The Commissioner Of Income Tax, Faridabad v. M/S Amtek Auto Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH**** I.T.A. No.38 of 2010 Date of Decision:26.02.2013 The Commissioner of Income Tax, Faridabad Vs. .....Appellant M/s Amtek Auto Ltd. .....Respondent CORAM:- HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MS. JUSTICE RITU BAHRI Present:-Mr. Tajinder K. Joshi, Advocate for the appellant. Mr. Rakesh Gupta and Mr. S.K. Mukhi, Advocates,for the respondent. HEMANT GUPTA, J.(Oral) The revenue is in appeal under Section 260-A of the IncomeTax Act, 1961 arising out of an order passed by Income Tax AppellateTribunal, Delhi Bench `A', New Delhi (for short “the Tribunal”) on31.3.2009 arising out of an assessment year 2001-02 whereby the penaltyproceedings initiated against the assessee under Section 271(1)(c) of theIncome Tax Act, 1961 were set aside. The Assessing Officer levied penalty under Section 271(1)(c) inrespect of additions made on account of loss on the sale of fixed asset, losson sale of shares and expenses paid towards placement of preference shares.The Tribunal while accepting the appeal found that such additions made bythe Assessing Officer are based upon difference of opinion whether suchadditions are to be treated as revenue expenditure or a capital expenditure I.T.A. No.38 of 2010 and not because the assessee has made a false claim. It was also found thateven after the additions are made, there is no change in the amount of taxpayable by the assessee as the ultimate return of the assessee remains lessthan the amount assesseable under Section 115JB of the Act. The Revenue has claimed the following substantial questions of law:- (i)Whether, on the facts and in the circumstances of the case, theLd. ITAT was right in law in deleting the penalty ofRs.11,18,881/- levied by the Assessing Officer u/s 271(1)(c)of the Income Tax Act, 1961 and confirmed by the Ld. CIT(A) even though the conditions laid down under theprovisions of section 271(1)(c) are satisfied in assessee'scase?”Ld. ITAT was right in law in deleting the penalty ofRs.11,18,881/- levied by the Assessing Officer u/s 271(1)(c)of the Income Tax Act, 1961 and confirmed by the Ld. CIT(A) even though the conditions laid down under theprovisions of section 271(1)(c) are satisfied in assessee'scase?” (ii)Whether, on the facts and in the circumstances of the case, theLd. ITAT was right in law in deleting the penalty ofRs.11,18,881/- levied by the Assessing Officer u/s 271(1)(c)of the Income Tax Act, 1961 disregarding the fact that even ifthe assessee has paid higher taxes under the provisions ofsection 115JB of the Act, 1961, it is allowed to carry forwardand set off the tax credit in subsequent year in accordancewith the provisions of section 115JAA of the Income Tax Act,1961?Ld. ITAT was right in law in deleting the penalty ofRs.11,18,881/- levied by the Assessing Officer u/s 271(1)(c)of the Income Tax Act, 1961 disregarding the fact that even ifthe assessee has paid higher taxes under the provisions ofsection 115JB of the Act, 1961, it is allowed to carry forwardand set off the tax credit in subsequent year in accordancewith the provisions of section 115JAA of the Income Tax Act,1961? (iii)Whether, the Ld. ITAT was justified in deleting the penalty ofRs.11,18,881/- levied by the Assessing Officer u/s 271(1)(c)of the Income Tax Act, 1961 in the light of the apex Court'sdecision in the case of Union of India & others V/s.Dharmendra Textile Processors & others 306 ITR 277 (SC)wherein it is held that the object behind the enactment ofsection 271(1)(c) read with the explanation indicates that thesection has been enacted to provide for a remedy for loss ofrevenue. The penalty under that provision is a civil liabilityand willful concealment is not an essential ingredient forattracting civil liability?Rs.11,18,881/- levied by the Assessing Officer u/s 271(1)(c)of the Income Tax Act, 1961 in the light of the apex Court'sdecision in the case of Union of India & others V/s.Dharmendra Textile Processors & others 306 ITR 277 (SC)wherein it is held that the object behind the enactment ofsection 271(1)(c) read with the explanation indicates that thesection has been enacted to provide for a remedy for loss ofrevenue. The penalty under that provision is a civil liabilityand willful concealment is not an essential ingredient forattracting civil liability? After hearing learned counsel for the parties, we do not findthat any substantial question of law arises for consideration. The assessee has disclosed the nature of transactions in itsreturn. It was on the basis of interpretation of the provisions of the Statute,the Assessing Officer found that such expenditure claimed by the assesseeis not the revenue expenditure but the capital expenses. There is finedistinction as to when an expenditure can be treated as a revenue or a capitalexpenditure. Therefore, merely for the reason that the assessee has claimedthe expenditure to be revenue will not render the assessee liable to penaltyproceedings. The order passed by the Tribunal does not give rise to thequestions of law sought by the revenue. Consequently, we do not find any merit in the present appealand the same is dismissed. ( HEMANT GUPTA ) JUDGE February 26, 2013renu/Vimal ( RITU BAHRI ) JUDGE