The ACIT,(OSD)Range-4,, Ahmedabad v. Lincoln Pharmaceuticals Ltd.,, Ahmedabad

ITA 2690/AHD/2010 | 2004-2005
Pronouncement Date: 10-10-2013 | Result: Dismissed

Appeal Details

RSA Number 269020514 RSA 2010
Assessee PAN AAACL2711N
Bench Ahmedabad
Appeal Number ITA 2690/AHD/2010
Duration Of Justice 3 year(s) 25 day(s)
Appellant The ACIT,(OSD)Range-4,, Ahmedabad
Respondent Lincoln Pharmaceuticals Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 10-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 10-10-2013
Date Of Final Hearing 08-10-2013
Next Hearing Date 08-10-2013
Assessment Year 2004-2005
Appeal Filed On 15-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI N.S. SAINA ACCOUNTANT MEMBER ITA NO.2690 & 2691/AHD/2010 A.Y. 2004-05 & 2005-06 THE ACIT (OSD)-I RANGE-4 AHMEDABAD VS LINCOLN PHARMACEUTICALS LTD. 2 ND FLOOR NIRAV COMPLEX NARANPURA AHMEDABAD. PAN: AAACL2711N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI J.P. JHANGID SR.D.R. ASSESSEE(S) BY : SHRI A.C. SHAH / DATE OF HEARING : 08/10/2013 / DATE OF PRONOUNCEMENT: 10/10/2013 / O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THESE APPEALS HAVE BEEN FILED BY THE REVENUE ARISIN G FROM THE ORDER OF LEARNED CIT(A)-XX AHMEDABAD BOTH DATED 0 9.07.2010 PERTAINING TO A.YS. 2004-05 AND 2005-06. FOR BOTH T HE YEARS THE REVENUE DEPARTMENT HAS RAISED IDENTICALLY WORDED GR OUNDS AS REPRODUCED BELOW: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE PENALTY OF RS.6 06 123/- LEVIED BY THE AO U/S. 271(1)(C) OF TH E ACT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE CLAIM U/S. 80IB HAS BEEN REDUCED BY THE AO AS THE ASSESSEE HAD ADOPTED WRONG COMPUTATION OF DEDUCTION U/S.80IB BY INCLUDING DEPB AND TRADING INCOME IN SUCH PROFITS IN SPITE OF THE FACT THAT ONLY INCOME OUT OF MANUFACTURING ACTIVITY IS ELIGIBLE FOR SUCH DEDUCTI ON. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THERE WAS AN EXCESSIVE CLAIM FOR DEDUCTION U/S .80IB AND THE ASSESSEE ITA NO.2690 & 2691/AHD/2010 ACIT AHMEDABAD VS. LINCOLN PHARMACEUTICALS LTD.. FOR A.YS. 2004-05 & 2005-06 - 2 - FURNISHED WRONG PARTICULARS OF INCOME FOR WHICH LEV Y OF PENALTY WAS JUSTIFIED. 2. ON PERUSAL OF THE PENALTY ORDER U/S.271(1)(C) W E HAVE NOTED THAT THE CLAIM OF DEDUCTION U/S.80IB WAS REDUCED BY THE AO. THE AO HAS NOT GRANTED THE DEDUCTION U/S.80IB ON THE AMOUNT OF DEP B AND THE AMOUNT OF TRADING PROFIT. THAT ACTION OF THE AO OF REDUC TION U/S.80IB CLAIM WAS NOT CONTESTED BY THE ASSESSEE. THEREUPON THE P ENALTY U/S. 271(1)(C) WAS INVOKED PRIMARILY ASSIGNING THE REASON THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS IN RESPECT OF CLAI M OF DEDUCTION U/S.80IB OF IT ACT THEREFORE LIABLE FOR PENALTY U/S. 271(1 )(C) OF IT ACT. 3. WITH THIS BRIEF FACTUAL BACKGROUND WE HAVE HEAR D THE SUBMISSIONS OF BOTH THE SIDES. THIS IS NOT A CASE WHERE A FALSE CLAIM WAS NOTED BY THE REVENUE DEPARTMENT. IT COULD HAVE BEEN A WRONG CLAI M IN RESPECT OF DEPB AMOUNT AND TRADING PROFIT AMOUNT. BUT THAT CLA IM OR THE AMOUNT IN QUESTION WAS NOT HELD BY THE REVENUE DEPARTMENT AS NON-GENUINE OR AN UNTRUE CLAIM. THERE IS NO ALLEGATION OF FALSITY ON THE PART OF THE ASSESSEE. RATHER THE CONTENTION OF THE ASSESSEE IS COVERED B Y EXPLANATION 1 TO SECTION 271(1)(C) OF IT ACT WHICH PRESCRIBES THAT I N RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF INCOME THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION OR THE EXPLANATION OFFERED WAS FOUND BY THE AO TO BE FALSE THEN PENALTY CAN BE LEVIED. WE HAVE NOTED THAT THE ASSESSEE HAD OFFERED AN EXPLANATION AND THAT EXPLANATION WAS NOT FOUND T O BE FALSE BUT THE ASSESSEE WAS ABLE TO SUBSTANTIATE THE EXPLANATION S O OFFERED. BECAUSE OF THESE REASONS WE HEREBY HOLD THAT THE QUESTION OF LEVY OF PENALTY IS TO BE DECIDED IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF BTX CHEMICALS P. LTD. V/S. CIT AS ITA NO.2690 & 2691/AHD/2010 ACIT AHMEDABAD VS. LINCOLN PHARMACEUTICALS LTD.. FOR A.YS. 2004-05 & 2005-06 - 3 - REPORTED IN 288 ITR 196 AND HONBLE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS AS REPORTED IN 322 ITR 158 . THEREFORE THE GROUNDS OF THE REVENUE ARE DISMISSED. 5. IN THE RESULT THE APPEALS OF THE REVENUE ARE DI SMISSED. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 10/10/2013 PRABHAT KR. KESARWANI SR. P.S. TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III AHMEDABAD 5. / DR ITAT AHMEDABAD 6. / GUARD FILE. / BY ORDER / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD