ACIT 3(2)(1), MUMBAI v. MANSUKHLAL INVESTMENT P.LTD, MUMBAI

ITA 7683/MUM/2016 | 2010-2011
Pronouncement Date: 23-11-2017 | Result: Allowed

Appeal Details

RSA Number 768319914 RSA 2016
Assessee PAN AADCM4071E
Bench Mumbai
Appeal Number ITA 7683/MUM/2016
Duration Of Justice 10 month(s) 23 day(s)
Appellant ACIT 3(2)(1), MUMBAI
Respondent MANSUKHLAL INVESTMENT P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 23-11-2017
Assessment Year 2010-2011
Appeal Filed On 30-12-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY JUDICIAL MEMBER AND SHR I G. MANJUNATHA ACCOUNTANT MEMBER ITA NO .7683 /MUM. /2016 ( ASSESSMENT YEAR : 2010 11 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(2)(1) MUMBAI . APPELLANT V/S MANSUKHLAL INVESTMENT PVT. LTD. 55 56 5 TH FLOOR FREE PRESS HOUSE NARIMAN POINT MUMBAI 400 021 PAN AADCM4071E . RESPONDENT ASSESSE E BY : NONE REVENUE BY : SHRI RAJAT MITTAL DATE OF HEARING 09.11.2017 DATE OF ORDER 23.11.2017 O R D E R PER SAKTIJIT DEY J.M. THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 26 TH SEPTEMBER 2016 PASSED BY THE LEARNED COMMISSIONER (APPEALS) 8 MUMBAI DELETING THE PENALTY AMOUNTING TO ` 10 10 471 FOR THE ASSESSMENT YEAR 2010 11. 2 . BRIEF FACTS ARE THE ASSESSEE A COMPANY IS ENGAGED IN THE BUSINESS OF GENERATION OF ELECTRICITY. THAT BESIDES THE ASSESSEE ALSO ENGAGED ITSELF IN INVESTMENT ACTIVITIES BY INVESTING THE SURPLUS FUNDS IN 2 MANSUKHLAL INVESTMENT PVT. LTD. SHARES AND MUTUAL FUNDS. FOR THE ASSESSMENT YEAR UNDER DISPUTE THE ASSESSEE FILED ITS RETURN OF INCOME ON 28 TH SEPTEMBER 2010 DECLARING INCOME OF ` 39 62 303 UNDER NORMAL PROVISIONS AND BOOK PROFIT OF ` 89 14 820 UNDER SECTION 115JB OF THE ACT. DURING THE ASSES SMENT PROCEEDINGS THE ASSESSING OFFICER WHILE VERIFYING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT IN RESPECT OF THE POWER GENERATION UNIT FOUND THAT THE ASSESSEE HAS TREATED THE INCOME OF ` 32 70 135 FROM SALE OF CARBON CREDIT AS PROFIT FROM THE POWER GENERATION BUSINESS AND HAS CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT. THE ASSESSING OFFICER BEING OF THE VIEW THAT INCOME RECEIVED FROM SALE OF CARBON CREDIT IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA CALLED UPON THE ASSESSEE TO JUSTIFY ITS CLAIM. TH R OUGH AN ELABORATE WRITTEN SUBMISSION FILED BEFORE THE ASSESSING OFFICER THE ASSESSEE STATED THAT THE INCOME RECEIVED FROM SALE OF CAR BON CREDIT IS IN THE NATURE OF CAPITAL RECEIPT HENCE NOT TAXABLE. FURTHER THE ASSESSEE SUBMITTED IN CASE IT IS HELD AS INCOME OF THE ASSESSEE THEN IT SHOULD BE CONSIDERED AS ARISING OUT OF THE BUSINESS OF GENERATION OF POWER HENCE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. THE ASSESSING OFFICER ACCEPTED NEITHER OF THE CONTENTIONS RAISED BY THE ASSESSEE AND HELD THAT THE INCOME RECEIVED FROM SALE OF CARBON CREDIT THOUGH IS TO BE TREATED AS INCOME OF THE ASSESSEE HOWEVER NO DEDUCTION UNDER SECTION 8 0IA OF THE ACT IS ALLOWABLE. ON THE BASIS OF 3 MANSUKHLAL INVESTMENT PVT. LTD. SUCH DISALLOWANCE THE ASSESSING OFFICER INIT IATED PROCEEDINGS FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND ULTIMATELY PASSED AN ORDER IMPOSING PENALTY OF ` 10 10 471 UNDER SECTION 271(1)(C) OF THE ACT ALLEGING FURNISHING OF INACCURATE PARTICULARS OF INCOME . A GAINST THE PENALTY OR DER PASSED BY THE ASSESSING OFFICER ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3 . THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE LIGHT OF THE DECISIONS RELIED UPON FOUND THAT IN THE TAX AUDIT RE PORT AS WELL AS OTHER ACCOMPANYING DOCUMENT FILED ALONG WITH RETURN OF INCOME THE ASSESSEE HAS FURNISHED FULL PARTICULARS OF THE INCOME DERIVED FROM SALE OF CARBON CREDIT AND DEDUCTION CLAIMED UNDER SECTION 80I A OF THE ACT. HE THEREFORE HELD THAT THE ALLEGATION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME IS UNSUBSTANTIATED. THE LEARNED COMMISSIONER (APPEALS) OBSERVED THAT THE ASSESSEE HAS MERELY CLAIMED A DEDUCTION WHICH AFTER VERIFICATION BY THE ASSESSING OFFICER WAS NOT FOUND TO BE ALLOWABLE. THEREFORE HE HELD THAT MAKING A CLAIM WHICH WAS REJECTED BY THE ASSESSING OFFICER CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. ACCORDINGLY HE DELETED THE PENALTY IMPOSED. 4 MANSUKHLAL INVESTMENT PVT. LTD. 4 . WHEN THE APPEAL WAS CALLED FOR HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF ISSUANCE OF NOTICE O F HEARING THROUGH RPAD . THEREFORE WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEP ARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 5 . WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. UNDISPUTED FACTS ARE THE INCOME RECEIVED FROM SALE OF CARBON CREDIT AMOUNTING TO ` 32 70 135 WAS TREATED AS PART OF THE PROFIT FROM POWER GENERATION UNIT AND ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT. THE ASSESSING OFFICER DISALLOWED ASSESSEES CLAIM OF DEDUCTION ON THE REASONING THAT THE INCOME FROM SALE OF CARBON CREDIT CANNOT BE CONSIDERED AS PROFIT DERIVED FROM POWER GENERATION ACTIVITY. AS RIGHTLY OBSERVED BY THE LEARNED COMMISSIONER (APPEALS) THE ASSESSEE HAS FURNISHED FULL PARTICULARS OF THE INCOME DERIVED FROM SALE OF CARBON CREDIT AS WELL AS DEDUCTION CLAIMED UNDER SECT ION 80IA OF THE ACT IN THE TAX AUDIT REPORT. T HEREFORE THE ALLEGATION OF THE ASSESSING OFFICER THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME IS UNACCEPTABLE. FURTHER CLAIM OF THE ASSESSEE THAT THE INCOME FROM SALE OF CARBON CREDIT IS NOT T AXABLE AS IT IS IN THE NATURE OF CAPITAL RECEIPT IS DEBATABLE I SSUE ON WHICH DIVERGENT VIEW HAVE BEEN EXPRESSED BY DIFFERENT BENCHES OF THE TRIBUNAL. THEREFORE CONSIDER ED IN THE AFORESAID 5 MANSUKHLAL INVESTMENT PVT. LTD. PERSPECTIVE THE CLAIM OF DEDUCTION BY THE ASSESSEE DOES NOT TANT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSEE HAS MERELY CLAIMED A DEDUCTION WHICH WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER. THEREFORE APPLYING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN CIT V/S RELIANCE PETROPRO DUCTS PVT. LTD. [2010] 322 ITR 158 (SC) NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE IMPOSED. ACCORDINGLY WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED. 6 . IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.11.2017 SD/ - G. MANJUNATHA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI DATED: 23.11.2017 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT MUMBAI CITY CONCERNED; ( 5 ) THE DR ITAT MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT MUMBAI