The ACIT.(OSD),-I,Range-4,, Ahmedabad v. M/s. Modern Construction Co.P.Ltd.,, Ahmedabad

ITA 2874/AHD/2011 | 2003-2004
Pronouncement Date: 24-04-2015 | Result: Dismissed

Appeal Details

RSA Number 287420514 RSA 2011
Assessee PAN AAACM5823E
Bench Ahmedabad
Appeal Number ITA 2874/AHD/2011
Duration Of Justice 3 year(s) 5 month(s) 6 day(s)
Appellant The ACIT.(OSD),-I,Range-4,, Ahmedabad
Respondent M/s. Modern Construction Co.P.Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 24-04-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 24-04-2015
Date Of Final Hearing 30-03-2015
Next Hearing Date 30-03-2015
Assessment Year 2003-2004
Appeal Filed On 18-11-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI RAJPAL YADAV J.M. & SHRI ANIL CHATURV EDI A.M.) I.T. A. NO. 2874/AHD/2011 (ASSESSMENT YEAR: 2003-04) THE ACIT (OSD)-1 RANGE- 4 AHMEDABAD V/S MODERN CONSTRUCTION CO. PVT. LTD. 5 TH FLOOR H.K. HOUSE ASHRAM ROAD AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACM 5823E APPELLANT BY : SHRI DINESH SINGH SR. D.R . RESPONDENT BY : SMT. ARATI N. SHAH. A.R. ( )/ ORDER DATE OF HEARING : 30-03-2015 DATE OF PRONOUNCEMENT : 24 -04-2015 PER SHRI ANIL CHATURVEDI A.M. 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-VIII AHMEDABAD DATED 22.09.2011 FOR A.Y. 2003-04. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE B USINESS OF CONSTRUCTION AND ENGINEERING. ASSESSEE FILED ITS RETURN OF INCOM E FOR A.Y. 2003-04 DECLARING INCOME OF RS. 47 150/-. THE RETURN OF INC OME WAS INITIALLY PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY THE CASE WAS RE-OPENED BY ISSUING NOTICE U/S. 148 OF THE ACT AND THEREAFTER T HE ASSESSMENT WAS FRAMED ITA NO 2874/ AHD/2011 . A.Y. 2003- 04 2 U/S. 143(3) R.W.S. 147 VIDE ORDER DATED 29.11.2006 AND THE TOTAL INCOME WAS DETERMINED AT RS. 1 51 88 800/- BY INTERALIA DENYIN G THE CLAIM OF DEDUCTION U/S. 80IA AND ALSO MAKING ADDITION ON ACCOUNT OF OT HER DISALLOWANCES. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED TH E MATTER BEFORE LD. CIT(A) WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE B Y DIRECTING THE A.O TO ALLOW DEDUCTION U/S. 80IA BUT HOWEVER UPHELD THE AC TION OF A.O. TO NOT TO ALLOW DEDUCTION U/S. 80IA ON OTHER INCOME OF RS. 33 19 275/-. WITH RESPECT TO THE DISALLOWANCE OF EXPENSES MADE BY A.O OF RS. 89 26 709/- LD. CIT(A) CONFIRMED THE DISALLOWANCE OF ONLY RS. 2 90 984/- AND DELETED THE ADDITION OF REST OF THE AMOUNT OF RS. 86 35 725/-. ON THE ADDITIONS WHICH WERE CONFIRMED BY CIT(A) A.O VIDE ORDER DATED 18.0 3.2010 LEVIED PENALTY OF RS. 14 15 481/- U/S. 271(1)(C) OF THE ACT ON ACC OUNT OF FURNISHING INACCURATE PARTICULARS OF INCOME. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 22.09.2011 GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE BY HOLDI NG AS UNDER:- 4.5.I HAVE CONSIDERED THE FACTS AND SUBMISSIONS OF THE LD. A.R. CAREFULLY. IT IS SEEN THAT THE A.O HAS LEVIED THE PENALTY IN RESPECT OF THE AMOUNT WHICH HAS BEEN FINALLY CONFIRMED BY THE LD. CIT(A) AS REFERRED TO ABOVE. THESE ADDITION S PERTAINED TO DISALLOWANCE OF DEDUCTION U/S 80IA OF THE ACT ON INTEREST AND OTHER INCOME AND UNACCOUNTED EXPENSES. AS REGARDS LEVY OF PENALTY IN RESPECT OF DISALLOWANCE CONFIRMED BY THE LD. CIT(A) I FIND FORCE IN THE ARGUMENT OF THE LD. A.R THAT THE LD. C IT(A) HAS ALLOWED THE DEDUCTION TO THE APPELLANT U/S 80IA IN PRINCIPLE HOWEVER HE HAS HE LD THAT SAME IS NOT ALLOWABLE IN RESPECT OF RECEIPT FROM INTEREST AND MISCELLANEOUS INCOME. FURTHER THE A.O WHILE LEVYING THE PENALTY IN RESPECT OF THE DISALLOWANCE OUT OF D EDUCTION CLAIMED U/S 80IA HAS NOT HELD THAT THE APPELLANT'S CLAIM FOR THE SAME WAS FALSE O R FABRICATED. IT HAS ALSO NOT BEEN POINTED OUT THAT APPELLANT DID NOT FILE COMPLETE DE TAILS WITH REGARD TO CLAIM FOR DEDUCTION U/S 80IA BEFORE THE A.O. 4.6.. 4.9 FURTHER IF WE TEST THE FACTS OF THE CASE ON THE TO UCHSTONE OF THE ABOVE REFERRED THREE INGREDIENTS OF EXPLANATION 1 TO SEC.271(1)(C) OF TH E ACT ALSO WE FIND THAT THE DISALLOWANCE MADE BY THE A.O. OUT OF DEDUCTION U/S 80IA AND CONFIRMED BY THE ID. CIT(A) DO NOT HIT BY ANY ONE OF THEM. 4.10 THE LD. CIT(A) WHILE CONFIRMING THE DISALLOWAN CE OUT OF DEDUCTION U/S 80IA HAS HELD THAT THE RECEIPTS FROM INTEREST MISCELLANEOUS RECEIPTS AND CONSULTANCY FEES ARE REQUIRED TO BE EXCLUDED FROM THE INCOME ELIGIBLE FO R DEDUCTION UNDER THE SECTION. ITA NO 2874/ AHD/2011 . A.Y. 2003- 04 3 HOWEVER WHILE DECIDING SO HE HAS NOT HELD THAT THE APPELLANTS CLAIM FOR DEDUCTION ITSELF IS FABRICATED AND FALSE. FURTHER THE A.O ALSO IN T HE PENALTY PROCEEDINGS ONLY LEVIED THE PENALTY IN RESPECT OF THE DISALLOWANCE SO CONFIRMED BY THE LD.CIT(A). HE HAS NOT BROUGHT ON RECORD ANY FACT TO SHOW THAT THE APPELLANT'S CLA IM FOR DEDUCTION WAS FALSE AND IT DID NOT BRING ALL THE FACTS RELATING TO SUCH CLAIM ON R ECORD. 4.11 THEREFORE IN THESE CIRCUMSTANCES THE LEVY OF PENALTY IN RESPECT OF THE DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S 80IA CANNOT BE SUSTAIN ED. HONBLE RAJASTHAN HIGH COURT IN THE CASE OF SHIV LAL TAK VS. CIT REPORTED IN 251 IT R 373 HAS HELD THAT: ' THE STATUTE HAS CLEARLY DRAWN A DISTINCTION BETWE EN A DELIBERATE FALSE EXPLANATION FURNISHED BY THE ASSESSEE AND AN EXPLANATION WHICH MAY NOT BE FALSE BUT IS NOT ACCEPTED BECAUSE THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE I T. WHILE THERE IS NO RELAXATION IN THE RIGOUR OF THE EXPLANATION IN RAISING A PRESUMPTION AGAINST THE ASSESSEE IN THE FORMER CASE IN THE LATTER CLASS OF CASES THE STATUTE ITS ELF RELAXES ITS RIGOUR BY DIRECTING THAT WHERE IN RESPECT OF ANY AMOUNT ADDED OR DISALLOWED AND ANY EXPLANATION IS OFFERED BY SUCH PERSON WHICH IS NOT ACCEPTED BECAUSE THE ASSES SEE HAS FAILED TO SUBSTANTIATE THE SAME BUT SUCH EXPLANATION IS BONA FIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME HAV E BEEN DISCLOSED BY HIM THE EXPLANATION SHALL NOT APPLY'. 4.16 THEREFORE IN VIEW OF THE ABOVE DISCUSSIONS AN D FOLLOWING THE ORDER OF CIT(A)VIII FOR AY 02-03 DATED 25-11-09 THE PENALTY LEVIED BY THE AO IN RESPECT OF THE DISALLOWANCE OUT OF CLAIM FOR DEDUCTION U/S 80IA AM OUNTING TO RS. 35 60 666/- CANNOT BE SUSTAINED. IN VIEW OF THIS THE LEVY OF PENALTY ON SUCH AMOUNT IS HEREBY DELETED. 4.17 SO FAR AS THE LEVY OF PENALTY ON THE AMOUNT OF UNEXPLAINED EXPENSES OF RS. 2 90 984/- IS CONCERNED WHICH HAS BEEN CONFIRMED BY THE ID. CI T(A) IT IS SEEN THAT THE APPELLANT HAS NOT DISCHARGED THE ONUS CAST UPON IT IN TERMS OF TH E EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT AS REFERRED TO ABOVE. FURTHER THE APPELLANT HAS FAILED TO PROVE THAT THE EXPLANATION FILED BY HIM IN RESPECT OF SUCH EXPENSE S WAS BONAFIDE AND ALL THE FACTS RELATING TO THE SAME HAVE BEEN DISCLOSED BY HIM DUR ING THE ASSESSMENT PROCEEDINGS OR DURING THE PENALTY PROCEEDINGS BEFORE THE A.O. THER EFORE IN THESE CIRCUMSTANCES THE APPELLANT HAS RIGHTLY BEEN HELD GUILTY FOR CONCEALI NG SUCH PARTICULAR OF INCOME BY THE A.O IN TERMS OF THE PROVISIONS OF SEC. 271(1)(C) OF THE ACT. IN VIEW OF THIS THE LEVY OF PENALTY ON SUCH AMOUNT IS HEREBY CONFIRMED. 4. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A) RE VENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE PENALTY U/S 271(L)(C) OF RS. 13 08 544/- OUT OF RS. 14 15 581 WITHOUT APPRE CIATING THE FACT THAT THE AMOUNT OF ADDITION ON ANY ISSUE ABOUT WHICH THE ASSESSEE IS U NABLE TO OFFER ANY SATISFACTORY EXPLANATION SHALL BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 5. BEFORE US AT THE OUTSET LD. A.R. SUBMITTED THAT TH E ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY ITS OWN CASE FOR EARLIER YEARS. SHE SUBMITTED THAT ON IDENTICAL ITA NO 2874/ AHD/2011 . A.Y. 2003- 04 4 FACTS IN ASSESSEES OWN CASE FOR A.Y. 2002-03 THE REVENUE HAD PREFERRED APPEAL BEFORE HONBLE TRIBUNAL. HONBLE TRIBUNAL WH ILE DECIDING THE REVENUES APPEAL IN ITA NO. 950/AHD/2010 ORDER DATE D 29.11.2013 HAS CONFIRMED THE ORDER OF CIT(A) IN DELETING THE PENAL TY. SHE THEREFORE SUBMITTED THAT SINCE THE FACTS IN THE YEAR UNDER AP PEAL ARE IDENTICAL THAT THAT OF A.Y. 2002-03 AND SINCE THE PENALTY HAS BEEN DELE TED BY THE HONBLE TRIBUNAL IN A.Y. 2002-03 THE ORDER OF LD. CIT(A) B E CONFIRMED. SHE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION . LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE A.O HAD LEVIED PENALTY U/S. 271(1 )(C) ON THE DISALLOWANCE OF CLAIM DEDUCTION U/S. 80IA AND ALSO ON UNEXPLAINE D EXPENSES OF RS. 2 90 984/- LD. CIT(A) DELETED THE PENALTY LEVIED U /S. 80IA BUT UPHELD THE PENALTY ON UNEXPLAINED EXPENSES. CIT(A) WHILE DELET ING THE PENALTY HAS OBSERVED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTI ON U/S. 80IA WAS NOT HELD TO BE FABRICATED OR FALSE AND A.O HAS ALSO NOT BROU GHT ON RECORD ANY FACT TO SHOW THAT THE ASSESSEES CLAIM FOR DEDUCTION WAS FA LSE. WE ALSO FIND THAT IN ASSESSEES OWN CASE FOR A.Y. 2002-03 IN ITA NO. 950 /AHD/2010 AGAINST THE DELETION OF PENALTY AND ON IDENTICAL FACTS REV ENUE HAD PREFERRED APPEAL BEFORE HONBLE TRIBUNAL AND THE SAME WAS DELETED BY HOLDING AS UNDER:- 8. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A) DATED 25.11.2009 AND THE ONLY ISSUE IS THAT THE LEARNED C IT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S. 271(L)(C) OF RS.34 63 5037-PERT AINING TO THE ADDITION MADE U/S.80IA OF IT ACT. 9. WHILE DELETING THE PENALTY LEARNED CIT(A) HAS HELD AS UNDER: '4.5 I HAVE CONSIDERED THE FACTS AND SUBMISSIONS OF THE LD. A.R CAREFULLY. IT IS I SEEN THAT THE A.O HAS LEVIED THE PENALTY IN RESPECT OF T HE AMOUNT WHICH HAS BEEN FINALLY CONFIRMED BY THE LD. CIT(A) AS REFERRED TO ABOVE. T HESE ADDITIONS PERTAINED TO DISALLOWANCE OF DEDUCTION U/S 801A OF THE ACT ON IN TEREST AND OTHER INCOME AND ITA NO 2874/ AHD/2011 . A.Y. 2003- 04 5 UNACCOUNTED EXPENSES. AS REGARDS LEVY OF PENALTY IN RESPECT OF DISALLOWANCE CONFIRMED BY THE LD. CIT(A) I FIND FORCE IN THE AR GUMENT OF THE LD. A.R THAT THE LD. C1T(A) HAS ALLOWED THE DEDUCTION TO THE APPELLANT U /S 80IA IN PRINCIPLE HOWEVER HE HAS HELD THAT SAME IS NOT ALLOWABLE IN RESPECT OF R ECEIPT FROM INTEREST AND MISCELLANEOUS INCOME. FURTHER THE A. O WHILE LEVYI NG THE PENALTY IN RESPECT OF THE DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S 801A HAS NOT HELD THAT THE APPELLANT'S CLAIM FOR THE SAME WAS FALSE OR FABRICATED. IT HAS ALSO NOT BEEN POINTED OUT THAT APPELLANT DID NOT FILE COMPLETE DETAILS WITH REGARD TO CLAIM FOR DEDUCTION U/S 80IA BEFORE THE A.O. 4.6 SECTION 271(1 )(C) OF THE ACT PROVIDES THAT IF THE ASSESSING OFFICER IN THE COURSE OF THE PROCEEDINGS UNDER THE ACT IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT O F TAX SOUGHT TO BE EVADED BY REASONS OF THE CONCEALMENT OF PARTICULARS OF HIS IN COME. EXPLANATION I TO SECTION STATES THAT WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF TOTAL INCOME OF ANY PERSON UNDER THIS ACT SUCH PERSON FAILS TO OFF ER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE A.O. FALSE OR SUC H PERSON OFFER AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO P ROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AN D MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME HAVE BEEN DISCLOSED BY HIM THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESU LT THEREOF SHALL FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION BE DEEMED TO REP RESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. THE EFFECT O F THIS EXPLANATION IS THAT IF THE NECESSARY INGREDIENTS AS STATED HEREIN ARE SATISFIE D THEN THE AMOUNT DISALLOWED IN COMPUTING TOTAL INCOME SHALL FOR THE PURPOSES OF CL AUSE (C) OF THIS SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICU LARS HAVE BEEN CONCEALED. THE NECESSARY ELEMENTS FOR ATTRACTING THIS EXPLANATION ARE THREE FOLD: - A) THE PERSON FAILS TO OFFER HIS EXPLANATION OR B) HE OFFERS THE EXPLANATION WHICH IS FOUND BY THE A.O. TO BE FALSE OR C) THE PERSON OFFERS EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT A LL THE FACTS RELATING THE SAME HAVE BEEN DISCLOSED BY HIM. 4.7 IF THE CASE FALLS IN ANY THREE OF INGREDIENTS THEN THE DEEMING PROVISION INTO PLAY AND THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME IS CONSIDERED AS THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEE N CONCEALED FOR THE PURPOSES OF CLAUSE (C) OF SECTION 271(1) AND THE PENALTY FOLLOW S. IF THE ASSESSEE SUCCESSFULLY COMES OUT OF THE ABOVE THREE CONSEQUENTS THEN HE CA NNOT BE TO HAVE CONCEALED HIS PARTICULARS OF INCOME WITH REFERENCE TO THE AMOUNT ADDED OR DISALLOWED IN COMPUTATION OF TOTAL INCOME...................... 4.17 THEREFORE IN VIEW OF THE ABOVE THE PENALTY LE VIED BY THE AO IN RESPECT OF THE DISALLOWANCE OUT OF CLAIM FOR DEDUCTION U/S. 80IA A MOUNTING TO RS.34 63 530/- CANNOT BE SUSTAINED. IN VIEW OF THIS THE LEVY OF PENALTY ON SUCH AMOUNT IS HEREBY DELETED.' 10. HAVING HEARD THE SUBMISSION OF BOTH THE SIDES A ND CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW T HAT THIS IS A CASE WHERE A DISALLOWANCE ITA NO 2874/ AHD/2011 . A.Y. 2003- 04 6 WAS MADE BY THE AO ON THE BASIS OF THE MATERIAL FAC TS ALREADY ON RECORD AND THE SAID DISALLOWANCE HAS BECOME A SUBJECT OF CONTROVERSY. T HUS WE ARE OF THE CONSIDERED OPINION THAT LEARNED CIT(A) HAS RIGHTLY DELETED THE PENALTY. WE FIND NO FORCE IN THIS GROUND OF THE REVENUE; HENCE THE SAME IS HEREBY RE JECTED. 10. BEFORE US REVENUE HAS NOT POINTED OUT ANY DISTINGU ISHING FEATURE BETWEEN THE CASE OF THE ASSESSEE FOR A.Y. 2002-03 A ND A.Y. 03-04 NOR HAS BROUGHT ANY CONTRARY BINDING DECISIONS IN ITS S UPPORT. IN VIEW OF THE AFORESAID FACTS WE FIND NO REASON TO INTERFERE WIT H THE ORDER OF LD. CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED . 11. IN THE RESULT THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 24 - 04 - 2015. SD/- SD/- (RAJPAL YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD