DCIT - 8(1), MUMBAI v. M/s. CASTROL INDIA LTD., MUMBAI

ITA 5753/MUM/2006 | 2001-2002
Pronouncement Date: 31-05-2010 | Result: Dismissed

Appeal Details

RSA Number 575319914 RSA 2006
Assessee PAN UGUST2006P
Bench Mumbai
Appeal Number ITA 5753/MUM/2006
Duration Of Justice 3 year(s) 6 month(s) 27 day(s)
Appellant DCIT - 8(1), MUMBAI
Respondent M/s. CASTROL INDIA LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-05-2010
Date Of Final Hearing 20-05-2010
Next Hearing Date 20-05-2010
Assessment Year 2001-2002
Appeal Filed On 03-11-2006
Judgment Text
ITA NO. 5753/MUM/06 ASSESSMENT YEAR 2001-02 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH MUMBAI BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) AND SMT ASHA VIJAYRAGHAVAN ( JUDICIAL MEMBER) ITA NO. 5753/MUM/06 ASSESSMENT YEAR 2001-02 DY COMMISSIONER OF INCOME TAX RANGE 8 (1) MUMBAI .APPELLANT VS. CASTROL INDIA LIMITED . RESPONDENT TECHNOPOLIS KNOWLEDGE PARK MAHAKALI CAVES ROAD CHAKALA ANDHERI (EAST) MUMBAI 400 093 APPELLANT BY : SHRI AJIT K SINHA RESPONDENT BY : SHRI APOORVA R SHAH O R D E R PER PRAMOD KUMAR: 1. THIS IS AN APPEAL FILED BY THE ASSESSING OFFICE R AND IS DIRECTED AGAINST THE ORDER DATED 24 TH AUGUST 2006 PASSED BY THE CIT(A) IN THE MATTER OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2001-02. 2. GRIEVANCE OF THE ASSESSING OFFICER IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A ) ERRED IN NOT UPHOLDING THE ORDER OF THE ASSESSING OFFICER LEVYIN G PENALTY UNDER SECTION ITA NO. 5753/MUM/06 ASSESSMENT YEAR 2001-02 PAGE 2 OF 6 271(1)(C) OF THE INCOME TAX ACT 1961 WITHOUT APPR ECIATING THE FACTS OF THE CASE. 3. THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE IS A COMPANY ENGAGED IN MANUFACTURING AND DISTRIBUTION O F LUBRICATING OILS GREASES BRAKE FLUIDS SPECIALTY PRODUCTS AND WOOD PRESERVATIVES ETC. THE ASSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF INTER ALIA EXPENDITURE OF RS 1 85 368 ON FOREIGN TRAVEL OF ACCOMPANYING SPOUSES OF DIRECTORS AND DEDUCTION OF RS 2 31 94 988 UNDER SECTION 80 IA AND SECTION 80 HHC OF THE ACT WHICH WAS FOUND TO BE INADMISSIBLE. AS REG ARDS SPOUSE TRAVEL EXPENSES IT HAS BEEN CONTENTION OF THE ASSESSEE TH AT THE CLAIM HAS BEEN MADE IN A TRANSPARENT MANNER AND IT IS ESSENTIALLY A MATTER OF OPEINION WHETHER SUCH EXPENSES ARE DEDUCTIBLE BUSINESS EXPEN DITURE OR NOT. AS REGARDS EXCESSIVE CLAIM OF DEDUCTION UNDER SECTION 80 IA IT WAS MAINLY ON ACCOUNT OF THE FACT THAT THE ASSESSEE DID NOT CLAIM DEPRECIATION - A FACT WHICH WAS DISCLOSED IN THE INCOME TAX RETURN ITSELF AND THAT THE CLAIM UNDER SECTION 80 IB WAS ALSO MADE IN RESPECT OF NON MANUFACTURING RECEIPTS - WHICH WAS ALSO DULY DISCLOSED IN THE A UDIT REPORT ACCOMPANYING THE INCOME TAX RETURN. AS REGARDS EXC ESSIVE DEDUCTION UNDER SECTION 80 HHC IT WAS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS ARRIVED AT THE PROFIT OF THE BUSINESS WITHOUT EXCLUDING THE DEDUCTION UNDER SECTION 80 IA AND NON BUSINESS RECE IPTS FROM THE PROFITS. THE ASSESSING OFFICER APART FROM MAKING ADDITIONS IN RESPECT OF THE ABOVE ALSO IMPOSED PENALTY UNDER SECTION 271(1)(C) FOR CONCEALMENT OF ITA NO. 5753/MUM/06 ASSESSMENT YEAR 2001-02 PAGE 3 OF 6 INCOME. HOWEVER WHEN MATTER WAS CARRIED IN APPEAL BEFORE THE CIT(A) THE CIT(A) WAS OF THE VIEW THAT IT WOULD NOT BE CO RRECT TO PRESUME THAT THE APPELLANT HAD FILED INACCURATE PARTICULARS OF I NCOME AND BY DOING SO MADE AN ATTEMPT TO CLAIM THE EXCESS DEDUCTION WHICH WAS EXPRESSLY NOT AVAILABLE TO THE ASSESSEE UNDER THE INCOME TAX ACT AND THAT IT IS A COMMON KNOWLEDGE THAT EACH AND EVERY ASPECT OF SECT ION 80 HHC AND 80 IA HAVE UNDERGONE JUDICIAL INTERPRETATION RIGHT FRO M THE HONBLE ITAT TO THE HIGHEST COURT OF THE LAND. THE CIT(A) WAS OF T HE VIEW THAT IN SUCH CIRCUMSTANCES IT IS INDEED IMPOSSIBLE TO CONCLUDE THAT THE APPELLANT HAD FILED INACCURATE PARTICULARS. HE CONCLUDED THAT TH E EXPLANATION OFFERED BY THE APPELLANT REARDING THE VARIOUS PARTICULARS FILE D FOR CLAIMING DEDUCTION UNDER SECTION 80 HHC AND UNDER SECTION 80 IA APPEAR S TO BE BONAFIDES AND UNDER THESE CIRCUMSTANCES IT IS HELD THAT AO WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE HAD CONCEALED ITS INCOME BY FILING INACCURATE PARTICULARS. THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF SO GIVEN BY THE CIT(A) AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CA SE AS ALSO THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT IT IS AN UNDISPUTED POSITION THAT THE ASSESSEE HAS MADE THE CLAIM INADMISSIBLE AS THEY MAY BE IN A T RANSPARENT MANNER AND WITHOUT CONCEALING THE DETAILS. IN OUR CONSIDERED V IEW MERE MAKING OF A ITA NO. 5753/MUM/06 ASSESSMENT YEAR 2001-02 PAGE 4 OF 6 CLAIM OF DEDUCTION INCORRECT AS IT MAY TURN OUT TO BE CANNOT BE CONSTRUED AS CONCEALMENT OF PARTICULARS. WHAT IS A CORRECT CL AIM AND WHAT IS AN INCORRECT CLAIM IS A MATTER OF PERCEPTION. IN OUR C ONSIDERED VIEW RAISING A LEGAL CLAIM EVEN IF IT IS ULTIMATELY FOUND TO BE LEGALLY UNACCEPTABLE CANNOT AMOUNT OF FURNISHING OF INACCURATE PARTICULA RS OF INCOME. INACCURATE AS WE HAVE NOTED ABOVE IS SOMETHING FACTUALLY INCORRECT AND INTERPRETATION OF LAW CAN NEVER BE A FACTUAL ASPECT . IN ANY EVENT THE CONNOTATIONS OF EXPRESSION PARTICULARS OF INCOME DO NOT EXTEND TO THE ISSUES OF INTERPRETATION OF LAW AND AS SUCH MAKING A CLAIM WHICH IS FOUND TO BE UNACCEPTABLE IN LAW CANNOT BE TREATED AS FUR NISHING OF INACCURATE PARTICULARS OF INCOME. MERE MAKING OF AN INCORRECT CLAIM AS IS THE SETTLED LEGAL POSITION IN VIEW OF HONBLE SUPREME COURTS J UDGMENT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS LIMITED (322 ITR 158) CAN NOT BE VISITED WITH PENAL CONSEQUENCES UNDER SECTION 271(1)(C) OF THE A CT. IN THIS CASE HONBLE SUPREME COURT WERE DEALING WITH A SITUATION IN WHI CH A CLAIM FOR DEDUCTION WAS MADE WHICH WAS FOUND TO BE INADMISSIBLE IN LAW. THIR LORDSHIPS WERE CONCERNED WITH THE QUESTION WHETHER IN THIS CASE AS A MATTER OF FACT THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. THEIR LORDSHIPS NOTED THAT IN THIS CASE THERE IS NO FINDING THAT ANY DETAILS SUP PLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR F ALSE AND ADD THAT SUCH BEING THE CASE THERE WOULD BE NO QUESTION OF INVIT ING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND THAT A MERE MAKI NG OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING INCOME OF THE ASSESSEE. IN OUR CONSIDERED VIEW IT IS ITA NO. 5753/MUM/06 ASSESSMENT YEAR 2001-02 PAGE 5 OF 6 THE SAME SITUATION IN THE PRESENT CASE. IT IS NOBOD YS ALLEGATION THAT THERE HAS BEEN ANY CONCEALMENT OF PARTICULARS OR THAT THE CLAIMS ARE MADE IN LESS THAN TRANSPARENT MANNER. 6. IN VIEW OF THE ABOVE DISCUSSIONS AND RESPECTFUL LY FOLLOWING THE ESTEEMED VIEWS OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (SUPRA) WE APPROVE THE CONCLUSIONS A RRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 7. IN THE RESULT THE APPEAL IS DISMISSED. PRONOUN CED IN THE OPEN COURT TODAY ON 31 ST DAY OF MAY 2010. SD/XX SD/XX (ASHA VIJAYRAGHAVAN) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 31 ST DAY OF MAY 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT MUMBAI 4. THE COMMISSIONER (APPEALS) MUMBAI 5. DEPARTMENTAL REPRESENTATIVE - BENCH MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI ITA NO. 5753/MUM/06 ASSESSMENT YEAR 2001-02 PAGE 6 OF 6 DATE INITIAL 1. DRAFT DICTATED ON 28.5.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 28.5.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 28.5.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 28.5.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 28.5.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 31.5.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 31.5.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER