AGGRIEVED WITH THE REDUCTION IN THE PENALTY IS IN A PPEAL WHILE THE ASSESSEE IS IN APPEAL AGAINST THE CONFIRMATION OF THE PART O F THE PENALTY. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WITH REGARD TO GP ADDITION IT WAS POIN TED OUT BY THE LEARNED COUNSEL THAT THE ADDITION HAS BEEN DELETED BY THE I TAT IN QUANTUM APPEAL VIDE ORDER IN ITA NO.3591/AHD/2007. COPY OF THE OR DER IS FURNISHED BEFORE US. SINCE THE ADDITION ITSELF HAS BEEN DELE TED THE PENALTY BASED UPON SUCH ADDITION CANNOT SURVIVE. WE THEREFORE UP HOLD THE ORDER OF THE CIT(A) ON THIS POINT AND CONSEQUENTIALLY THE DEPAR TMENTS APPEAL IS DISMISSED. 6. WITH REGARD TO THE CLAIM OF 80IB ON OTHER INCOME IT WAS POINTED OUT BY THE LEARNED COUNSEL THAT THE ASSESSEE DID NO T CHALLENGE THE DISALLOWANCE. HE HOWEVER STATED THAT WHETHER THE A SSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80IB IN RESPECT OF OTHER IN COME IS DEBATABLE ISSUE AND THE ASSESSEE HAS DULY FURNISHED ALL THE R ELEVANT FACTS IN THIS REGARD. THEREFORE THOUGH THE DISALLOWANCE OF DEDU CTION UNDER SECTION ITA NO.2404 AND 2577/AHD/2009 -3- 80IB IN RESPECT OF OTHER INCOME IS SUSTAINED HOWEV ER THE SAME WOULD NOT BE LIABLE FOR PENALTY UNDER SECTION 271(1)(C) O F THE ACT. IN SUPPORT OF THIS CONTENTION HE RELIED UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD . 322 ITR 158 (SC). THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND HE HAS STATED THAT TO THE EXT ENT THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IB IN RESPECT OF OTHER IN COME IT AMOUNTS TO FURNISHING OF INACCURATE PARTIES. THEREFORE THE PENALTY IS RIGHTLY SUSTAINED BY THE CIT(A). 7. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THA T THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 (SC) WHEREIN THEIR LORDSHIP HELD AS UNDER: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD 'PARTICULARS' USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PEN ALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROV ISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT C LAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. (EMPHASIS ADDED) THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FU RNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACC URATE THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO TH E TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THE RE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO F URNISHING INACCURATE ITA NO.2404 AND 2577/AHD/2009 -4- PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTI CULARS. FROM THE ABOVE IT IS EVIDENT THAT THEIR LORDSHIPS H AVE CLEARLY LAID DOWN THAT MERELY AN INCORRECT CLAIM WAS MADE BY THE ASSE SSEE IT WOULD NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS SO AS TO MAKE THE ASSESSEE LIABLE FOR PENALTY UNDER SECTION 271(1)(C . IN THE PRESENT CASE THERE IS NO DISPUTE THAT ALL THE FACTS HAVE BEEN DI SCLOSED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND THE ONLY DIS PUTE IS WITH REGARD TO COMPUTATION OF QUANTUM OF DEDUCTION UNDER SECTION 8 0IB. WHILE CLAIMING THE DEDUCTION THE ASSESSEE HAS TAKEN ONE V IEW AND THE DEPARTMENT HAS TAKEN ANOTHER VIEW. THIS WILL NOT A MOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF THE INACCURATE PARTICULA RS. IT IS SETTLED PROPOSITION OF THE LAW THAT A MISCONCEIVED OR WRONG CLAIM FOR DEDUCTION OR EXEMPTION DOES NOT AUTOMATICALLY ATTRACT PENALTY UNDER SECTION 271(1)(C). THEREFORE IN SUCH SITUATION NO PENALTY CAN BE LEVIED UNDER SECTION 271(1)(C). IN VIEW OF THE ABOVE WE RESPE CTFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS LTD. (SUPRA) UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND DISMISS THE APPEAL OF THE REVENUE. 8. WITH REGARD TO DISALLOWANCE OF DEDUCTION UNDER S ECTION 80IB DUE TO NON-CLAIM OF DEPRECIATION IT WAS POINTED OUT BY THE LEARNED COUNSEL THAT THE ISSUE HAS BEEN RESTORED BACK TO THE FILE O F THE AO BY THE ITAT IN QUANTUM APPEAL VIDE ITA NO.353591/AHD/2007. SINCE THE ADDITION HAS BEEN SET ASIDE THE PENALTY BASED UPON SUCH ADDITIO N CANNOT SURVIVE. MOREOVER WHILE ADJUDICATING THE DISALLOWANCE UNDER SECTION 80IB IN RESPECT OF OTHER INCOME RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRO DUCTS PVT. LTD. ITA NO.2404 AND 2577/AHD/2009 -5- (SUPRA). WE HAVE ALREADY HELD THAT PENALTY UNDER S ECTION 271(1)(C) CANNOT BE LEVIED MERELY BECAUSE THE ASSESSEE MADE A WRONG CLAIM OF DEDUCTION. SO FAR AS THE 80IB IS CONCERNED IT IS NOT EVEN THE WRONG CLAIM OF DEDUCTION BECAUSE THE AO HAS ALSO ALLOWED DEDUC TION UNDER SECTION 80IB. HE ONLY RE-COMPUTED QUANTUM OF DEDUCTION OF THE CLAIM MADE BY THE ASSESSEE. IT IS NOT IN DISPUTE THAT ALL THE RE LEVANT FACTS IN RESPECT OF DEDUCTION CLAIMED UNDER SECTION 80IB WERE DULY FURN ISHED BY THE ASSESSEE. THERE IS NO ALLEGATION OF NON-DISCLOSURE OF ANY RELEVANT FACTS OR INCORRECT FURNISHING OF THE ANY FACTUAL DETAILS. I N VIEW OF THE ABOVE WE ARE OF THE OPINION THAT THE LEVY OF PENALTY UNDER S ECTION 271(1)(C) FOR THE REDUCTION IN THE QUANTUM OF DEDUCTION CLAIMED UNDER SECTION 80IB BY THE ASSESSEE DOES NOT AMOUNT TO CONCEALMENT OF INCOME. 9. WITH REGARD TO ADDITION ON ACCOUNT OF INTEREST I NCOME AMOUNTING TO RS.11 409/- THE LEARNED COUNSEL FAIRLY ADMITTED TH AT THE ASSESSEE OMITTED TO DISCLOSE THE INTEREST INCOME ON FDR. IN OUR OPI NION NON-DISCLOSURE OF INTEREST INCOME CLEARLY AMOUNT TO CONCEALMENT OF IN COME. ACCORDINGLY PENALTY FOR NON-DISCLOSURE OF INTEREST INCOME AMOUN TING TO RS.11 409/- WAS RIGHTLY SUSTAINED BY THE CIT(A). IN VIEW OF TH E ABOVE WE PARTLY MODIFY THE ORDER OF THE CIT(A) AND DIRECT THE AO TO COMPUTE MINIMUM PENALTY FOR NON-DISCLOSURE OF INTEREST INCOME AMOUN TING TO RS.11 409/-. 10. IN THE RESULT REVENUES APPEAL IS DISMISSED WH ILE THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 22 ND JULY 2011 SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT