9911796707
TMI Blog2015 (6) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The brief facts of the case are: The assessee is engaged in the business of manufacturing and sale of Pan Masala and Gutka. The assessee had set up its manufacturing undertakings at Godnadi, Pune, Baroda and Hyderabad. The assessee had claimed deduction u/s. 80I of the Act in respect of profits derived from its undertakings at Godnadi and Pune and u/s. 80IA of the Act in respect of profits derived from its undertakings at Baroda and Hyderabad. The Revenue allowed deduction to the assessee in respect of profits derived from manufacturing and sale Pan Masala. However, the claim of deduction in respect of profits derived from manufacturing and sale of Gutka was denied to the assessee. In the first appeal, the Commissioner of Income Tax (Appeals) for the assessment years 1994-95, 1995-96, 1997-98 to 2000-01 the Commissioner of Income Tax (Appeals) allowed the claim of the assessee. The assessee was held to be eligible for deduction u/s. 80I and 80IA on manufacturing and sale of Gutka. The Revenue filed appeal before the Tribunal. The Tribunal set aside the order of Commissioner of Income Tax (Appeals) in the assessment years 1994-95, 1995-96, 1997-98 to 2000-01. In the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order in subsequent assessment year initiated penalty proceedings u/s. 271(1)(c) of the Act for concealing income. The second limb of depreciation claim is that the assessee inadvertently claimed 100% rate of depreciation in assessment year 2003-04 on windmill. The rate of depreciation was reduced to 80% w.e.f. assessment year 2003-04. The mistake in claiming higher rate of depreciation was pleaded as bonafide. 6. On all the above three counts, the Assessing Officer levied penalty. Aggrieved by the penalty orders u/s. 271(1)(c) for the assessment year 2003-04, the assessee preferred appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide order dated 20-02-2009 deleted penalty with respect to deduction claimed by the assessee u/s. 80I and 80IA and receipts by way of sales tax incentive. However, the Commissioner of Income Tax (Appeals) upheld the penalty with respect to assessee's claim of depreciation on windmills. In the assessment years 2004-05 and 2005-06 the penalty was levied only on account of assessee's claim of deduction u/s. 80I and 80IA of the Act and receipt of sales tax incentive. The Commissioner of Income Tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% on windmills. The rate of depreciation was reduced from 100% to 80% in assessment year 2003-04. It was mere calculation error. The mistake is bonafide. In support of his submissions the ld. AR placed reliance on the decision of Hon'ble Supreme Court of India in the case of Price Waterhouse Coopers (P.) Ltd. Vs. CIT reported as 348 ITR 306 (SC). 10. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. We have also examined the decisions on which the ld. AR has placed reliance in support of his contentions. The penalty has been levied on the assessee in assessment years 2003-04, 2004-05 and 2005-06 in respect of additions/disallowance made on account of: i. Deduction claimed u/s. 80I and 80IA on manufacturing and sale of Gutka; ii. Treating sales tax incentive as capital receipt; iii. Claiming of higher rate of depreciation on structure ancillary to windmills; and iv. Claiming 100% rate of depreciation on windmill instead of 80%. The Commissioner of Income Tax (Appeals) has deleted the levy of penalty in respect of first two issues raised in all the three impugned assessment years. However, the thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of CIT Vs. M/s. Nayan Builders and Developers (supra). The relevant extract of the order of the Tribunal deleting penalty reads as under: "4. After going through the rival submissions and perusing the material on record, we are not inclined to interfere with the finding of the CIT(A) who has deleted the penalty in question for both the years. The assessee is engaged in the business of manufacturing and sale of Pan Masala and Gutka. For this purpose, it has manufacturing undertaking at difference places. As discussed above, deduction u/s 80-I and 80-IA was claimed in respect of products derived from its undertaking which was denied by the Assessing Officer on the ground that the product manufactured by the assessee viz. gutka or pan masala are tobacco preparations as envisaged under item N o. 2 of Eleventh Schedule of the Act and therefore, not eligible for deduction u/s 80-I and 80-IA of the Act which excludes deduction in respect of items enlisted in the eleventh schedule. Consequently, penalty was also initiated under the provisions of section 271(1)(c) of the Act. However, in quantum proceedings, the CIT(A) granted relief which was reversed by the Tribunal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had claimed higher rate of depreciation in the assessment year 2002-03 which was disallowed. The Revenue had not imposed any penalty on the said disallowance. In the assessment order for assessment year 2003-04 identical reasons have been given for disallowing the higher rate of depreciation. Therefore, penalty cannot be levied on same set of facts in the immediately succeeding assessment year. The contention of the ld. AR is that the claim of higher rate of depreciation is bonafide mistake. In support of his submissions reliance has been placed on the decision of Hon'ble Supreme Court of India in the case of Price Waterhouse Coopers (P.) Ltd. Vs. CIT (supra). 16. We find force in the submissions of the ld. AR. No penalty was levied by the Assessing Officer on similar disallowance in the preceding assessment year, therefore, the penalty cannot be levied in succeeding assessment year for the same disallowance. The Co-ordinate Bench of the Tribunal in ITA No. 957/PN/2011 in the case of Shri C.P. Mohandas Vs. DCIT decided on 29-05-2015 has deleted the penalty on similar grounds. The relevant extract of the order of Co-ordinate Bench of the Tribunal is produced as under: "26. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents before us, were clearly the same so far as the question of declaration was concerned. On one set of facts, in one year, the penalty is dropped, and for the remaining years, the penalties are imposed, are pointed out, for this reason alone, penalties imposed are not sustainable in law." 6. We have no reasons to take any other view of the matter than the view so taken by a co ordinate bench. The material facts being identical inasmuch as on similar set of facts, as were before the Assessing Officer in this year, the penalty proceedings have been dropped for other years, we hold that it was not a fit case for imposition of penalty. The CIT(A) ought to have deleted the same. In any event, even on merits, since assessee had disclosed all material facts by way of a note attached to the income tax return, it cannot be said to be a case of concealment of income or furnishing of inaccurate particulars. Bearing in mind these facts, as also entirety of the case, we deem it fit and proper to delete the impugned penalty of Rs. 95,39,005. The assessee gets the relief accordingly." 27. Since in the instant case the AO has not levied any penalty u/s.271(1)(c) of the I.T. Act on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
