M/s. City Tiles Ltd.,, Sabarkantha v. The Dy.CIT.,S.K.Circle,, Himatnagar

ITA 829/AHD/2010 | 2006-2007
Pronouncement Date: 04-10-2013 | Result: Allowed

Appeal Details

RSA Number 82920514 RSA 2010
Assessee PAN AABCC8895M
Bench Ahmedabad
Appeal Number ITA 829/AHD/2010
Duration Of Justice 3 year(s) 6 month(s) 16 day(s)
Appellant M/s. City Tiles Ltd.,, Sabarkantha
Respondent The Dy.CIT.,S.K.Circle,, Himatnagar
Appeal Type Income Tax Appeal
Pronouncement Date 04-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 04-10-2013
Date Of Final Hearing 17-09-2013
Next Hearing Date 17-09-2013
Assessment Year 2006-2007
Appeal Filed On 18-03-2010
Judgment Text
ITA NO 829 & 2484/AHD/2010 . A.YS. 2005-0 6 & 2006- 07 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AH MEDABAD (BEFORE SHRI D.K. TYAGI J.M. & SHRI ANIL CHATURVE DI A.M.) I.T. A. NOS. 829 & 2484/AHD/2010 (ASSESSMENT YEA R: 2005-06 & 2006-07) CITI TILES LTD. CERAMIC ZONE AT & P.O. DALPUR TAL: PRANTIJ SABARKANTHA. (APPELLANT) VS. THE DCIT SABARKANTHA CIRCLE HIMATNAGAR. ( RESPONDENT) PAN: AABCC8895 M APPELLANT BY : SMT. A.N. SHAH. A.R. RESPONDENT BY : SHRI O.P. BATHEJA SR. D.R. ( )/ ORDER DATE OF HEARING : 17-09-201 3 DATE OF PRONOUNCEMENT : 04 -10-2013 PER SHRI ANIL CHATURVEDI A.M. 1. THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)- VI AHMEDABAD DATED 18.06.2010 & 10.11.2009 FOR A.Y S. 2005-06 & 2006-07 RESPECTIVELY. 2. AT THE OUTSET BOTH THE PARTIES SUBMITTED THAT THE FACTS OF THE CASE IN BOTH THE APPEALS ARE IDENTICAL EXCEPT FOR THE AMOUNTS AN D THEREFORE BOTH THE ITA NO 829 & 2484/AHD/2010 . A.YS. 2005-0 6 & 2006- 07 2 APPEALS CAN BE CONSIDERED TOGETHER. WE THEREFORE PR OCEED WITH THE FACTS OF A.Y. 05-06. 3. THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUT HORITIES ARE AS UNDER: 4. ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MA NUFACTURING OF CERAMIC TILES. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 05-06 ON 29.10.2005 DECLARING TOTAL INCOME AT RS. NIL AFTER CLAIMING DEDUCTION UNDER SECTION 80IB OF THE ACT. ASSESSMENT WAS FRAM ED UNDER SECTION 143(3) VIDE ORDER DATED 27.07.2007 WHEREIN ADDITION S TO THE EXTENT OF RS. 46 78 545/- WAS MADE BUT HOWEVER THE TAXABLE INCOME AFTER ALLOWING DEDUCTION UNDER 80IB REMAINED NIL. TAX WAS ACCORDIN GLY WORKED OUT ON BOOK PROFITS UNDER SECTION 115JB. THE ADDITION OF RS. 46 03 545/- MADE ON ACCOUNT OF UNACCOUNTED SALES WAS CONSIDERED FOR THE PURPOSE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) AND ASSESSING OF FICER VIDE ORDER DATED 17.03.2010 LEVIED THE PENALTY OF RS. 16 51 52 0/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER ASSESSEE CARRIED THE MA TTER BEFORE CIT(A) CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER B Y HOLDING AS UNDER:- WHEN THE AFORESAID IS CONSIDERED WITH THE FACTS A ND CIRCUMSTANCES OF THE APPEAL UNDER CONSIDERATION IT IS ABUNDANTLY CLEAR THAT IT IS A FACT THAT THE CENTRAL EXCISE DEPARTMENT DETECTED THE UNACCOUNTED SALES OF RS. 46 03 545/- DURING THE COURSE OF SEARCH CONDUCTED AT THE BUSINESS PREMISES OF THE AP PELLANT. IT IS ALSO A FACT THAT THE SAME HAS BEEN ADMITTED BY THE DIRECTOR OF THE APPEL LANT IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH. FURTHER IT IS ALSO A FACT THAT THE REVISED RETURN HAS BEEN FILED BY THE APPELLANT ONLY AFTER THE SEARCH IN THE GIVEN FACTS AND CIRCUMSTANCES; THE ASSESSING OFFICER HAS RIGHTLY COME TO THE CONCLUSIO N THAT THE APPELLANT HAS CONCEALED INCOME AND FURNISHED INACCURATE PARTICULARS OF INCO ME THEREBY HAS RIGHTLY IMPOSED THE MINIMUM PENALTY OF RS. 16 51 520/--U/S 271(1)( C ) OF THE I.T. ACT 1961. WITH THE RESULT THE ACTION OF THE ASSESSING OFFICER IS HERE BY CONFIRMED ON THIS ACCOUNT. ITA NO 829 & 2484/AHD/2010 . A.YS. 2005-0 6 & 2006- 07 3 5. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS N OW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-VI AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE PENA LTY OF RS. 16 51 520/- LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT 1961 BY THE AS SESSING OFFICER. 6. THE ASSESSEE HAS LATER ON RAISED THE ADDITIONAL GRO UND WHICH READS AS UNDER:- 1. THE LEARNED ASSESSING OFFICER HAS LEVIED PENALTY OF RS. 16 51 520/- U/S. 271(1)(C) HOLDING THAT THE APPELLANT HAD CONCEALED INCOME AS PER THE COMPUTATION OF REGULAR INCOME THOUGH THE INCOME IS ACTUALLY ASSESS ED U/S. 115JB OF THE ACT ACCEPTING THE RETURNED INCOME. BOTH THE GROUNDS ARE INTERCONNECTED AND THEREF ORE SAME ARE CONSIDERED TOGETHER. 7. BEFORE US THE LEARNED A.R. SUBMITTED THAT THE ENTI RE PROFITS OF THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER 80IB OF TH E ACT AND THAT EVEN AFTER THE ADDITIONS MADE DURING THE COURSE OF ASSES SMENT PROCEEDINGS THE TAXABLE INCOME OF THE ASSESSEE REMAINED NIL AND THE ASSESSEE WAS LIABLE TO PAY TAX ON THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT. IT WAS FURTHER SUBMITTED THAT SINCE THE TAX HAS BEEN PAID ON THE BASIS OF BOOK PROFITS NO PENALTY UNDER SECTION 271(1)(C) IS LEVI ABLE FOR WHICH RELIANCE WAS PLACED ON THE DECISION OF DELHI HIGH COURT IN T HE CASE OF CIT VS. NALWA SONS INVESTMENTS LTD. (2010) 327 ITR 543. SH E THUS SUBMITTED THAT THE PENALTY BE DELETED. 8. THE LEARNED D.R. ON THE OTHER HAND SUPPORTED THE OR DER OF ASSESSING OFFICER AND CIT(A). ITA NO 829 & 2484/AHD/2010 . A.YS. 2005-0 6 & 2006- 07 4 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE WAS TAXE D UNDER SECTION 115JB OF THE ACT AND NOT UNDER THE NORMAL PROVISIONS OF T HE ACT AS UNDER THE NORMAL PROVISIONS OF THE ACT NO TAX WAS PAYABLE BY THE ASSESSEE. IT IS ALSO A FACT THAT EVEN AFTER THE ADDITIONS OF RS. 46 LACS MADE IN THE QUANTUM PROCEEDINGS TAX WAS STILL PAYABLE ON THE B ASIS OF BOOK PROFITS. WE FIND THAT THE HON. DELHI HIGH COURT IN THE CASE OF CIT VS. NALWA SONS INVESTMENTS LTD. (SUPRA) HAS CONCLUDED THAT WH EN COMPUTATION OF INCOME WAS MADE UNDER SECTION 115JB AND CONCEALMENT IF ANY DID NOT LEAD TO TAX EVASION AT ALL AND THEREFORE PENALTY UN DER SECTION 271(1)(C) COULD NOT BE IMPOSED. THE HEAD NOTE IS REPRODUCED A S UNDER:- PENALTY UNDER SECTION 271(1)(C)- CONCEALMENT-ASSESS MENT UNDER SECTION 115JB VIS- -VIS LOSS UNDER NORMAL PROVISIONS ASSESSEES INC OME COMPUTED AS PER THE NORMAL PROCEDURE WAS LESS THAN THE INCOME DETERMINED BY LE GAL FICTION NAMELY BOOK PROFIT UNDER SECTION 115JB AND THUS INCOME WAS ASSESSEE U NDER SECTION 115JB AND NOT UNDER THE NORMAL PROVISIONS- THOUGH THERE WAS CONCE ALMENT IT HAD REPERCUSSION ONLY WHEN ASSESSMENT WAS MADE UNDER THE NORMAL PROC EDURE- ASSESSMENT AS PER THE NORMAL PROCEDURE WAS NOT ACTED UPON- IT IS THE DEEM ED INCOME UNDER SECTION 115JB WHICH HAS BECOME THE BASIS OF THE ASSESSMENT- THUS TAX WAS PAID ON THE INCOME ASSESSED UNDER SECTION 115JB-THEREFORE THE CONCEAL MENT DID NOT LEAD TO TAX EVASION AT ALL AND PENALTY UNDER SECTION 271(1)(C) COULD NO T BE IMPOSED IN RESPECT OF THE FALSE CLAIM OF DEPRECIATION. 10. BEFORE US THE REVENUE COULD NOT BRING ANY CONTRARY DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS AND RELYING ON THE AFORESAID DECISION OF DELHI HIGH COURT. WE ARE OF THE VIEW TH AT NO PENALTY IS LEVIABLE IN THE PRESENT CASE. THUS THE PENALTY IS D ELETED. ITA NO. 2484/AHD/2010 (FOR A.Y. 05-06) ITA NO 829 & 2484/AHD/2010 . A.YS. 2005-0 6 & 2006- 07 5 11. BEFORE US SINCE BOTH THE PARTIES SUBMITTED THAT TH E FACTS OF THE PRESENT CASE ARE IDENTICAL TO THAT OF A.Y. 05-06 EXCEPT FOR THE AMOUNTS AND SINCE BASED ON THE FACTS OF A.Y. 05-06 WE HAVE DELETED T HE PENALTY HEREINABOVE WE FOR SIMILAR REASONS IN THE PRESENT APPEAL ALSO HOLD THAT NO PENALTY IS LEVIABLE IN THE PRESENT CASE. IN VIEW OF THE AFORESAID FACTS WE DELETE THE PENALTY AND THUS THIS GROUND OF ASSES SEE IS ALLOWED. 12. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 04 - 10 - 2013. SD/- SD/- (D.K.TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AH MEDABAD