TaxTMI 
TaxTMI 
2014 (6) TMI 349
X X X X Extracts X X X X
X X X X Extracts X X X X
.... sake of convenience. 2. First, we take up the three appeals filed by the revenue for the assessment years 2003-04, 2004-05 & 2006-07. The grounds raised by the revenue in these three years are identical except difference in amounts and hence, we reproduce the grounds raised by the revenue in assessment year 2003-04 i.e. I.T.A.No. 587/Ahd/2011, which are as under: "1) The Ld. CIT(A) has erred in law and on facts in holding that the decision of AO in deleting the addition of Rs.8,26,242/- made on account of unutilized CENVAT/MODVAT credit. 2) On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the addition of Rs.8,26,242/-'. 3) It is, therefore, prayed that the order of the CIT (A) be set aside and that of the A.O. be restored to the above extent." 2.1 In assessment year 2004-05, the amount involved is Rs.97,92,837/- and similarly, in assessment year 2006-07, the amount involved is Rs.10,89,032/-. 2.2 Ld. D.R. supported the assessment order whereas the Ld. A.R. supported the order of Ld. CIT(A). He also drawn our attention to para 7 on page 11 of the order of Ld. CIT(A) where Ld. CIT(A) has followed the judgment of Hon'ble Gujarat H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on is recorded before carrying out the search at the premises of the assessee. In the facts of the present case, admittedly no satisfaction has been recorded and therefore the whole of the assessment order is without jurisdiction. 3. Ld. CIT (A) has erred in law in and on facts in not appreciating that the even the assessment u/s 153A of the Act is restricted to the materials and evidences indicating undisclosed or unrecorded income found during the course of the search and the same cannot go beyond the same. In the facts of the present case, none of the additions are based on the search material and therefore also the assessment order may kindly be quashed. 4. Both the lower authorities have erred in law and on facts in not properly appreciating and considering various submissions, evidences and supporting placed on record during the course of the assessment proceedings and not properly appreciating various facts and law in its proper perspective and further erred in passing orders in gross violation of the principles of natural justice." 3.1 It was fairly admitted by the Ld. A.R. that these cross objections filed by the assessee are mainly in support of the order of Ld. CIT(A)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ld. D.R. supported the penalty order whereas the Ld. A.R. supported the order of Ld. CIT(A). 4.2 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that in the present case, penalty was imposed by the A.O. in respect of four additions/disallowances being; (i) excess claim of depreciation of Rs.9,38,007/-, (ii) disallowance u/s 10B in respect of Cotton Yarn Division of Rs.2,23,09,295/-, (iii) disallowance of deduction u/s 10B in respect of Kadi unit of Rs.11,60,050/- and (iv) disallowance of carry forward unabsorbed depreciation of Rs.7,18,74,648/-. Ld. CIT(A) has deleted the penalty in respect of all these four disallowances and the relevant para of the order of Ld. CIT(A) is para 3 on page 2-4 of his order , which is reproduced below for the sake of ready reference: "3. After going through rival submissions following points emerge: 1. No penalty is found leviable on excess claim of depreciation of Rs.9,38,007 because the accounts were audited and the auditors prepared the depreciation calculation and where the mistake creeps in due to auditors / accountants / clerks penalty u/s. 271(1)(c) is n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fferent interpretation does not amount to concealment or furnishing of inaccurate particulars of income. 4. With respect to the imposition of penalty on disallowance of carried forward depreciation of Rs.7,18,74,648, it is seen that the Assessing Officer levied penalty as according to him no depreciation should have been carried forward by the assessee because in the assessment order of AY 2004-05 the entire depreciation had been absorbed. It was argued by the Id AR that the assessment order of ASSESSMENT YEAR 2004-05 was passed on 29-12-2006 whereas return of income of ASSESSMENT YEAR 2005-06 on 30.9.2005. This is found factually correct, therefore there was no mala fide or furnishing of inaccurate particulars of income, on the part of the appellant whatsoever, and in my view this cannot be the reason for imposing penalty u/s. 271(1)(c)." 4.3 We have gone through the above paragraph of the order of Ld. CIT(A) and we find that the penalty in respect of 1st disallowance was deleted by Ld. CIT(A) by following the judgement of Hon'ble Gujarat High Court rendered in the case of CIT vs. Glow Tech Steels (P) Ltd (supra) and the Ld. D.R. could not point out as to how this judgement of H....