Amruta Organics Pvt. ltd., Nashik V. DCIT, Cir.-1, Nashik

ITA 1121/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1984 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Depreciation; Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI G.S.PANNU, ACCOUNTANT MEMBER. ITA.NO.1121/PN/2011 (ASSTT. YEAR : 2007-08) AMRUTA ORGANICS PVT. LTD., B-24, STICE LTD., SINNAR, NASHIK. .. APPELLANT PAN: AACCA3727D VS. DCIT, CIRCLE-1, NASHIK. .. RESPONDENT ASSESSEE BY : SHRI M.K.KULKARNI DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 21.03.2013 DATE OF PRONOUNCEMENT : 22.03.2013 ORDER PER G.S.PANNU, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A) DATED 23.06.2011 AND ARISES FROM AN ORDER PA SSED BY THE ASSESSING OFFICER DATED 22.06.2010 LEVYING PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AMOUN TING TO RS.64,320/- IN RELATION TO THE A.Y. 2007-08. 2. THE CIT(A) HAS SINCE UPHELD THE PENALTY LEVIED B Y THE ASSESSING OFFICER AND THUS THE APPEAL OF THE ASSESS EE BEFORE THE TRIBUNAL. 3. IN BRIEF, THE FACTS ARE THAT THE APPELLANT IS EN GAGED IN THE BUSINESS OF MANUFACTURING OF PARA CRESYL PHENLY ACC ETATE, A CHEMICAL PRODUCT. THE RETURN OF INCOME FOR THE A.Y . 2007-08 WAS FILED DECLARING A LOSS OF RS.16,99,348/- WHICH WAS SUBJECT TO A 2 SCRUTINY ASSESSMENT U/S.143(3) OF THE ACT DATED 14. 12.2009 WHEREBY THE TOTAL LOSS WAS DETERMINED AT RS.10,44,4 25/-. SUBSEQUENTLY, THE ASSESSING OFFICER HAS HELD THE AS SESSEE GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT WITH RESPECT TO THE AM OUNT OF RS.1,91,085/- DISALLOWED ON ACCOUNT OF A WRONG CLAI M OF DEPRECIATION. ACCORDINGLY, A PENALTY EQUIVALENT TO 100% OF TAX SOUGHT TO BE EVADED ON SUCH INCOME WAS LEVIED AMOUN TING TO RS.64,320/-. THE CIT(A) HAS ALSO UPHELD THE LEVY, AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 4. THE PLEA OF THE ASSESSEE IS THAT THE WRONG CLAIM OF DEPRECIATION WAS MADE WITHOUT ANY INTENTION OF CONC EALMENT. IT WAS SUBMITTED THAT THE DIRECTORS OF THE ASSESSEE CO MPANY ARE TECHNICAL PERSONS NOT KNOWING THE INTRICATE PROVISI ONS OF THE ACT BUT ARE DEPENDENT ON THE ADVICE OF PROFESSIONALS FO R PREPARING INCOME TAX RETURNS. AS PER THE ASSESSEE, IT WAS A MISTAKE WHICH WAS BONAFIDELY MADE WITH NO INTENTION TO EVADE TAXE S. 5. ON THE OTHER HAND, THE LD. DR APPEARING FOR THE REVENUE POINTED OUT THAT THE DEPRECIATION CLAIMED WAS CLEAR LY A WRONG, AND THEREFORE, THE PENALTY HAS BEEN RIGHTLY IMPOSED IN THE PRESENT CASE. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS, WE FIND THAT THE MERE MISTAKE IN MAKING OF A CLAIM IN THE RETURN OF INCOME WOULD NOT IPSO FACTO REFLECT CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN TERMS OF SECTION 271(1)(C) OF THE ACT. THE WRONG CLAIM OF DEPRECIATION IN THE PRESENT CASE CAN NOT BE SAID TO BE MADE WITH AN INTENTION TO EVADE TAXES IN AS MUCH AS EVEN AFTER THE DISALLOWANCE OF DEPRECIATION, THE RESULTANT INCOME OF THE ASSESSEE REMAINS A LOSS. IN FACT, THE ASSESSEE HAD POINTED OUT BEFORE THE ASSESSING OFFICER THAT IT HAS BEEN INCURRING LOSSES SINCE THE YEAR 2003 DUE TO THE MARKET FORCES. CONSIDERING THE ENT IRETY OF THE CIRCUMSTANCES, IN OUR VIEW, THE IMPUGNED DISALLOWAN CE ON ACCOUNT 3 OF DEPRECIATION IS A MISTAKE, AND DOES NOT INVITE T HE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. 7. IN THE RESULT WE SET ASIDE THE ORDER OF THE CIT( A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY IMPOSED U/S .271(1)(C) AMOUNTING TO RS.64,32/-. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF MARCH, 2013. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) ( G.S.PANNU ) JUDICIAL MEMBER ACCOUNTANT MEMBER GSPS PUNE, DATED THE 22 ND MARCH, 2013 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DCIT, CIRCLE-1, NASHIK. 3. THE CIT(A)-I, NASHIK. 4. THE CIT-I, NASHIK. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.