ACIT, Bangalore v. M/s Molex (India) Pvt. Ltd.,, Bangalore

ITA 473/BANG/2010 | 1997-1998
Pronouncement Date: 28-01-2011 | Result: Dismissed

Appeal Details

RSA Number 47321114 RSA 2010
Bench Bangalore
Appeal Number ITA 473/BANG/2010
Duration Of Justice 9 month(s) 19 day(s)
Appellant ACIT, Bangalore
Respondent M/s Molex (India) Pvt. Ltd.,, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-01-2011
Date Of Final Hearing 24-01-2011
Next Hearing Date 24-01-2011
Assessment Year 1997-1998
Appeal Filed On 08-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE DR. O.K. NARAYANAN VICE PRESIDENT AND SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NOS.473 & 474(BANG)/2010 (ASSESSMENT YEARS: 1997-98 & 2001-02) ASST. COMMISSIONER OF INCOME-TAX CIRCLE-12(1) BANGALORE. APPELLANT VS. M/S.MOLEX (INDIA) PVT. LTD. NO.PLOT NO.6(A) SADARAMANGALA INDL. AREA KADUGODI BANGALORE-560 067. RESPONDENT APPELLANT BY: SHRI NARESH SAKA. RESPONDENT BY : SHRI VISHWESHWAR MUDIGONDA. O R D E R PER SMT. P. MADHAVI DEVI JM : BOTH THESE ARE DEPARTMENTAL APPEALS AGAINST THE OR DERS OF THE CIT(A)-III BANGALORE DATED 9-12-2009 DELET ING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOM E-TAX ACT 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'] FOR THE ASSESSMENT YEARS 1997-98 AND 2001-02. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-C OMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF PROFES SIONAL GRADE ITA NOS.473 & 474(BANG)/2010 PAGE 2 OF 4 CONNECTORS. IT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 1997-98 ON 28-11-1997 DECLARING A TOTAL LOSS O F RS.1 50 64 620/- AND FOR ASSESSMENT YEAR 2001-02 IT FILED ITS RETURN OF INCOME ON 30-10-2001 DECLARING A TOTAL IN COME OF RS.5 11 29 190/-. THE ASSESSEE HAS CLAIMED AN AMOU NT OF RS.8 63 446/- FOR THE ASSESSMENT YEAR 1997-98 AND RS.1 04 78 185/- FOR ASSESSMENT YEAR 2001-02 AS RE VENUE EXPENDITURE BEING THE EXPENSES INCURRED ON SMALL MA CHINE TOOLS AND FURNITURE COSTING LESS THAN RS.15 000/- AND RS. 50 000/- RESPECTIVELY. THE AO WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) READ WITH SEC.263 OF THE ACT HELD THAT THE S AID CLAIM OF THE ASSESSEE IS NOT ALLOWABLE AS THE SAME IS CAPITA L EXPENDITURE ON WHICH DEPRECIATION IS ALLOWABLE. 3. AGGRIEVED BY THE SAME THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO. THE ASSESSEE HAS ACCEPTED THE SAID ORDER OF THE CIT (A) AND DID NOT FILE ANY APPEAL BEFORE THE ITAT. MEANWHILE TH E AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) AND LEVIED PENALT Y AT 100% OF THE TAX SOUGHT TO BE EVADED. 4. AGGRIEVED THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A) WHO DELETED THE PENALTY STATING THAT THERE W AS NO DELIBERATE ATTEMPT BY THE ASSESSEE TO CONCEAL THE I NCOME. AGGRIEVED BY THE SAME THE REVENUE IS IN APPEAL BEF ORE US. ITA NOS.473 & 474(BANG)/2010 PAGE 3 OF 4 5. SHRI NARESH SAKA THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AO WHIL E SHRI VISHWESHWAR MUDIGONDA THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDERS OF THE CIT(A). 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD W E FIND THAT THE BASIS FOR LEVY OF PENALTY IS THE DISALLOWANCE O F THE CLAIM OF THE ASSESSEE AS REVENUE EXPENDITURE. THE ASSESSEE HAS ACCEPTED THE SAID DISALLOWANCE AND HAS CLAIMED DEPR ECIATION ON THE SAME AFTER CAPITALIZING THE SAID AMOUNT. AS HE LD BY THE VARIOUS HIGH COURTS IN CATENA OF CASES EVERY ADDIT ION OR DISALLOWANCE WILL NOT AUTOMATICALLY ATTRACT PENALTY . WE HAVE TO EXAMINE WHETHER THERE IS FURNISHING OF INACCURATE P ARTICULARS OR CONCEALMENT OF INCOME FOR THE LEVY OF PENALTY. IN THIS CASE THE ASSESSEE HAS CLAIMED REPLACEMENT OF SMALL MACHINE T OOLS AS REVENUE EXPENDITURE WHILE THE REVENUE HAS HELD IT T O BE CAPITAL EXPENDITURE. THERE IS NO FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. THERE IS NO DOUBT RAISED BY THE REVENUE AS REGARDS THE GENUINENESS OF THE EXPENDITU RE BUT IT IS ONLY THE NATURE OF THE EXPENDITURE WHICH HAS BEEN D OUBTED BY THE REVENUE. THEREFORE IN OUR VIEW THERE IS NO F URNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME BY THE ASSESSEE AND THEREFORE THE PENALTY IS NOT LEVIABLE. ACCORDING TO US THE CIT(A) WAS RIGHT IN DELETING THE PENALTY AN D WE UPHOLD THE SAME. ITA NOS.473 & 474(BANG)/2010 PAGE 4 OF 4 7. IN THE RESULT THE REVENUES APPEALS ARE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY 2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (SMT. P.MADHAVI DEVI) JUDICIAL MEMBER EKS COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR ITAT BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE