The ACIT,(OSD)-I,Range-4,, Ahmedabad v. Jay Chemical Industies Ltd.,, Ahmedabad

ITA 957/AHD/2010 | 2004-2005
Pronouncement Date: 30-07-2010 | Result: Dismissed

Appeal Details

RSA Number 95720514 RSA 2010
Assessee PAN AAACJ1628J
Bench Ahmedabad
Appeal Number ITA 957/AHD/2010
Duration Of Justice 3 month(s) 30 day(s)
Appellant The ACIT,(OSD)-I,Range-4,, Ahmedabad
Respondent Jay Chemical Industies Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 30-07-2010
Date Of Final Hearing 16-07-2010
Next Hearing Date 16-07-2010
Assessment Year 2004-2005
Appeal Filed On 31-03-2010
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI MUKUL SHRAWAT JM AND D.C.AGRAWAL AM ASSTT. CIT (OSD)-1 RANGE-4 AHMEDABAD NAVJIVAN TRUST BLDG. OFF ASHRAM ROAD AHMEDABAD. VS. JAY CHEMICAL INDUSTRIES LTD. JAY HOUSE PANCHWATI CIRCLE AMBAWADI AHMEDABAD. PAN AAACJ 1628J (APPELLANT) .. (RESPONDENT) REVENUE BY :- SHRI K. M. MAHESH SR. D.R. ASSESSEE BY:- SHRI NIMESH VAYAWALA AR O R D E R PER D. C. AGRAWAL ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE RAISING FOL LOWING GROUND:- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS DELETI NG THE PENALTY OF RS.13 32 290/- AS CORRECTLY WORKED OUT BY THE AO . 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS DELETI ON OF PENALTY OF RS.13 32 290/- LEVIED BY THE AO U/S 271(1)(C). 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT ING OF DYES CHEMICALS AND INTERMEDIATES. THE RETURN OF INCOME W AS FILED ON A TOTAL INCOME OF RS.1 50 04 060/- BUT THE ASSESSMENT WAS M ADE AT RS.3 32 37 784/- WHICH INCLUDED DISALLOWANCE OF THE CLAIM OF DEDUCTION UNDER SECTION 80 HHC FOR RS.37 13 701/-. THE MATTER WENT IN APPEAL ITA NO.957/AHD/2010 ASST. YEAR :2004-05 2 BEFORE THE LD. CIT(A) WHERE THE DISALLOWANCE WAS C ONFIRMED AND THEREFORE THE AO PROCEEDED TO LEVY PENALTY UNDER S ECTION 271(1)(C). IN RESPONSE TO SHOW CAUSE NOTICE BEFORE LEVY OF PENALT Y THE ASSESSEE DID NOT FURNISH ANY REPLY. THE AO ACCORDINGLY LEVIED THE PE NALTY OF RS.13 32 290/-. 4. THE LD. CIT(A) HOWEVER CANCELLED THE PENALTY H OLDING THAT MERELY BECAUSE CLAIM IS NOT SUSTAINABLE PENALTY CANNOT BE LEVIED. HE REFERRED TO SEVERAL DECISIONS IN SUPPORT OF HIS CONTENTION. THE REVENUE IS IN APPEAL AGAINST THIS DECISION. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THER E IS NO CASE FOR INTERFERENCE IN THE DECISION OF LD. CIT(A). THE ADD ITION WAS MADE BY DISALLOWING DEDUCTION UNDER SECTION 80 HHC ON THE G ROUND THAT ASSESSEE HAS EXCLUDED THE EXCISE DUTY FROM TOTAL TURNOVER AN D CERTAIN OTHER INCOME WERE INCLUDED IN THE PROFITS OF THE BUSINESS. THE A O RECALCULATED THE ALLOWABLE DEDUCTION UNDER SECTION 80 HHC. PENALTY W AS LEVIED IN RESPECT OF THE PART OF DISALLOWANCE MADE BY THE AO. THE LD. CIT(A) CANCELLED THE PENALTY BY HOLDING THAT THERE IS NO CONCEALMENT OF INCOME OR FILING OF ANY INACCURATE PARTICULARS OF INCOME. FURTHER NONE OF T HE INGREDIENTS OF EXPLANATIONS ARE SATISFIED. MERE REJECTION OF THE C LAIM IS NOT EQUAL TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. WHE N LEGAL CLAIM IS MADE AND IT IS ULTIMATELY FOUND NOT ACCEPTABLE THEN IT W OULD NOT BE EQUAL TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. CIT(A) REFERRED TO THE FOLLOWING DECISIONS:- (1) ITAT PUNE A BENCH IN THE CASE OF KANMAY SOFTWARE INDIA (P) LTD. VS. DCIT IN ITA NO.300/PN/07-ASST. YEAR 20 02-03 (2) SHIV LAL TAK VS. CIT 251 ITR 373 (RAJ) (3) CIT VS. BACARDI MARTINI INDIA 288 ITR 585 (DEL) 3 (4) CIT VS. HARSHVARDHAN CHEMICALS & MINERALS LTD. 259 ITR 212 (RAJ) (5) GUJARAT CREDIT CORPORATION LTD. VS. ACIT 113 ITD 13 3 6. THE LD. AR HAS POINTED OUT THAT SIMILAR DISALLOW ANCE OF DEDUCTION U/S 80 HHC WAS DONE IN ASST. YEAR 2001-02 ALSO AND AO LEVIED THE PENALTY IN THAT YEAR. IT WAS CANCELLED BY THE TRIBU NAL IN ITA NO.2515/AHD/2006 PRONOUNCED ON 27 TH FEBRUARY 2009. SINCE PENALTY WAS CANCELLED IN ASST. YEAR 2001-02 IN RESPECT OF D EDUCTION DISALLOWED THEN IN ASST. YEAR 2004-05 ALSO PENALTY COULD NOT B E LEVIED FOR DISALLOWING THE CLAIM OF DEDUCTION U/S 80 HHC. HON. SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS 322 IT R 158 (SC) HAS HELD THAT PENALTY CANNOT BE IMPOSED EVEN FOR MAKING ANY SUSTAINABLE CLAIM. IT HAS TO BE SEEN WHETHER DETAILS GIVEN IN THE RETURN ARE ACCURATE OR NOT. THE WORDS INACCURATE PARTICULARS WOULD MEAN THAT DETA ILS SUPPLIED IN THE RETURN ARE NOT ACCURATE EXACT AND CORRECT AND NOT ACCORDING TO TRUTH OR ARE ERRONEOUS. UNLESS A FINDING IS GIVEN ABOUT THES E DETAILS IN THE RETURN OF INCOME PENALTY U/S 271(1)(C) CANNOT BE LEVIED. O N MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN THE LAW BY ITSELF WILL NOT MEAN TO FURNISH OF INACCURATE PARTICULARS REGARDING INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE WE UPHOLD THE ORDER OF LD. CIT(A ) AND DISMISS THE APPEAL FILED BY THE REVENUE. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 30/7/2010 SD/- SD/- (MUKUL SHRAWAT) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 30/7/2010 MAHATA/- 4 COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD