Income Tax Appellate Tribunal - Mumbai
Sulzer India Ltd, Pune vs Assessee on 13 September, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH 'E' MUMBAI
BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND
SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
ITA No.1692/Mum/2009
Assessment Year-2003-04
M/s. Sulzer India Ltd., The DCIT, Range 8(3),
"Sulzer House", Baner Road, Mumbai
Aundh,
Pune-411 007 Vs.
PAN-AAACS 7876D
(Appellant) (Respondent)
Appellant by: Shri Ronak G. Doshi
Respondent by: Shri Girija Dayal
Date of Hearing :13.09.2012
Date of pronouncement:
ORDER
PER N.K. BILLAIYA, AM:
This present appeal by the assessee is directed against the order of Ld. CIT(A)-XXIX, Mumbai dt.24.2.2009 pertaining to assessment year 2003-04. The sole grievance of the assessee is that the Ld. CIT(A) erred in upholding the action of DCIT in levying penalty u/s. 271(1)(c) of the Act amounting to Rs. 1,62,89,080/-.
2. The roots for the levy of penalty u/s. 271(1)(c) lie in the assessment order wherein the following additions/disallowances were made while completing the assessment order.
1. Depreciation Rs. 31,144/-
2. Membership expenses Rs. 2,17,007/-
3. Remission on liability on Rs. 4,14,87,985/-
premature repayment of deferred sales tax
4. Reduction in deduction u/s. Rs. 25,87,900/-
80HHC 2 The Penalty has been imposed on the aforementioned additions confirmed by the Ld. CIT(A) in the quantum appeal.
3. At the very outset, the Ld. Counsel for the assessee drew our attention to the order of the Tribunal in 1TA Nos. 2871 & 2944/M/07 against the quantum appeal and pointed out that the issue related to the disallowance of depreciation to the extent of 20% has been decided in favour of the assessee by the Tribunal in the aforementioned appeal.
4. We have considered the submission and perused the order of the Tribunal. We find that at para 43, the Tribunal has set aside the order of the Ld. CIT(A) and directed the AO to allow depreciation as claimed by the assessee at the rate of 40% as the additions have been deleted by the Tribunal, penalty to that extent is cancelled. The Ld. Counsel proceeded to submit that the issue relating to the disallowance of Club Membership fees has been decided in favour of the assessee by the Tribunal in the aforementioned said order. A perusal of the order of the Tribunal shows that the issue has been dealt at paras-45 to 55 of the Tribunal's order.
5. After considering the facts and the submissions, the Tribunal has thus held that "we therefore reverse the findings of the Revenue authorities and set aside the order of the Ld. CIT(A) and direct the AO to allow the expense "Club Membership' . As the impugned addition has been deleted, we do not find any reason to confirm the penalty on this account.
6. The next addition on which the penalty has been levied relates to remission on liability on pre-matured repayment of deferred sales-tax.
7. The Ld. Counsel for the assessee pointed out that this addition has also been deleted by the Tribunal in the aforementioned order of the Tribunal. A perusal of the said order of the Tribunal show that this issue has been dealt by the Tribunal at Paras 57 to 61 wherein the Tribunal has followed the decision of the Special Bench in assessee's own case reported in 6 ITR 604 3 (Trib). The Tribunal has further relied upon the decision in the case of DCIT Vs Sterlite Industries in ITA No. 7136 & 7177/M/04. We also find that the Tribunal has further relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. Pouni Sugar & Chemicals Ltd. reported in 306 ITR 392(SC) and deleted the impugned addition. As the said addition has been deleted by the Tribunal, levy of penalty cannot be justified.
8. The last addition on which the penalty has been levied relates to reduction in deduction u/s. 8OHHC of the Act.
9. The Ld. Counsel for the assessee pointed out that this issue in the quantum appeal has been restored back to the file of the AO to decide in line with the decision taken in the preceding assessment years i.e. A.Yrs 2001-02 and 2002-03. The Ld. Counsel further pointed out that in the preceding assessment years also the issue has been restored back to the files of AO keeping in view of the decision of the Hon'ble Supreme Court in the case of M/s. ACG Associates Capsules Pvt. Ltd. Vs CIT 343 1TR 89.
10. We have considered the submissions made by the assessee's counsel and perused the order of the Tribunal in 1TA No. 2871 & 2944/M/07 (supra). As the quantum addition has been restored back to the file of the AO on this account, the issue of levy of penalty is also restored back to the file of AO to be decided after the fate of the quantum.
11. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced on this 26th day of September, 2012 Sd/- Sd/-
(D.K. AGARWAL) (N.K. BILLAIYA )
Judicial Member Accountant Member
Mumbai, Dated 26th September, 2012
Rj
4
Copy to :
1. The Appellant
2. The Respondent
3. The CIT-concerned
4. The CIT(A)-concerned
5. The DR 'E' Bench
True Copy
By Order
Asstt. Registrar, I.T.A.T, Mumbai