DCIT, Panchkula v. M/s Virgo Industries, Panchkula

ITA 312/CHANDI/2017 | 2011-2012
Pronouncement Date: 30-11-2017 | Result: Dismissed

Appeal Details

RSA Number 31221514 RSA 2017
Assessee PAN AAEFV9154A
Bench Chandigarh
Appeal Number ITA 312/CHANDI/2017
Duration Of Justice 9 month(s) 14 day(s)
Appellant DCIT, Panchkula
Respondent M/s Virgo Industries, Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 30-11-2017
Last Hearing Date 28-11-2017
First Hearing Date 28-11-2017
Assessment Year 2011-2012
Appeal Filed On 14-02-2017
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH CHANDIGARH BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND SHRI B.R.R. KUMAR ACCOUNTANT MEMBER ITA NO.312/CHD/2017 ASSESSMENT YEAR: 2008-09 THE DCIT VS. VIRGO INDUSTRIES PANCHKULA CIRCLE H.NO. 129 SECTOR-10 PANCHKULA PANCHKULA PAN NO. AAEFV9154A (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. MANOJ KUMAR REVENUE BY : SH. ASHISH ABROL DATE OF HEARING : 28/11/2017 DATE OF PRONOUNCEMENT : 30/11/2017 ORDER PER B.R.R. KUMAR A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. CIT(A)- PANCHKULA DT. 13/12/2016. 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE AND CANCELLED T HE PENALTY U/S 271(1)(C) WHICH IS NOT CORRECT BECAUSE THE ASSESEE HAS DELIBE RATELY FURNISHED THE INACCURATE PARTICULAR OF ITS INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AVING MANUFACTURING OF BUSINESS OF LAMINATES AND PRE-LAMINATED BOARDS AT K ALA AMB SIRMOUR HIMACHAL PRADESH FILED ITS RETURN ON 29.09.2011 DECLARING I NCOME OF RS.35 000/- AFTER CLAIMING DEDUCTION U/S 80IC OF THE ACT AMOUNTING TO RS. 16.08.97.233/-. 4. THE AO COMPLETED THE ASSESSMENT U/S 143(3) AT AN INCOME OF RS.12 08 81 150/- AFTER ALLOWING DEDUCTION U/S 80IC TO THE EXTENT OF 25% OF PROFIT AS AGAINST 100% CLAIMED BY THE ASSESSEE AND DISALLO WANCE OF GAIN ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION ON IMPORTS FOR 80IC DEDUCTION. THE PENALTY PROCEEDINGS U/S 271(1 )(C) WAS ALSO INITIATED FOR F URNISHING INACCURATE PARTICULARS OF INCOME. 2 5. THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) PANCHKULA WHO DISMISSED THE APPEAL. 6. CONSEQUENTLY THE AO CONCLUDED THAT THE AMOUNT AD DED/DISALLOWED IN COMPUTING TOTAL INCOME OF THE ASSESSEE DEEMED TO R EPRESENT THE INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS WERE FURNIS HED. THE AO HELD THAT THE ASSESSEE HAD DELIBERATELY FURNISHED INACCURATE PART ICULARS OF ITS INCOME AND THUS LIABLE FOR PENALTY U/S 271(1 )(C) OF THE ACT. AND IMPOSED PENALTY U/S 271(L)(C) @ 100% I.E. RS.3 71 27 358/- FOR THE A.Y. 2011-12 FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 7. THE LD. CIT(A) DISMISSED THE PENALTY LEVIED BY THE ASSESSING OFFICER. WHILE DISMISSING THE PENALTY THE LD. CIT(A) HELD AS UNDER: DURING THE APPELLATE PROCEEDINGS THE COUNSEL FOR T HE APPELLANT SUBMITTED THAT THE SUBSTANTIAL EXPANSION UNDERTAKEN BY THE ASSESSE E FIRM IS NOT IN DISPUTE AND SAME IS ALSO SUPPORTED BY AUDIT REPORT IN FORM 10CC B. THE ONLY DISPUTE WAS WHETHER APPELLANT JS ENTITLED FOR DEDUCTION U/S 80I C @ 100% OR 25%. THE APPELLANT DISCLOSED ALL THE PARTICULARS OF INCOME IN THE RETU RN OF INCOME AND HAS NOT MADE ANY WRONG OR FALSE CLAIM THE CLAIM U/S 801C HAVE B EEN DENIED ON THE DEBATABLE ISSUE AND THE WHOLE ISSUE IS REGARDING IN TERPRETATION OF PROVISIONS OF SECTION 80IC OF THE ACT ON WHICH TRIBUNAL ALSO DISM ISSED APPEAL OF THE APPELLANT BUT APPEAL OF THE APPELLANT IS PENDING BEFORE HIGH COURT FOR CONSIDERATION. FURTHER. ITAT DELHI BENCH IN THE CASE OF TIRUPATI L PG LTD. IN ITA NO. 991/2013 DATED 29.01.2014 ALLOWED THE SIMILAR CLAIM OF ASSESSEE. T HEREFORE THE ISSUE IS HIGHLY- DEBATABLE AND DEPENDENT UPON THE INTERPRETATION OF PROVISIONS OF SECTION 80IC OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT APPELLAN T WAS ENTITLED FOR DEDUCTION U/S 801C. THE ISSUE WAS WHETHER 100% DEDUCTION OR 25% THEREFORE APPELLANT HAS NOT MADE ANY WRONG CLAIM DELIBERATELY AND CLAIM OF THE APPELLANT WAS NOT FALSE. THE APPELLANT MADE BONAFIDE CLAIM OF DEDUCTION U/S 80IC . THEREFORE IT IS NOT A CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME. MAK ING AN INCORRECT CLAIM WAS NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE APPELLANT RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 AND HONBLE ITAT IN M/S HYCRON EL CTRONICS VS. ITO IN ITA NO. 326/CHD/2015 DATED 08/10/2015. I HAVE GONE THROUGH THE FACTS OF THE CASE AND WRITT EN SUBMISSION FILED BY THE APPELLANT. IT IS NOTED THAT ON IDENTICAL FACTS THE JURISDICTIONAL H ON'BLE ITAT CHANDIGARH BENCH HAS CANCELLED THE PENALTY U/S 271( 1 )(C) WITH FOLLOWING OBSERVATION :- '8. CONSIDERING THE ABOVE DISCUSSION WE ARE OF T HE VIEW THAT IT IS NOT A FIT CASE OF LEVY OF PENALTY UNDER SECTION 271(L)(C) OF THE ACT BECAUSE IT IS WELL SETTLED THAT LEVY OF PENALTY IS NOT AUTOMATIC IN EACH AND EVERY CASE AS ITDEPENDS UPON FACTS AND CIRCUMSTANCES OF THE CASE. SINCE THE ASSESSEE S CLAIM OF DEDUCTION UNDER SECTION 80IC HAVE BEEN ALLOWED IN EARLIER YEARS @ 100% AND ADMITTEDLY ASSESSEE UNDERTOOK SUBSTANTIA L EXPANSION IN ASSESSMENT YEAR UNDER APPEAL THEREFORE ASSESSEE MA DE BONAFIDE CLAIM OF DEDUCTION UNDER SECTION 801C OF THE ACT AND THERE W ERE NO JUDICIAL PRONOUNCEMENTS AGAINST THE ASSESSEE ON THE DATE OF MAKING SUCH A CLAIM. THEREFORE IT COULD NOT BE CONSTRUED THAT ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME SO AS TO LEVY THE PENALTY UND ER SECTION 271(L)(C) OF 3 THE ACT. WE ACCORDINGLY SET ASIDE THE ORDERS OF A UTHORITIES BELOW AND CANCEL THE PENALTY. ' 8. WE HAVE GONE THROUGH THE FACTS ON RECORD. SINCE THE DECISION OF THE LD. CIT(A) WAS BASED ON THE ORDER OF THE COORDINATE BEN CH ON THE IDENTICAL FACTS THE GROUND UNDER APPEAL IS COVERED BY THE DECISION OF JURISDICTIONAL ITAT CHANDIGARH BENCH THEREFORE FOLLOWING THE DECISION AND KEEPING IN VIEW THE BONAFIDE OF THE ASSESSEE IN CLAIMING THE DEDUCTION THE PENALTY IMPOSED ON THE TAX SOUGHT TO BE EVADED ON DISALLOWANCE ON ACCO UNT OF DEDUCTION CLAIMED IS HEREBY DELETED. THE ORDER OF THE LD. CIT (A) IS CONFIRMED. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (B.R.R.KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30/11/2017 AG COPY TO: THE APPELLANT THE RESPONDENT THE CIT TH E CIT(A) THE DR