GOPAL GLASS WORKS LTD.,AHMEDABAD vs. THE CIT(A)-2, AHMEDABAD

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ITA 2674/AHD/2015Status: DisposedITAT Ahmedabad29 November 2017AY 2011-122 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found the assessee's explanation for the difference in deduction quantification to be reasonable. Citing a precedent, the Tribunal deleted the penalty imposed under Section 271(1)(c).

What were the facts?

The assessee was denied a deduction under Section 80IA, but the CIT(A) reversed this decision in principle. However, the CIT(A) reduced the deductible amount due to non-allocation of administrative expenses, leading to a penalty imposition.

What were the issues?

Whether a penalty under Section 271(1)(c) is leviable when a difference in the quantification of a deduction arises from a reasonable explanation regarding administrative expense allocation.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD SMC BENCH, AHMEDABAD

I.T.A. No.2674/Ahd/2015 Assessment Year: 2011-12 Page 1 of 2 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SMC BENCH, AHMEDABAD [Coram: Pramod Kumar AM] I.T.A. No.2674/Ahd/2015 Assessment Year: 2011-12 Gopal Glass Works Ltd., .......…………...........Appellant 182, Gagan Vihar, Ahmedabad – 380 001. [PAN : AAACG 5599 H] Vs. Commissioner of Income tax (Appeals)-2, Ahmedabad. ............................Respondent Appearances by: Pamil H. Shah for the appellant Santosh Karnani for the respondent Date of concluding the hearing: 21.11.2017 Date of pronouncing the order: 29.11.2017 O R D E R

1.

By way of this appeal, the assessee has challenged correctness of the order dated 23rd July, 2015 passed by the ld. CIT(A) upholding penalty of Rs.36,474/- imposed under section 271(1)(c) of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year 2011-12.

2.

The relevant material facts are like this. The assessee was declined deduction u/s.80IA, amounting to Rs.49,18,577/- but, on appeal, the action of the Assessing Officer in so declining the deduction under section 80IA,was reversed, in principle, by the ld. CIT(A). On the qualification of deduction, however, the learned CIT(A) held that correct deduction works out to Rs.48,00,536/-. The difference was on account of non allocation of administrative expenses, to the eligible unit. It was in this backdrop that the learned CIT(A) initiated, and imposed the impugned penalty of Rs.36,474/-. Aggrieved, the assessee is in appeal before me.

I.T.A. No.2674/Ahd/2015 Assessment Year: 2011-12 Page 2 of 2 3. I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position.

4.

I have noted that the small difference in quantification of claim of deduction under section 80IA is said to be on account of error in not allocating the head office expenses. Looking to the quantum of mistaken allocation adjustment vis-a-vis overall claim of deduction under section 80IA, the explanation of the assessee does seem reasonable to me and it, therefore, merits acceptance. I have also noticed that in similar situation, a division bench of this Tribunal, in the case of ITO vs. Sharda Construction & Investment Company [(2014) 50 txmann.com 331 (Pune)], had deleted the related penalty. In view of these discussions, and respectfully following the above judicial precedent, I delete the impugned penalty of Rs.36,474/-. The assessee gets the relief accordingly.

5.

In the result, the appeal is allowed. Pronounced in the open court today on the 29th day of November, 2017. Sd/- Pramod Kumar (Accountant Member) Dated: Ahmedabad, the 29th day of November, 2017. PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) DR (6) Guard File By order

Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

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