SHIVOM COTSPIN LIMITED,KALA AMB vs. DCIT, CIRCLE, PARWANOO

आदेश/Order

Per Sanjay Garg, Judicial Member:

The captioned appeals have been preferred by the assessee against the common order dated 30.01.2018 of the Commissioner of Income Tax (Appeals), Shimla. [hereinafter referred to as ‘CIT(A)’].

ITA Nos. 298 & 299/Chd/2019- M/s Shivam Cotspin Limited, Sirmour 2 identical, hence, these were heard together and are being disposed off by

this common order.

applications for condonation of delay have been filed which are further

supported with the Affidavit of the Director of the company namely Shri

Pawan Singla, wherein, it has been deposed that earlier the matters

were entrusted to another Chartered Accountant and the assessee

company was under bonafide belief that the appeals have been filed and

will be prosecuted by the said Chartered Accountant engaged by the

Company. However, when the assessee company contacted the present

C.A. namely Shri Rohit Goel, then it came to know that inadvertently

the appeal remained to be filed in the above cases. That the delay in

filing the captioned appeals is not intentional. That the assessee

contested all around this matter. That even the quantum appeals

travelled up to the level of the High Court and there was no reason with

the assessee not to file the present appeals against levy of penalty u/s

271 (1)(c) of the Act. The Ld. counsel has further submitted that even in

the quantum appeal, part relief has been granted to the assessee.

Considering the above submissions, the delay in filing the present

appeals is hereby condoned.

contentions have been made in both the appeals, firstly, in respect of

ITA Nos. 298 & 299/Chd/2019- M/s Shivam Cotspin Limited, Sirmour 3 the interest received on delayed payments by the assessee and further

claimed as exempt u/s 80 IC of the I.T. Act. The second issue on which

the addition was made and further confirmed is regarding the interest on

FDRs.

delayed payment of interest is concerned, the Ld. counsel has invited

our attention to the order of the Hon'ble jurisdictional High Court of

Himachal Pradesh in the own case of the assessee dated 19.3.2019

passed in ITA No. 5 of 2018 relating to the quantum proceedings,

whereby, the Hon'ble High Court has decided the issue regarding the

allowability of interest on delayed payment in favour of the assessee

vide para 4 of the said decision. Since the quantum additions on this

issue stand deleted, hence, the very basis for levy of penalty on this

issue has ceased to exist, hence, the penalty levied by the Assessing

Officer u/s 271 (1)(c) of the Act in respect of additions made in respect

of claim of delayed payment is not sustainable in the eyes of law and the

same is accordingly ordered to be deleted.

issue in the quantum proceedings has been decided against the assessee,

however, it has been submitted before us that he said claim was made by

the assessee under bonafide belief. That there was neither any intention

of the assessee to furnish inaccurate particulars of income nor to

ITA Nos. 298 & 299/Chd/2019- M/s Shivam Cotspin Limited, Sirmour 4 conceal its income . The Ld. Counsel has further submitted that the

FDRs were made with the bank as a guarantee for obtaining loan for

working capital upon which the assessee in turn has paid interest to the

bank which has also been allowed as expenditure to the assessee.

We are of the view that the assessee under bonafide belief netted

the interest received with the expenditure to make a claim u/s 80IC of

the Act. However, the said claim of the assessee has not been accepted.

In our view, this is not a case of furnishing of inaccurate particulars of

income or concealment of income warranting levy of penalty u/s 271

(1)(c) of the Act. It has been settled time and again that each and very

disallowance made by the Income Tax Authorities does not ipso facto

warrants levy of penalty u/s 271 (1)(c) of the Act.

In view of this, the penalty levied by the Assessing Officer in both

these counts is ordered to be deleted.

for the assessment year 2014-15, the penalty has also been levied on

account of disallowance claimed by the assessee u/s 80IC on Duty draw

back. This issue is settled by the decision of the Hon'ble Supreme Court

in the case of ‘M/s Liberty India vs CIT’ [2009] 317 ITR 218 (SC) vide

order dated 31.8.2019. Since the issue was already settled, hence, in

our view, there was no justification on the part of the assessee to claim

the deduction on duty draw back as exempt u/s 80IC of the Act.

ITA Nos. 298 & 299/Chd/2019- M/s Shivam Cotspin Limited, Sirmour 5 The penalty levied by the Assessing Officer in respect of the claim of duty drawback is, therefore, confirmed.

In view of our findings given above, the appeal of the assessee for assessment year 2012-13 is hereby allowed, whereas, the appeal for assessment year 2014-15 is treated as partly allowed. Order dictated and pronounced in the Open Court immediately on

completion of hearing.

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member Dated : 25.11.2019 “आर.के.”

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar