ACIT CIR 6(1), MUMBAI v. HIND ALUMINIUM INDUSTRIES LTD, MUMBAI

ITA 4006/MUM/2009 | 2003-2004
Pronouncement Date: 31-05-2010 | Result: Dismissed

Appeal Details

RSA Number 400619914 RSA 2009
Assessee PAN AAACA4671Q
Bench Mumbai
Appeal Number ITA 4006/MUM/2009
Duration Of Justice 11 month(s) 4 day(s)
Appellant ACIT CIR 6(1), MUMBAI
Respondent HIND ALUMINIUM INDUSTRIES LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 31-05-2010
Date Of Final Hearing 24-05-2010
Next Hearing Date 24-05-2010
Assessment Year 2003-2004
Appeal Filed On 26-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI R.K. PANDA (AM) AND SMT. ASHA VIJAYARA GHAVAN (JM) ITA NO.4006/MUM/2009 ASSESSMENT YEAR-2003-04 THE ACIT CIR. 6(1) MUMBAI VS. M/S. HIND ALUMINUM INDUSTRIES LTD. (PREVIOUSLY KNOWN AS ASSOCIATED PROFILES & ALUMINUM LTD. ) B-1 TULSI VIHAR 1 ST FLOOR DR. A.B. ROAD WORLI NAKA MUMBAI-400 018 PAN-AAACA4671Q APPELLANT (RESPONDENT) APPELLANT BY: SHRI VIRENDRA OJHA RESPONDENT BY: SHRI VIPUL B. JOSHI O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED A GAINST THE ORDER DT. 31.3.2009 PASSED BY THE LD. CIT(A)-VI MUMBAI F OR THE ASSESSMENT YEAR 2003-04. 2. IN THE PENALTY ORDER DT. 31.3.2008 THE ASSESSIN G OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80-IB ON RE NT RECEIVED AND DIVIDEND RECEIVED AMOUNTING TO RS. 3 52 663/- AND R S. 4 13 064/- RESPECTIVELY. SINCE THE SAID INCOME IS NOT DERIVED FROM INDUSTRIAL UNDERTAKING THE SAME WAS DISALLOWED AND CONFIRMED BY THE CIT(A). ACCORDINGLY THE AO HAS LEVIED A PENALTY OF RS. 3 0 0 000/- U/S. 271(1)(C) OF THE ACT. 3. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A). BEFORE THE LD. CIT(A) THE AUTHORIZED REPRESENTATIV E OF THE ASSESSEE SUBMITTED THAT THE AO IS NOT JUSTIFIED IN LEVYING P ENALTY ON DISALLOWANCE ITA NO. 4006/M/09 2 OF 80-IB DEDUCTION. ACCORDING TO HIM WHEN THERE I S A DIFFERENCE OF OPINION BETWEEN THE DEPARTMENT AND THE ASSESSEE AND IF THE VIEW POINT OF THE ASSESSEE IS NOT ACCEPTED IT CANNOT BE TAKEN THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. RELIAN CE WAS ALSO PLACED ON THE FOLLOWING DECISIONS: I) HINDUSTAN STEEL LTD. VS STATE OF ORISSA (83 ITR 26)(SC) II) K.C. BUILDERS VS ACIT (265 ITR 562/135 TAXMAN 461)(SC) III) CIT VS AJAIB SINGH & CO. (253 ITR 630(P&H) 4. HE FURTHER SUBMITTED THAT THE CIT(A) HAS ALREADY CANCELLED THE PENALTY U/S. 271(1)(C) IN THE ASSESSEES SISTER CON CERN ASSOCIATE ALUMINUM INDUSTRIES PVT. LTD. ON SIMILAR FACTS. 5. THE LD. CIT(A) HELD AS FOLLOWS: IN THIS CASE IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS. THE MERE FACT TH AT THE EXPLANATION FURNISHED BY THE ASSESSEE WAS NOT CONSI DERED AS SATISFACTORY IT DOES NOT FOLLOW THAT THE EXPLANATIO N IS NOT SUBSTANTIATED. HENCE NO PENALTY U/S. 271(1) IS L EVIABLE. THE PENALTY ORDER LEVYING PENALTY AMOUNTING TO RS. 3 00 000/- IS CANCELLED. THIS GROUND OF APPEAL IS ALLOWED. 