The ACIT,(OSD)Circle-8,, Ahmedabad v. Shilp Gravures Ltd.,, Ahmedabad

ITA 963/AHD/2012 | 2004-2005
Pronouncement Date: 31-07-2012 | Result: Dismissed

Appeal Details

RSA Number 96320514 RSA 2012
Assessee PAN AABCS0868G
Bench Ahmedabad
Appeal Number ITA 963/AHD/2012
Duration Of Justice 2 month(s) 28 day(s)
Appellant The ACIT,(OSD)Circle-8,, Ahmedabad
Respondent Shilp Gravures Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-07-2012
Assessment Year 2004-2005
Appeal Filed On 03-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE SHRI D. K. TYAGI JUDICIAL MEMBER AND SHRI T. R. MEENA ACCOUNTANT MEMBER I.T.A. NO.963 / AHD/2012 (ASSESSMENT YEAR 2004-05) ACIT (OSD) CIRCLE 8 AHMEDABAD VS. SHILP GRAVURES LTD. 101 KASHI PAREKH COMPLEX B/H BHAGWATI CHAMBERS C G ROAD NAVRANGPURA AHMEDABAD-380009 PAN/GIR NO. : AABCS0868G (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI C KMISHRA SR. DR RESPONDENT BY: SHRI R J SHAH AR DATE OF HEARING: 03.07.2012 DATE OF PRONOUNCEMENT: 31.07.2012 O R D E R PER SHRI T. R. MEENA AM:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE PENALTY ORDER DATED 02.02.2012 PASSED BY CIT(A) XIV AHMEDABAD FO R THE ASSESSMENT YEAR 2004-05. THE ONLY GROUND RAISED BY THE REVENU E IS THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENAL TY OF RS.3 75 023/- LEVIED U/S 271(1)(C) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AN D JOB WORK IN ELECTRONICALLY ENGRAVED COPPER ROLLERS. THE RETURN OF INCOME WAS FILED I.T.A.NO.963 /AHD/2012 2 ON 25.10.2004 DECLARING INCOME OF RS.15466000/- AFT ER CLAIMING DEDUCTION U/S. 80 HHC RS.280208/- AND DEDUCTION U/S 80 IB OF RS.6608098/- AS PER PRESCRIBED REPORTS OBTAINED FRO M CHARTERED ACCOUNTANT AS REQUIRED UNDER RESPECTIVE PROVISIONS OF THE ACT. THE ASSESSEE COMPANY CLAIMED FACTORY BUILDING REPAIRS E XPENSES OF RS.1903858/- AS PER AUDITED ACCOUNTS UNDER THE COMP ANIES ACT AND U/S.44AB OF IT ACT 1961 AS REVENUE EXPENDITURE. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. DISALLOWED THE ENT IRE FACTORY BUILDING REPAIRS EXPENSES OF RS.1903858/- AS CAPITAL EXPENDI TURE AND ALLOWED DEPRECIATION THEREON RS.188826/- AND ACCORDINGLY DI SALLOWED RS.1715032/- DISPUTED IN APPEAL. THE CIT APPEALS X IV ABD BY APPEAL ORDER DATED 19.2.2007 REDUCED THE DISALLOWANCES TO RS.754843/- AND GRANTED RELIEF OF RS.960189/- DULY CONFIRMED BY ITA T APPEAL ORDER DATED 22 06.2010. THE DEDUCTION CLAIMED U/S 80 HHC RS.28 0208/- BY ASSESSEE COMPANY AS PER PRESCRIBED REPORT IN FORM N O. 10 CCAC WAS REDUCED TO RS.179083/- BY A.O. AND DISALLOWED RS 10 1125/- WHICH WAS REDUCED IN APPEAL TO RS.14503/-AS PER CIT APPEALS O RDER BUT ENHANCED TO RS.827'88/- AS PER ITAT ORDER N ITA N0.1921/ABD/ 2007 DATED 22.06.2010. SIMILARLY DEDUCTION CLAIMED U/S. 80 IB RS.6608098/- BY ASSESSEE AS PER PRESCRIBED REPORT IN FORM NO. 10 CC B WAS REDUCED TO RS.207731/ - DULY CONFIRMED IN APPEAL. THE A.O. HAD INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C)BY NOTICE DATED 29.12.200 6 FOR EITHER CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSEE COMPANY SUBMITTED REPLY UN DER COVER OF LETTER DATED 28.01.2008 AND 29.01.2008 SUBMITTING THAT THE RE IS NEITHER CONCEALMENT NOR INACCURATE PARTICULARS OF INCOME FI LED IN RESPECT OF DISALLOWANCES ON ACCOUNT OF BUILDING REPAIRS EXPENS ES DULY CAPITALIZED I.T.A.NO.963 /AHD/2012 3 AND DISALLOWANCES U/S. 80 IB AND 80 HHC. THE A.O. BY ORDER U/S. 271(1)(C) DATED 28.01.2011 LEVIED PENALTY OF RS.375 023/- ON THE GROUND THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICUL ARS OF INCOME. THE ITO HAS STATED 'CONSIDERING THE DECISION OF THE CIT APP EALS AND HON'BLE ITAT AHMEDABAD THE DISALLOWANCES MADE BY THE A.O. WERE CONFIRMED THOUGH IN PART OR IN FULL THUS IT IS ESTABLISHED THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME' AND TREATED THE S AME AS FURNISHING INACCURATE PARTICULARS OF INCOME AND LEVIED THE PEN ALTY U/S 271(1)(C) OF THE ACT. 3. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO HAS DELETED THE PENALTY BY OBSERVING AS UNDER: I HAVE CAREFULLY CONSIDERED THE PENALTY ORDER AND THE SUBMISSION MADE BY THE APPELLANT DURING THE COURSE OF APPELLAT E PROCEEDINGS. THE A. O. HAS LEVIED THE PENALTY U/S. 271(L)(C) OF THE ACT AS CERTAIN DISALLOWANCES WERE MADE IN VARIOUS CLAIMS MADE BY T HE APPELLANT. THERE WERE THREE TYPES OF ADDITIONS / DISALLOWANCES THAT WERE MADE BY THE A. O. WHICH ARE AS UNDER: DISALLOWANCE ON ACCOUNT OF REPAIR EXPENSES CAPITALI SED DISALLOWANCE U/S. 80IB DISALLOWANCE U/S. 80HHC. TH E CIT(A) PARTLY CONFIRMED THE DISALLOWANCES AND THE ITAT UPH ELD THE ORDER OF THE CIT(A). THE FACTS SHOW THAT THE APPELL ANT HAD GIVEN A\\ THE MATERIAL INFORMATION RELATED TO THE ABOVE CLAI MS IN THE RETURN OF INCOME. THE A. O. MADE THE ADDITION AS HE DID NO T CONSIDER THE CLAIMS MADE BY THE APPELLANT ADMISSIBLE. HE T REATED THE BUILDING EXPENSES WHICH WERE CLAIMED BY THE APPEL LANT AS REVENUE ITEM AS CAPITAL IN NATURE AND ACCORDINGLY DISALLOWED THE EXPENDITURE AND ALLOWED THE DEPRECIATION ON THE CAP ITALISED EXPENSES. HOWEVER I DO NOT SEE ANY FINDING REGARDI NG THE FACT THAT ANY PART OF THE EXPENDITURE THAT WAS CLAIMED WAS NO T GENUINE OR SOME INACCURATE PARTICULARS HAVE BEEN FURNISHED REL ATED TO THOSE EXPENSES. SIMILARLY THE DEDUCTION U/S. 80IB AND 80 HHC WERE REWORKED BY THE A. O. AS CERTAIN INCOME WAS NOT CON SIDERED AS INCOME DERIVED FROM INDUSTRIAL UNDERTAKING FOR DEDU CTION U/S. 80IB. THE DEDUCTION U/S. 80HHC WAS ALSO FOUND NOT I N ORDER AND WAS REWORKED AND THE DEDUCTION WAS ACCORDINGLY REDU CED. I.T.A.NO.963 /AHD/2012 4 HOWEVER IN THESE DISALLOWANCES ALSO THERE IS NO FI NDING SHOWING THE FACT THAT THE CLAIM MADE BY THE APPELLANT CONTA INED INACCURATE PARTICULARS OR ANY INFORMATION SUBMITTED BY THE APP ELLANT HAS BEEN FOUND TO BE FALSE BY THE A. O. THEREFORE THERE IS NO FURNISHING OF INACCURATE PARTICULARS ON THE PART OF THE APPELLANT AND IN THE CIRCUMSTANCES THE DECISION OF HONOURABLE SUPREME CO URT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD REPORTED I N 322 ITR 158 IS CLEARLY APPLICABLE. ACCORDING TO THE DECISION WHER E THERE IS NO FINDING THAT ANY DETAILS WERE SUPPLIED BY THE ASSES SEE IN ITS RETURN OF INCOME FOUND TO BE INCORRECT OR ERRONEOUS OR FAL SE THERE WAS NO QUESTION OF INVOKING THE PENALTY UNDER SECTION 271( 1)(C). MERE MAKING OF CLAIM WHICH IS NOT SUSTAINABLE IN LAW B Y ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. IN THESE CIRCUMSTANCES I AM OF TH E CONSIDERED OPINION THAT NO PENALTY IS EXIGIBLE ON THE APPELLAN T U/S.271 (1)(C) OF THE ACT. ACCORDINGLY THE PENALTY IMPOSED BY THE A. O. IS DELETED AND THE APPEAL IS ALLOWED. 4. NOW THE REVENUE IS BEFORE US AGAINST DELETION O F THE PENALTY BY LD. CIT(A) & RELIED ON ORDER OF THE A.O. 5. LD. COUNSEL FOR THE ASSESSEE CONTENDED BEFORE US THAT LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY U/S 271(1)(C) OF TH E ACT AND REITERATED WRITTEN SUBMISSION AS UNDER: THE PENALTY U/S. 271(1)(C) IN THE FACTS OF THE CASE AS ABOVE AND IN LAW IS NOT LEVIABLE ON FOLLOWING GROUNDS: A) THE ASSESSEE IS A PUBLIC LIMITED COMPANY. THE A CCOUNTS ARE DULY AUDITED UNDER THE COMPANIES ACT UNDER THE INCO ME-TAX ACT U/S 44AB DULY APPROVED BY THE MANAGEMENT AUDITORS AND SHAREHOLDERS. B) THE ORDER U/S. 271(1)(C) IS BASED ON FILING INA CCURATE PARTICULARS OF INCOME WHILE THE NOTICE IS ISSUED ON THE BASIS OF UNCERTAIN SATISFACTION AS TO FOR WHICH DEFAULT WHET HER FOR CONCEALMENT 'OR FOR FURNISHING INACCURATE PARTICULA RS OF INCOME IS NOT MADE CLEAR. THE ASSESSEE COMPANY RELIES ON IN THE CASE OF CIT V /S. LAKHDHIR LALJI REPORTED IN 85 ITR PAGE 77 (GUJARAT). C) BOTH THE CLAIMS U/S. 80 HHC AND U/S. 80 IB ARE BASED ON EXPERTS REPORTS IN PRESCRIBED FORM AS REQUIRED UNDE R THE PROVISIONS I.T.A.NO.963 /AHD/2012 5 OF IT ACT 1961 AND SUCH BONAFIDE CLAIMS CANNOT BE CONSIDERED EITHER AS CONCEALMENT OR FURNISHING INACCURATE PART ICULARS OF INCOME. D) DISALLOWANCES OF ENTIRE FACTORY BUILDING EXPENSE S OF RS.1903858/- BY A () REDUCED TO RS.754843/- BY CIT APPEALS XIV ABD ALLOWING DEPRECIATION EN SUCH PORTION OF D ISALLOWANCES CANNOT BE TREATED AS FURNISHING OF INACCURATE PARTI CULARS OF INCOME. IT IS A MATTER OF OPINION AGAINST THE BONAFIDE CLAI M MADE BY THE APPELLANT. THE ASSESSEE RELIES ON IN THE CASE OF CI T V/S. KRISHNA MARUTI LIMITED DELHI REPORTED IN 330 ITR PAGE 547 (DELHI). THE A.O. IN PENALTY ORDER U/S. 271(1)(C) DATED 28.0 1 2011 HAS MENTIONED THAT CONSIDERING THE DECISION OF THE CIT APPEALS AND THE HON'BLE ITAT. THE DISALLOWANCES MADE BY THE A.O WERE CONFIRMED THOUGH IN PART OR IN FULL. THUS IT IS ES TABLISHED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. THE A.O. HAS FURTHER COMMITTED AN ERROR IN MENTIONING THAT T HE FINDING OF THE CIT APPEALS AND THE FINDING OF HON'BLE ITAT CLEARLY PROVE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F INCOME. THE APPELLANT SUBMITS THAT THE CIT APPEALS OR HON'BLE I TAT HAVE NO WHERE MENTIONED THAT ASSESSEE HAS FURNISHED INACCUR ATE PARTICULARS OF INCOME. E) THE ASSESSEE FURTHER RELIES UPON THE FOLLOWING CASE LAWS: I. 291 ITR PAGE 519 DILIP & SHROFF V/S. JCIT. II. 292 ITR PAGE 11 ASHOK PAI V/S. CIT. III. 317 ITR PAGE 1 (SC) CIT V/S. ATUL MOHAN BINDAL . IV. 322 ITR PAGE 158 (SC) CIT V/S. RELIANCE PETRO P RODUCTS PRIVATE LIMITED V. 340 ITR PAGE 204 CIT V/S. H.P. STATE FOREST CORP ORATION LIMITED. THE APPELLANT PRAYS THAT PENALTIES ARE NOT LEVIABLE ON ITEMS OF DISALLOWABLE NATURE MUCH LESS EITHER CONCEALED OR I NACCURATE PARTICULARS OF INCOME FILED. IN THE FACTS OF THE CA SE AS ABOVE PENALTY OF RS.375023/- BE THEREFORE DELETED. 6. WE HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS THE PENALTY ORDER AND ALSO THE APPELLATE ORDER AND HEARD THE ARGUMENT S OF BOTH THE SIDES. IN THIS CASE THREE DISALLOWANCES WERE MADE BY THE A.O . WHICH HAVE BEEN CONFIRMED BY ITAT VIZ. I) DISALLOWANCE ON ACCOUNT O F REPAIR EXPENSES ON BUILDING II) DISALLOWANCE U/S 80-IB AND III) DISAL LOWANCE OF DEDUCTION U/S I.T.A.NO.963 /AHD/2012 6 80HHC. THE A.O. HAD SIMPLY INITIATED THE PENALTY P ROCEEDINGS U/S 271(1)(C) OF THE ACT WITHOUT MENTIONING WHETHER THE PENALTY WAS INITIATED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCUR ATE PARTICULARS OF INCOME. THE BUILDING EXPENSES CLAIMED BY THE ASSES SEE WERE DISALLOWED BY THE A.O. WHICH WERE CAPITALIZED AND DEPRECIATIO N WAS ALLOWED BY THE A.O. DEDUCTION U/S 80-IB AND 80HHC WERE CLAIMED IN PRESCRIBED PROFORMA ON THE BASIS OF AUDIT REPORT IN THE RETURN OF INCOME. THE A.O. RECALCULATED BOTH THE DEDUCTIONS ACCORDING TO HIM B UT PARTICULARS OF INCOME AND/OR CONCEALMENT OF INCOME HAS NOT BEEN B ROUGHT ON RECORD BY THE A.O. WHICH IS AN ESSENTIAL INGREDIENT TO LEVY PENALTY U/S 271(1)(C) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE RELIED U PON VARIOUS CASE LAWS AND IN PARTICULAR ON THE DECISION OF HONBLE APEX C OURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. (SUPRA) WHEREIN THE H ONBLE SUPREME COURT HAS DELETED THE PENALTY LEVIED ON MAKING INCORRECT CLAIM WHICH WAS CONFIRMED BY APPELLATE AUTHORITY. SINCE THE FACTS OF THE PRESENT CASE ARE SIMILAR THEREFORE WE CONFIRM THE ORDER OF LD. CIT (A). 7. IN THE RESULT APPEAL OF THE REVENUE STANDS DISM ISSED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (D. K. TYAGI) (T. R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD BY ORDER 6. THE GUARD FILE AR ITAT AHMEDABAD I.T.A.NO.963 /AHD/2012 7 1. DATE OF DICTATION 30/07 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30/07.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 31/07 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.31/07 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31/07/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .