Vimlachal Print & Pack Pvt. Ltd., Ahmedabad V. The ACIT.,Circle-8, Ahmedabad

CO 131/AHD/2010

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 5212 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-10-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 01-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: N C AMIN
• Keywords: Depreciation; Bonafide belief; Question of law; Difference of opinion; Bonafide mistake; Reassessment proceedings
• Section: 260A; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL, V.P.(AZ) & HON BLE SHRI T.K. SHARMA, J.M. ) I.T.A. NOS. 1131, 1132, 1133, 1134/AHD./2010 ASSESSMENT YEARS : 1999-2000, 2000-2001, 2001-2002, 2003-2004 ASSISTANT COMMISSIONER OF INCOME TAX, -VS.- VIMLACHAL PRINT & PACK PVT. LTD., CIRCLE-8, AHMEDABAD AHMEDABAD (PAN : AA ACV 7000 Q) (APPELLANT) (RESPONDENT) & C.O. NOS. 128, 129, 130 & 131/AHD/2010 (ARISING OUT OF I.T.A. NOS. 1131, 1132, 1133, 1134/ AHD./2010) ASSESSMENT YEARS : 1999-2000, 2000-2001, 2001-2002, 2003-2004 VIMLACHAL PRINT & PACK PVT. LTD., -VS.- ASSISTANT COMMISSIONER OF INCOME TAX, AHMEDABAD CIRCLE-8, AHMEDABAD (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI N.C. AMIN DEPARTMENT BY : SHRI C.K. MISHRA, SR. D .R. O R D E R PER BENCH : THESE FOUR APPEALS FILED BY THE REVENUE AND CROSS OBJECTIONS BY THE ASSESSEE ARE AGAINST THE COMMON ORDER DATED 27.01.2010 OF LEARNED COMMI SSIONER OF INCOME TAX (APPEALS)-XIV, AHMEDABAD CANCELLING THE PENALTIES OF RS.6,56,250/- , RS.5,41,406, RS.4,17,129/- AND RS.2,18,024/- FOR THE ASSESSMENT YEARS 1999-2000, 2 000-2001, 2001-2002, 2003-2004 RESPECTIVELY. BOTH THESE APPEALS WERE HEARD ON THE SAME DATE, INVOLVED COMMON ISSUE AND ARGUED BY COMMON LD. REPRESENTATIVE, THEREFORE, THE SE ARE DECIDED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND PRINTING OF PAPER/ FILM FOR SOAP WRAPPERS. FOR ALL THE FOUR ASSESSMENT YEARS UNDER APPEALS, THE ASSESSING OFFICER LEVIED THE PEN ALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE 2 ITA NOS. 1131, 1132, 1133 & 1134/AHD/2010 & C.O. 1 28-131/AHD/2010 GROUND THAT ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF DISALLOWANCE OF DEPRECIATION CLAIMED ON GOODWILL BEING INTANGIBLE ASSETS AMOUNTI NG TO RS.18,75,000/-, RS.14,06,250/-, RS.10,54,688/- AND RS.5,93,262/- FOR THE ASSESSMENT YEARS 2000-01, 2001-02, 2002-03 & 2003- 04 RESPECTIVELY HAS ULTIMATELY BEEN CONFIRMED BY TH E ITAT IN THE APPEAL FILED BY THE REVENUE. BEFORE THE ASSESSING OFFICER, IN RESPONSE TO SHOW-C AUSE NOTICE ISSUED UNDER SECTION 271(1)(C), THE ASSESSEE FILED ITS REPLY VIDE LETTER DATED 17.0 2.2009 STATING THAT WHILE MAKING THE ORIGINAL ASSESSMENT/ INTIMATION, THE CLAIM OF THE ASSESSEE W AS ALLOWED BY THE ASSESSING OFFICER AND, THEREFORE, THERE IS NO CONCEALMENT OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C). IN SUPPORT OF THIS, BEFORE THE ASSESSING OFFICER RELIANCE WAS ALSO PLACED ON THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF SKYLINE CATTERERS PVT. LTD. [1 18 TTJ PAGE 344], WHEREIN IT WAS HELD THAT GOODWILL IS AN INTANGIBLE ASSETS AND DEPRECIATION I S ADMISSIBLE UNDER SECTION 32(1)(II) AND DISTINGUISHED THE DECISION OF BHARATBHAI J. VYAS V S. ITO 101 TTJ 1012 OF ITAT, AHMEDABAD BENCH AND SUBMITTED THAT THE DIFFERENCE OF OPINION OF BOTH THE TRIBUNALS ON THE SAME ISSUE IS CONCLUSIVELY PROVED BEYOND DOUBT THAT DEPRECIATION CLAIMED BY THE ASSESSEE ON GOODWILL WAS BONAFIDE. IT WAS FURTHER SUBMITTED THAT ALL THE ASS ESSMENTS WERE REOPENED ON THE BASIS OF AUDIT NOTES, WHICH HAS NO JURISDICTION TO INTERPRET THE L AW WHETHER THE INTANGIBLE ASSETS INCLUDES GOODWILL OR NOT. IT WAS CONTENDED THAT RE-ASSESSMEN T MADE FOR MAKING ELABORATE DISCUSSION ALSO PROVES THAT THREE IS A DIFFERENCE OF OPINION AND NO T CONCEALMENT OF INCOME. 2.1. IT WAS ALSO SUBMITTED BY THE LD. COUNSEL OF TH E ASSESSEE THAT THE ASSESSEE HAS DISCLOSED ALL THE FACTS IN THE RETURN OF INCOME AND AUDIT REPORT, THERE IS NO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. WHETHER INTANGI BLE ASSETS INCLUDE GOODWILL IS HIGHLY DEBATABLE ISSUE AS IS EVIDENT FROM THE DECISION DAT ED 25.08.2005 OF ITAT, AHMEDABAD BENCH IN THE CASE OF BHARATBHAI J. VYAS VS.- ITO [97 ITD 24 8]. THE REFERENCE BEFORE THE HON'BLE GUJARAT HIGH COURT HAS BEEN ADMITTED IN THE CASE OF BHARATB HAI J. VYAS, WHICH ALSO PROVES BEYOND DOUBT THAT THE ISSUE IN QUESTION IS HIGHLY DEBATABLE AND QUESTION OF INTERPRETATION WHETHER INTANGIBLE ASSETS INCLUDE GOODWILL OR NOT, IS NOT ABSOLUTELY F REE FROM DOUBT AND, THEREFORE, NO QUESTION OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. 2.2. IT WAS ALSO CONTENDED BY THE LD. COUNSEL OF TH E ASSESSEE THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM, WHEREIN THE PRINCIPLE OF EDUSDEM GENERIS HAS BEEN 3 ITA NOS. 1131, 1132, 1133 & 1134/AHD/2010 & C.O. 1 28-131/AHD/2010 FOLLOWED AND GOODWILL IS HELD AS A COMMERCIAL ASSET . IN THE CASE OF ASSESSEE, THREE WAS A AMALGAMATION OF COMPANY TO ANOTHER AND ALL THE ASSE TS RIGHTS, ETC. IS TRANSFERRED TO OTHER COMPANY AND WHICH WAS PURCHASED BY MAKING VARIOUS P AYMENTS WHEREAS IN THE CASE OF BHARATBHAI J. VYAS, THERE IS A SELF-GENERATION OF G OODWILL WHICH ISSUE HAS NOT BEEN CONSIDERED INDEPENDENTLY IN THE PENALTY PROCEEDINGS. IT WAS AL SO SUBMITTED THAT PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT, THEREFORE, IN PENALTY PROCEEDINGS, ASSESSING OFFICER SHOULD CONSIDER THE PLEA OF THE ASSESSEE THAT THE ASSESSEE S FACTS ARE DIFFERENT THAN THAT OF IN THE CASE OF BHARATBHAI J. VYAS (SUPRA). 2.3. IT WAS ALSO CONTENDED THAT THE CLAIM WAS MADE ON THE ADVICE OF THE CONSULTANT AND CHARTERED ACCOUNTS AFTER THOROUGH DISCUSSIONS AND H ENCE, THERE IS NO FURNISHING OF INACCURATE PARTICULARS OF INCOME, WHICH WAS SUPPORTED BY THE D ECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF B.T.X. CHEMICALS PVT. LTD. VS.- CIT RE PORTED IN 155 TAXMAN 644 (GUJ.). 3. IN THE PENALTY ORDERS, THE ASSESSING OFFICER DIS CUSSED IN DETAIL THE VARIOUS CONTENTIONS RAISED BY THE ASSESSEE ON PAGES 47 & 48 OF HIS ORDE R AND OBSERVED THAT PENALTY UNDER SECTION 271(1)(C) IS CIVIL LIABILITY AND FOR ATTRACTING SUC H CIVIL LIABILITY, WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT AS IS CASE IN MATTER OF PROSEC UTION UNDER SECTION 276C UNION OF INDIA VS.- DHARMENDRA TEXTILE PROCESSORS (2008), 166 TAXMAN 65 (SC). SUPREME COURT JUDGMENT IN CASE OF DILIP N. SHROFF VS.- JCIT (2007) 291 ITR 519 RE QUIRES RECONSIDERATION. EXPLANATION ADDED TO SECTION 271(1)(C) IN THEIR ENTIRETY ALSO INDICATE E LEMENT OF STRICT LIABILITY ON ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WH ILE FILING RETURNS. (UNION OF INDIA VS.- DHARMENDRA TEXTILE PROCESSORS (2007) 295 ITR 244 (S C). THE ASSESSING OFFICER FURTHER OBSERVED THAT MERE ADMISSION OF APPEAL AGAINST THE ORDER OF TRIBUNAL BY THE HON'BLE HIGH COURT DOES NOT DELETE THE ADDITION CONFIRMED BY THE TRIBU NAL. AFTER CONSIDERING THE AFORESAID SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE , THE ASSESSING OFFICER, THEREFORE, HELD THAT IT IS A FIT CASE FOR IMPOSITION OF PENALTY AND ACCORDI NGLY LEVIED THE PENALTY UNDER SECTION 271(1)(C) IN ALL THE FOUR ASSESSMENT YEARS UNDER APPEALS. AGG RIEVED WITH THE ORDER OF ASSESSING OFFICER, THE ASSESSEE IS IN APPEALS BEFORE THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS). 4 ITA NOS. 1131, 1132, 1133 & 1134/AHD/2010 & C.O. 1 28-131/AHD/2010 4. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS), THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSIN G OFFICER. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER AFTER CON SIDERING THE SAME CANCELLED THE PENALTIES OF RS.6,56,250/-, RS.5,41,406, RS.4,17,129/- AND RS .2,18,024/- FOR THE ASSESSMENT YEARS 1999- 2000, 2000-2001, 2001-2002, 2003-2004 RESPECTIVELY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) FOR ALL THE FOUR ASSESSMENT YEARS . IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED IN PA RA 2.3 TO 2.3.6 AS UNDER :- 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE SUBMISSIONS OF THE APPELLANT. I AM INCLINED TO ACCEPT THE CONTENTION O F THE APPELLANT BASED ON FACTS OF THE CASE AND DULY SUPPORTED BY VARIOUS JUDICIAL PRONOUNCEMENTS. DURING THE REASSESSMENT PROCEEDINGS FOR AY 2001-02 SUCH DISALL OWANCE FOR DEPRECIATION ON GOODWILL WAS MADE. IN ALL THE CASES ALSO, SUCH D ISALLOWANCES WERE MADE IN THE COURSE OF REASSESSMENT PROCEEDINGS. THE LD. CIT (A.) IN ALL THE CASES ALLOWED THE APPEAL OF THE APPELLANT BUT ON THE APPEAL OF TH E REVENUE. HON'BLE ITAT, AHMEDABAD 'B' BENCH REVERSED THE ORDER OF THE LD. C IT(A) AND UPHELD THE DISALLOWANCES. THE A. O. AFTER AFFORDING THE OPPORT UNITY TO THE APPELLANT IMPOSED THE PENALTY U/S, 271(1)(C) OF THE ACT IN AL L THE FOUR YEARS UNDER CONSIDERATION. THE APPELLANT DURING THE COURSE OF R E-ASSESSMENT, APPELLATE LEVEL BOTH BEFORE ID. CIT(A) AS WELL AS HON'BLE ITAT RAIS ED VARIOUS CONTENTION ABOUT QUANTUM ADDITION FOR DISALLOWANCE OF DEPRECIATION O N GOODWILL BEING THE ISSUE IS DEBATABLE AND HAS VARIOUS JUDICIAL PRONOUNCEMENT BUT ULTIMATELY HON'BLE ITAT, AHMEDABAD FOLLOWING ITS OWN ORDER IN THE CASE OF BHARATBHAI J. VYAS VS. ITO 971 ITD 248 UPHELD THE ADDITION MADE BY A.O. DU RING THE PENALTY PROCEEDINGS THE APPELLANT RAISED VARIOUS ISSUE RELA TED TO FOLLOWING PROPOSITION. (A) THE ISSUE BEING CONTENTIOUS AND THOROUGHLY EXAM INED BY THE A. O. WHILE MAKING ORIGINAL ASSESSMENT WHERE ALL THE NECESSARY DETAILS WERE DISCLOSED CANNOT BE HELD BEING FURNISHING OF INACCURATE PARTI CULARS AT THE TIME OF REASSESSMENT. (B) THOUGH THE APPELLANT'S FACTS ARE DIFFERENT THAN THAT OF THE CASE OF SHRI BHARATBHAI J. VYAS (97 ITD 248) AND THE DISTINGUISH MENT OF SUCH FACT WAS ACCEPTED BY LD. CIT(A) BUT HON'BLE ITAT FOLLOWED IF AND UPHELD THE DISALLOWANCES, IT IS THEREFORE, THERE ARE NO FINITE INTERPRETATION IN RESPECT OF CLAIM OF DEPRIVATION ON GOOD WILL BEING AN INTANGIB LE ASSETS, THE APPELLANT RELIED ON VARIOUS CASE LAWS WHERE DEPRECIATION WERE HELD TO BE ALLOWED ON GOODWILL IN THIS REGARD. IT IS THEREFORE CLAIMED TH AT ON ACCOUNT OF CONFLICTING DECISION OF VARIOUS COURTS, THE ISSUE CANNOT BE ATT RIBUTABLE TO FURNISHING INACCURATE PARTICULARS. (C)SINCE APPELLANT 'S CASE WAS AUDITED BY AUDITORS FOR COMPANY AS WELL AS TAX AUDIT, IT WAS UNDER THE PROPER ADVICE FROM THEM THA T SUCH CLAIM WAS MADE AND THE SAME WAS INITIALLY ALLOWED. IT IS THEREFORE, TH E APPELLANT WAS PREVENTED BY BONAFIDE BELIEF ON THE BASIS OF SUCH ADVICE THAT SU CH CLAIM IS ADMISSIBLE. IN THESE CIRCUMSTANCES, THE PENAL PROVISIONS ARE NOT A TTRACTED. APPELLANT RELIED ON 5 ITA NOS. 1131, 1132, 1133 & 1134/AHD/2010 & C.O. 1 28-131/AHD/2010 HON'BLE GUJARAT HIGH COURT CASE OF BTX CHEMICALS PV T. LTD. V. CIT. 155 TAXMAN 674. (D) IN THE APPELLANT'S OWN CASE HON'BLE GUJARAT HIG H COURT VIDE TAX APPEAL NO,47 OF 2009 WITH TAX APPEAL NO.48 OF 2009 TO TAX APPEAL NO.51 OF 2009 VIDE ORDER DATED 24.06.2009 ADMITTED THE FOLLOWING SUBST ANTIAL QUESTION OF LAW. 'WHETHER IN THE FACTS AND UNDER THE CIRCUMSTANCES O F THE CASE, THE INCOME-TAX APPELLATE TRIBUNAL WAS RIGHT IN LAW IN N OT GRANTING DEPRECIATION UNDER SECTION 32 OF THE I. T. ACT, 196 1 ON THE GOODWILL ACQUIRED BY THE ASSESSEE ?' IT WAS FURTHER CONTENDED THAT EVEN IN THE CASE OF B HARATBHAI J. VYAS THE HON'BLE GUJARAT HIGH COURT ADMITTED SUCH SUBSTANTIAL QUESTI ON OF LAW VIDE ORDER DATED 13- 11-2006 IN THE APPEAL NO, 380 OF 2006 AND THE SAME WILL STILL PENDING BEFORE HON'BLE HIGH COURT. IT IS IN THESE CIRCUMSTANCES, THE ISSUE REQUIRED PR OPER DELIBERATION AND APPELLANT CAN NOT BE HELD AS BEING FURNISHED INACCURATE PARTI CULARS. (E)THERE IS NO PROPER SATISFACTION DRAWN BY A.O, WH ILE INITIATING AND IMPOSING THE PENALTY. 2.3.1. THE ASSESSING OFFICER MADE ALMOST IDENTICAL PENALTY ORDER FOR ALL THE FOUR YEARS BEING COMMON ISSUE AND COMMON SUBMISSION CONS IDERED SOME OF SUCH CONTENTIONS AND REJECTED APPELLANT 'S PLEA MAINLY F OLLOWING THE RATIO OF HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA -VS.- D HARMENDRA TEXTILE PROCESSORS (2008) 166 TAXMAN 65 AND DILIP N. SHROFF VS. JCIT ( 2007) 291 ITR 519. 2.3.2. THE APPELLANT DURING THE APPELLATE PROCEEDIN GS NOT ONLY RAISED THE ABOVE DISCUSSED CONTENTIONS AND SUBMITTED THAT IN THE SUB SEQUENT JUDGMENT OF THE HON'BLE SUPREME COURT, THE RATIO OF JUDGMENT IN THE CASE OF DHARRNENDRA TEXTILES AND DILIP N. SHROFF WERE DISTINGUISHED AND HELD TO BE NOT STR ICTLY CONSTRUDE FOR PENAL PROVISION OF INCOME-TAX PROCEEDINGS (DHARMENDRA TEX TILE WAS RELATED TO CENTRAL EXCISE & CUSTOM RELATED CASE AND CASE OF DILIP N. S HROFF AND ASHOK PAI WERE HELD TO BE NO GOOD LAW. 2.3.3. IT IS IN THIS REGARD, THE APPELLANTS CONTENT ION WERE EXAMINED. THE FACTUAL ASPECTS WERE FOUND TO BE CORRECT THAT IN ORIGINAL A SSESSMENT PROCEEDINGS, SUCH DEPRECIATION WAS ALLOWED BUT ON REASSESSMENT SUCH A DDITIONS WERE MADE, WHICH WERE ALLOWED BY ID. CIT(A) BUT REVERSED BY HON'BLE ITAT, IT IS THEREFORE THE APPELLANT'S CONTENTION ABOUT BONAFIDE BELIEF HAS TO BE ACCEPTED WITH THE FACT THAT ALL THE MATERIAL WAS DISCLOSED BY THE APPELLANT AND WAS EXAMINED IN ORIGINAL ASSESSMENT. THIS FURTHER CANNOT BE HELD AS FURNISHI NG INACCURATE PARTICULARS. THE OTHER PART I.E. ON THE SAME ISSUE THERE ARE VARIOUS JUDICIAL PRONOUNCEMENT EXIST AND HON'BLE GUJARAT HIGH COURT NOT ONLY IN APPELLANT'S CASE BUT ALSO IN THE CASE OF BHARATBHAI J. VYAS (SUPRA) ADMITTED THIS ISSUE AS S UBSTANTIAL QUESTION OF JAW, THEREBY INDICATING STAND OF APPELLANT ABOUT BONAFID E INTERPRETATION OF THE ISSUE, IN SUCH CIRCUMSTANCES THE APPELLANT'S CONTENTION BECOM E STRONG THAT AS ON DATE OF FILING OF RESPECTIVE RETURN OF INCOME THE CLAIM WAS BONAFIDE ON THE PROPER ADVICE OF 6 ITA NOS. 1131, 1132, 1133 & 1134/AHD/2010 & C.O. 1 28-131/AHD/2010 AUDITORS. IT IS THEREFORE THE EXPLANATION OF THE AP PELLANT FOR PENALTY SHOW CAUSE BECOME SATISFACTORY AND THE PENALTY SO IMPOSED DOES NOT TENABLE IN LAW. 2.3.4. THE ASSESSMENT PROCEEDINGS AND PENALTY PROCE EDINGS ARE SEPARATE PROCEEDINGS. IT IS NOT IN ALL CASES WHERE DISALLOWA NCES OR ADDITIONS ARE CONFIRMED THE PENALTY IMPOSITION IS AUTOMATIC. BUT, THE A.O. EXCEPT RELYING ON HON'BLE SUPREME COURT JUDGMENT HAS NOT BE CONSIDERED THE AP PELLANTS CONTENTION IN PROPER PROSPECTIVE AND IMPOSED PENALTY. AGGRIEVED WITH THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEALS BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF R EVENUE, SHRI C.K. MISHRA, LD. SR. D.R. APPEARED AND CONTENDED THAT ITAT, C BENCH, AHMEDA BAD IN THE CASE OF SHRI BHARATBHAI J. VYAS REPORTED IN 97 ITD 248 HAS HELD THAT ASSESSEE IS NOT ENTITLED DEPRECIATION ON GOODWILL. THIS DECISION ALONE INDICATES THAT THE ASSESSEE MADE A W RONG AND NON-ADMISSIBLE CLAIM. THIS WAS NOT ALLOWED BY THE TRIBUNAL IN QUANTUM APPEAL FOR ALL T HE FOUR ASSESSMENT YEARS UNDER APPEAL, THEREFORE, THE ASSESSING OFFICER RIGHTLY LEVIED THE PENALTIES OF RS.6,56,250/-, RS.5,41,406, RS.4,17,129/- AND RS.2,18,024/- FOR THE ASSESSMENT YEARS 1999-2000, 2000-2001, 2001-2002, 2003-2004 RESPECTIVELY AND LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT JUSTIFIED IN CANCELLING THE SAME. THE LD. D.R. FURTHER SUBMITTED THAT EXPLANATION FURNISHED BY THE ASSESSEE IS NOT BONAFIDE. 6. ON THE OTHER HAND, SHRI N.C. AMIN, LD. COUNSEL A PPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). HE SUBMITTED THAT ITAT, C BENCH, AHMEDABAD IN THE CA SE OF BHARATBHAI J. VYAS (SUPRA) HELD THAT DEPRECIATION ON TANGIBLE ASSETS I.E. GOODWILL IS NO T ADMISSIBLE UNDER SECTION 32(1)(II) OF THE INCOME TAX ACT, 1961, WHEREAS IN THE CASE OF SKYLIN E CATERERS PVT. LTD. VS.- ITO REPORTED IN 306 ITR (AT) PAGE 369 (MUMBAI), KOTAK FOREX BROKERA GE LTD. VS.- ACIT, ITAT, F BENCH, MUMBAI REPORTED IN 131 TTJ PAGE 404 AND ITAT, DELHI IN THE CASE OF HINDUSTAN COCACOLA BEVERAGES PVT. LTD. VS.- DCIT IN ITA NO. 1884/DEL. /2006 DATED 25.08.2009, WHEREIN IT WAS HELD THAT EVEN IF ASSETS DESCRIBED AS GOODWILL BUT IT FITS IN THE DESCRIPTION OF SECTION 32(1)(II) DEPRECIATION IS TO BE GRANTED ON THE SAME; THE TRUE BASIS ON DEPRECIATION ALLOWANCE IS THE CHARACTER OF THE ASSETS AND NOT ON DESCRIPTION, WHE REIN IT IS HELD THAT GOODWILL IS ALSO INTANGIBLE 7 ITA NOS. 1131, 1132, 1133 & 1134/AHD/2010 & C.O. 1 28-131/AHD/2010 ASSETS OF SIMILAR NATURE REFERRED TO IN CLAUSE (II) OF SECTION 32(1) AND THEREFORE, DEPRECIATION IS ALLOWABLE ON THE SAME. A.P. PAPER MILLS LTD. VS.- ACIT 128 TTJ PAGE 596, WHEREIN FACTS ARE IDENTICAL TO THE FACTS OF THE CASE OF THE APPELLANT AND HELD THAT GOODWILL WHICH IS COMMERCIAL RIGHT OF SIMILAR NATURE AS ENUMERATED IN SECTION 32 AND, THEREFORE, ASSESSEE WAS ENTITLED TO DEPRECIATION ON GOODWILL. 6.1. THE LD. COUNSEL OF THE ASSESSEE ALSO POINTED O UT THAT THE HON'BLE GUJARAT HIGH COURT HAS ADMITTED THE APPEAL UNDER SECTION 260A OF THE INCOM E TAX ACT, 1961 IN THE CASE OF BHARATBHAI J. VYAS. IN QUANTUM APPEAL, IN THE CASE OF ASSESSEE TR IBUNAL HAS FOLLOWED THE DECISION OF BHARATBHAI J. VYAS. THE HON'BLE GUJARAT HIGH COURT ALSO ADMITTED THE APPEAL UNDER SECTION 260A IN THE CASE OF ASSESSEE VIDE ORDER DATED 24.6. 2009 HOLDING THAT SUBSTANTIAL QUESTION OF LAW IS INVOLVED. THIS ALSO PROVES THAT THE CLAIM MADE B Y THE ASSESSEE WAS BONAFIDE. 6.2. THE LD. COUNSEL OF THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS.- LAKHANI INDIA LTD. REPORTED IN 324 ITR PAGE 73. HE ALSO RELIED ON THE LATEST DECISION OF CHANDRA PAL B AGGA VS.- ITAT & ANOTHER WHEREIN IT WAS HELD THAT ERRONEOUSLY CLAIMING EXEMPTION IS NOT A C ONCEALMENT OF INCOME REPORTED IN 261 ITR PAGE 67. 6.3. IN SUPPORT OF THIS, LD. COUNSEL OF THE ASSESSE E FURTHER SUBMITTED THAT NO INFORMATION IN THE RETURN OF INCOME FOR THE ASSESSMENT YEARS UNDER APP EALS IS FOUND TO BE INCORRECT. INCORRECT AMOUNT OF DEPRECIATION WAS CLAIMED DUE TO BONAFIDE MISTAKE IN THE ASSESSMENT YEARS UNDER APPEALS. THIS DOES NOT AMOUNT TO CONCEALMENT OF PA RTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAX ACT AS RECENTLY HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT-VS.- RELIANCE PETRO PRODUCTS PVT. LTD. [2010] 322 ITR 158 (SC). 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, THE ASSESSEE HAD DISCLOSED ALL THE MATERIAL FACTS. THIS VIEW IS ALSO SUPPORTED BY THE RECENT JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN [2010] 322 ITR 158 (SC), WHEREIN THE HON'BLE SUPREME COURT HE LD THAT MAKING INCORRECT CLAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME. T HE HEAD-NOTES OF THE SAID DECISION READS AS UNDER :- 8 ITA NOS. 1131, 1132, 1133 & 1134/AHD/2010 & C.O. 1 28-131/AHD/2010 A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY , THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PEN ALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOC UMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT P ENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MER E MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS . WE, THEREFORE, BY RELYING ON THE JUDGMENT OF THE H ON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), ARE OF THE VIEW T HAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS LEGALLY AND FACTUALLY CORRECT IN DELET ING THE PENALTIES OF RS.6,56,250/-, RS.5,41,406, RS.4,17,129/- AND RS.2,18,024/- FOR THE ASSESSMENT YEARS 1999-2000, 2000-2001, 2001-2002, 2003-2004 RESPECTIVELY. WE ALSO FOUND CONSIDERABLE FORCE IN THE SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE THAT THE CLAIM OF THE ASSES SEE WAS BONAFIDE BECAUSE THE APPEAL OF THE ASSESSEE UNDER SECTION 260A HAS BEEN ADMITTED BY TH E HON'BLE GUJARAT HIGH COURT VIDE ORDER DATED 24.06.2009. THE HON'BLE MUMBAI ITAT IN THE CA SE OF SKYLINE CATERERS PVT. LTD. (SUPRA) AND IN THE CASE OF KOTAK FOREX BROKERAGE LTD. (SUPR A) AND HON'BLE ITAT DELHI IN THE CASE OF HINDUSTAN COCACOLA BEVERAGES PVT. LTD. (SUPRA) HELD THAT EVEN IF ASSETS DESCRIBED AS GOODWILL 9 ITA NOS. 1131, 1132, 1133 & 1134/AHD/2010 & C.O. 1 28-131/AHD/2010 BUT IT FITS IN THE DESCRIPTION OF SECTION 32(1)(II) DEPRECIATION IS TO BE GRANTED ON THE SAME; THE TRU E BASIS ON DEPRECIATION ALLOWANCE IS THE CHARACTER OF THE ASSETS AND NOT ON DESCRIPTION, WHEREIN IT IS HELD THAT GOODWILL IS ALSO INTANGIBLE ASSETS OF SIM ILAR NATURE REFERRED TO IN CLAUSE (II) OF SECTION 32(1) AND THEREFORE, DEPRECIATION IS ALLOWABLE ON T HE SAME. A.P. PAPER MILLS LTD. VS.- ACIT 128 TTJ PAGE 596, WHEREIN FACTS ARE IDENTICAL TO THE FA CTS OF THE APPELLANT AND HELD THAT GOODWILL WHICH IS COMMERCIAL RIGHT OF SIMILAR NATURE AS ENUM ERATED IN SECTION 32 AND, THEREFORE, ASSESSEE WAS ENTITLED TO DEPRECIATION ON GOODWILL. ALL THESE DECISIONS ALSO PROVE THAT THE CLAIM MADE BY THE ASSESSEE WAS BONAFIDE. WE ARE, THEREFORE, OF TH E VIEW THAT IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) RIGHTLY DELETE D THE PENALTIES LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) IN RESPECT OF ALL T HE ASSESSMENT YEARS UNDER APPEALS. WE, THEREFORE, DECLINE TO INTERFERE. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE REVE NUE ARE DISMISSED. 9. THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE M ERELY IN SUPPORT OF THE ORDERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IN VIEW OF OU R DECISION IN REVENUES APPEALS IN RESPECT OF ALL THE FOUR ASSESSMENT YEARS, ALL THE CROSS OBJ ECTIONS ARE RENDERED INFRUCTUOUS, THEREFORE, DISMISSED. 10. IN THE RESULT, ALL THE APPEALS OF THE REVENUE A S WELL AS CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 15.10.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD, DT : 15 TH OCTOBER, 2010 COPY TO : 1) THE APPELLANT (2) THE DEPARTMENT. 3) THE CIT(A.) CONCERNED (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRA R, ITAT, AHMEDABAD BENCHES LAHA/SR.P.S.