6. THE LD. COUNSEL FOR THE ASSESSEE SHRI VIPUL JOSH I SUBMITTED THAT IT IS A FUNDAMENTAL PRINCIPLE OF PENALTY THAT NO PENAL TY CAN BE LEVIED JUST BECAUSE A CLAIM PREFERRED BY THE ASSESSEE IS DISALL OWED. HE ALSO PLACED RELIANCE ON THE FOLLOWING HIGH COURT DECISIONS AND TRIBUNAL DECISIONS: I) CIT VS LOTUS TRANS TRAVELS (P) LTD. 177 TAXMAN 37 (DEL)(SC) WHERE THE CLAIM MADE BY THE ASSESSEE FOR DEDUCTION U/S. 80HHD WAS BONA FIDE AND IT HAD FURNISHED ALL THE MA TERIAL FACTS RELEVANT TO SAID CLAIM IT CANNOT BE SAID THAT THE ASSESSEE HAD CONCEALED INCOME BY FURNISHING INACCUR ATE PARTICULARS SO AS TO ATTRACT6 PENALTY U/S. 271(1)(C ). ITA NO. 4006/M/09 3 II) BALAJI VEGETABLES PRODUCTS (P) LTD VS CIT (290 ITR 172)(SC) MERELY BECAUSE REVENUE REFUSES TO ACCEPT CLAIM OF A SSESSEE FOR DEDUCTION AND TREATS SAME AS INCOME IT CANNOT BE SAID THAT ASSESSEE HAS CONCEALED INCOME IN ORDER TO JU STIFY LEVY OF PENALTY CIRCUMSTANCE MUST SHOW THAT ASSESSEE IS HAVING AN INTENTION TO CONCEAL INCOME AND TO EVADE PAYMENT OF TAX. III) CIT VS CAPLIN POINT LABORATORIES LTD (293 ITR 524 (MAD)(SC) MERELY BECAUSE CLAIM FOR DEDUCTION U/S. 80HHC AND 8 0-I WAS MADE BY ASSESSEE TREATING INTEREST INCOME AS BU SINESS INCOME AND SUCH CLAIM WAS DISALLOWED PENALTY COULD NOT BE IMPOSED ON ASSESSEE. IV) INDIA CINE AGENCIES VS DCIT (275 ITR 430)(TRIB .) THE BATTLE OF WITS BETWEEN THE ASSESSEE AND THEIR A DVISORS ON THE ONE HAND AND THE REVENUE ON THE OTHER IS BOUND TO RESULT IN DIFFERENT VIEW POINTS BEING PROJECTED AND AS LONG AS THERE IS NOTHING TO SHOW THAT THE ASSESSEE CONCEALE D THE INCOME WITH A DISHONEST INTENT OR HAD FURNISHED INA CCURATE PARTICULARS EITHER DELIBERATELY OR AS A RESULT OF G ROSS NEGLIGENCE WHICH WAS NOT CAPABLE OF BEING REGARDED AS AN INNOCENT ACT PENALTY IS NOT TO BE ORDINARILY LEVIE D. V) TELEBUILD CONSTRUCTION (P) LTD VS ACIT (13 SOT 218)(MUM)(TRIB) MERELY BECAUSE CLAIM OF DEDUCTION U/S. 80-IB WAS FO UND TO BE NOT ADMISSIBLE UNDER PROVISION OF ACT THAT WOUL D NOT BY ITSELF MAKE ASSESSEE LIABLE TO PENALTY FOR CONCEALM ENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOM E U/S. 271(1)(C). VI) THOMAS COOK (INDIA) LTD VS DCIT (105 TTJ 317 (M UM)(TRIB) THERE BEING NO CONCEALMENT OF FACTS PENALTY U/S. 2 71(1)(C) CANNOT BE LEVIED MERELY BECAUSE CLAIM FOR DEDUCTION U/S. 80HHC AND 80HHD WAS DISALLOWED. ITA NO. 4006/M/09 4 VII) ITO VS PURUSHOTTAM DAS CHOPRA (167 TAXMAN 86 ( DEL) (MAG) THE ASSESSEE HAD DISCLOSED ALL THE FACTS RELATING TO COMPUTATION OF TOTAL INCOME CLAIMING AFORESAID DEDU CTION ON BONAFIDE BELIEF THAT THE SAME WAS NOT TAXABLE IT C OULD BE SAID THAT THERE WAS NEITHER DELIBERATE CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE NOR DELIBERAT E FURNISHING OF INACCURATE PARTICULARS OF INCOME. T HEREFORE PENALTY IMPOSED ON THE ASSESSEE WAS NOT JUSTIFIED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON TH E ORDER OF THE AO. 8. WE HAVE HEARD BOTH THE PARTIES. IN THIS CASE IN THE RETURN OF INCOME FILED THE ASSESSEE CLAIMED DEDUCTION U/S. 80 IB OF THE I.T. ACT OF RS. 91 09 587/- WHICH INCLUDES THE CLAIM MADE IN RE SPECT OF THE AFORESAID INCOME BEING RENT DIVIDEND AND INTEREST. SINCE THE AO WAS OF THE OPINION THAT THE SAID INCOME IS NOT DERIVED FRO M INDUSTRIAL UNDERTAKING AND BEING IN THE NATURE OF INCOME FROM OTHER SOURCES THE SAME DO NOT QUALIFY FOR DEDUCTION U/S. 80IB OF THE I.T. ACT. THE ASSESSEE WAS THEREFORE DENIED DEDUCTION ON THIS AMOUNT. IN APPEAL THE LD. CIT(A) HAS CONFIRMED THIS ACTION OF THE AO. THE AO THEN INITIATED PENALTY PROCEEDINGS ON THE GROUND THAT THE ASSESSEE SHOULD NOT HAVE MADE THE CLAIM OF DEDUCTION U/S. 80IB OF THE I.T. ACT IN RES PECT OF THE IMPUGNED INCOME. 9. WE ARE OF THE OPINION THAT THE ASSESSEES CLAIM IS BASED ON CHARTERED ACCOUNTANTS CERTIFICATION. IN THE CASE OF CIT VS S.D. RICE MILLS 275 ITR 206 (P&H) IT HAS BEEN HELD AS FOLLOW S: CLAIM OF ASSESSEE FOR DEDUCTION U/S. 80-I DULY SU PPORTED BY CERTIFICATE OF CHARTERED ACCOUNTANT IN PRESCRIBED F ORMAT BEING A BONA FIDE CLAIM IF DISALLOWED WOULD NOT JUSTIFY P ENALTY FOR CONCEALMENT OF INCOME. 10. FURTHER THE APEX COURT IN THE CASE OF CIT VS. R ELIANCE PETROPRODUCTS (P) LTD (322 ITR 158) WHEREIN IT HAS BEEN HELD AS FOLLOWS: ITA NO. 4006/M/09 5 SECTION 271(1)(C) APPLIES WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURA TE PARTICULARS OF SUCH INCOME. THE WORDS INACCURATE PARTICULARS M EAN THAT THE DETAILS SUPPLIED IN THE RETURN ARE NOT ACCURATE NO T EXACT OR CORRECT NOT ACCORDING TO TRUTH OR ERRONEOUS. IN THE ABSENC E OF A FINDING BY THE AO THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE WOULD BE NO QUESTION OF INVITING PENALTY U/S. 271(1)(C). BY NO STRETCH OF IMAGINATION CAN THE MAKING OF AN INCORRECT CLAIM IN LAW TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. A MERE MAKIN G OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. 11. THE APEX COURT CONSIDERED DHARMENDRA TEXTILE P ROCESSORS (306 ITR 277 SC) AND DILIP SHROFF AND HELD THAT THE WORD S CONCEAL AND INACCURATE CONTINUES TO BE GOOD LAW FOR THE IMPOS ITION OF PENALTY UNDER SECTION 271(1)(C) AND EXPLAINED THAT WHAT WAS OVERR ULED IN DHARMENDRA TEXTILE PROCESSORS WAS ONLY THAT PART IN DILIP SHR OFFS CASE WHERE IT WAS HELD THAT MENS REA WAS AN ESSENTIAL REQUIREMENT FO R PENALTY U/S. 271(1)(C). THEREFORE THE DEPARTMENTS RELIANCE ON DHARMENDRA TEXTILES CASE IS NOT OF ANY RELEVANCE. IT CANNOT BE SAID THA T ASSESSEE HAS FURNISHED INACCURATE PARTICULARS. HENCE WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DELETE THE PENALTY. 12. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF MAY 2010 SD/- SD/- (R.K. PANDA) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 31 ST MAY 2010 RJ ITA NO. 4006/M/09 6 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR H BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI ITA NO. 4006/M/09 7 DATE INITIALS 1 DRAFT DICTATED ON: 26.5.2010 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 2 6 . 5 .2010 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: _________ ______ 9. DATE OF DISPATCH OF ORDER: _________ ______