Jbf Industries Ltd, Mumbai vs Department Of Income Tax

IN THE INCOME TAX APPELLATE TRIBUNAL "J" BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER आयकर अपीऱ सं./I.T.A. No.6043/M/2011 (निर्धारण वर्ा / Assessment Year: 2005-2006) ACIT- Circle 4(2), बनाम/ JBF Industries Ltd., th R.No.642, 6 Floor, Aayakar JBF House Old Post Office Vs. Bhavan, M.K. Road, Mumbai -20. Lane, Kalbadevi Road, Mumbai - 400 002. स्थायी ऱेखा सं ./ PAN : AAACJ2575J (अपीऱाथी /Appellant) .. (प्रत्यथी / Respondent)

अपीऱाथी की ओर से / Appellant by : Shri Hari Govind Singh, DR

प्रत्यथी की ओर से/ Respondent by : Dr. K. Shivaram and Rabhul R Sarda

सुनवाई की तारीख / Date of Hearing : 12.2.2015 घोषणा की तारीख /Date of Pronouncement : 20 .2.2015 आदे श / O R D E R

PER D. KARUNAKARA RAO, AM:

This appeal filed by the Revenue on 30.08.2011 is against the order of the CIT (A)-8, Mumbai dated 7.6.2011 for the assessment year 20056-06. In this appeal, Revenue raised the following grounds which read as under:

"1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in cancelling the penalty of Rs. 93,80,870/- levied u/s 271(1)(c) of the Act.

2. On the facts and in the circumstances of the case, the impugned order of the CIT (A) is contrary to law to be set aside and that of the Assessing Officer be restored."

2. Briefly stated relevant facts of the case are that the assessee filed the return of income declaring the total income of Rs. 47,59,14,661/- u/s 115JB of the Act. Assessment was completed u/s 143(3) of the Act determining the total income of Rs. 2,70,44,861/-. In the assessment, Assessing Officer made various additions and they include (i) 33,02,458/- on account of depreciation on leased income; (ii) Rs. 1,94,44,448/- on account of disallowance of lease rent; (iii) Rs. 8,52,500/- on 2

account of depreciation on electrical fittings and (iv) Rs. 19,00,000/- u/s 40A(2)(b) of the Act. Eventually, the assessed income was computed under section 115JB of the Act. Thus, Assessing Officer after satisfying himself that the assessee concealed its income / furnished inaccurate particulars within the meaning of section 271(1)(c) of the Act, initiated the penalty proceedings under the said section and issued the order u/s 271(1)(c) of the Act on 29.3.2010. Aggrieved, assessee carried the matter in appeal before the first appellate authority.

3. During the proceedings before the first appellate authority, after considering the submissions made by the assessee, CIT (A) allowed the assessee's appeal. Aggrieved with the said decision of the CIT (A), Revenue is in appeal before the Tribunal by raising the above mentioned grounds.

4. Before us, Ld DR relied on the order of the Assessing Officer.

5. On the other hand, Ld Counsel for the assessee heavily relied on the order of the CIT (A) and reiterated the submissions made before the lower authorities. Further, Ld Counsel brought our attention to the order of the Tribunal in the case of ITO vs. M/s. Vasant Investment Corporation Ltd vide ITA No.1146/M/2012 (AY 2006- 2007), dated 5.6.2013 and mentioned that the similar issue came up before the Tribunal and the same was decided in favour of the assessee by holding that the penalty provisions do not attract when the assessment was made on income computed under section 115JB and the tax had been paid on income so computed.

6. We have heard both the parties, perused the orders of the Revenue Authorities as well as the cited order of the Tribunal in the case of M/s. Vasant Investments Corporation Ltd. On perusal of the said order of the Tribunal (supra) dated 5.6.2013, wherein one of us (AM) is a party to the said Tribunal's order, we find para 8 is relevant in this regard. For the sake of completeness of this order, the said para 8 of the Tribunal's order dated 5.6.2013 is extracted as under:

"8. We have heard both the parties, perused the orders of the Revenue Authorities and the material placed before us. We have also examined the cited decisions by the Ld Counsel. Undisputedly, the AO made the assessment under the provisions of section 115JB of the Act and not under the normal provisions. Regarding the nature of additions, it is a fact that the assessee made certain claims in the return, before revising the them by way of filing revised computation of income, which are prima facie not allowable as per the provisions of the Act. Of course, the assessee withdrew the said claims after they are pointed out to the assessee. All these issues become irrelevant in view of the Hon'ble Supreme Court judgment in the case of CIT vs. Nalwa Sons Investment Ltd (supra). It is a settled at the level of the Apex court that penalty was not attracted in respect of the additions made in the assessment by 3

the AO under MAT provisions. The legal propositions mentioned in para 5 above apply here. Therefore, we are of the considered opinion that this is not a fit case for invoking the provisions of section 271(1)(c) of the Act. Therefore, we find no infirmity in the order of the CIT (A) and the same does not call for any interference. Accordingly, grounds raised by the Revenue are dismissed."

7. Considering the settled nature of the issue by the orders of the Tribunal as well as the judgments of the higher judiciary, we are of the opinion that it is not a fit case to levy penalty u/s 271(1)(c) of the Act. The additions made under MAT provisions do not attract concealment penalty. Therefore, the decision taken by the CIT (A) is fair and reasonable. Thus, we find no infirmity in the order of CIT (A) and the same does not call for any interference. Accordingly, grounds raised by the Revenue are dismissed.

8. In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on 20th February, 2015.

Sd/- Sd/-

(VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER मुंबई Mumbai; ददनांक 20.2.2015 व.नन.स./ OKK , Sr. PS आदे श की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : 1. अपीऱाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त(अपीऱ) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. DR ITAT, Mumbai 6. गार्ड फाईऱ / Guard file.

सत्यापपत प्रनत //True Copy// आदे शानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीऱीय अधिकरण, मुंबई / ITAT, Mumbai