M/s Headmaster Saloon Pvt.Ltd., Chandigarh V. DCIT-Circle-1(1), Chandigarh

ITA 114/CHANDI/2020

AI Insights

This case involves M/s Headmaster Saloon Pvt. Ltd., which appealed against the order of the CIT(A) confirming the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2012-13. The primary contention was regarding the incorrect appreciation of facts and circumstances by the learned Commissioner of Income Tax (Appeals) in upholding the penalty. The Assessing Officer (AO) had made additions to the income of the assessee based on wrong claims of depreciation and non-production of invoices for certain assets. The ITAT remitted the matter back to the CIT(A) for a speaking order on the additional legal ground raised by the assessee, which was not addressed in the initial appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127804 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 15-01-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 29-01-2020
• Other Referred Cases: Price Waterhouse Coopers (P) Ltd. vs. CIT, CIT vs. Sidharth Enterprises, CIT vs. Rajiv Bhatara, Manoj Ahuja vs. Inspecting Assistant Commissioner, CIT vs. Deepak Kumar, Pawan Garg vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 27; 6; 48; 13

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ I N T H E I N C O M E T A X A P P E L L A T E T R I B U N A L D I V I S I O N B E N C H , ‘ A ’ , C H A N D I G A R H B E F O R E SH R I A . D . J A I N , V I C E P R E S I D E N T & SH R I V I K R A M S I N G H Y A D A V , A C C O U N T A N T M E M B E R आयकर अपील सं./ ITA No. 1 1 4 / C H D / 2 0 2 0 नधा रण वष / Assessment Year : 2 0 1 2 - 1 3 M/s Headmaster Saloon Pvt. Ltd. SCO 16-17,Sector 8-C, Chandigarh Vs. बनाम The DCIT, Circle 1(1),Chandigarh थायी लेखा सं./PAN NO: AABCH2736C अपीलाथ /Appellant यथ /Respondent Hearing through video Conferencing नधा रती क ओर से/Assessee by : Sh. Tej Mohan Singh, Advocate राज व क ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr.DR स ु नवाई क तार%ख/Date of Hearing : 16.01.2023 उदघोषणा क तार%ख/Date of Pronouncement : 27.01.2023 आदेश/Order Per A.D. Jain, Vice President: Th i s i s a ss es se e ’ s ap p e a l f or a s se s s m e nt y e a r 20 12 -1 3 a g a i n s t t h e CI T( A ) o rd e r d a t e d 19 . 1 2. 20 19 c o n f i r m in g t h e l e v y of pe na l t y u / s 27 1( 1 )( c) o f t h e I nc o m e T a x A c t, 1 9 61 ( he re i n a ft e r c a ll e d ' t h e A c t ') . 2. Th e f ol lo w i ng g ro u nd s h av e b e e n r a is e d : - 1. T ha t t h e L e a r ne d Co m m i s si on er o f I n co m e T ax ( A ) ha s f a i l e d t o ap pr e c ia te t h e fa ct s a n d c ir c u m s ta nc es of t h e c a s e a nd h a s th er e b y e rr e d in up h o l d i n g pe n a l ty u/ s 27 1 ( l )( c ) of th e I nc om e T a x A c t, 19 61 on m e ri t s a s w e l l a s i n l aw. T h e di r ec t i o n of t h e H on ' bl e I T AT ha d be en b r us he d a si d e wi t h ou t ap pre c i a t i n g t he f a ct s a nd l e g al i t y o f t he c a se . 2 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh 2. T ha t t he re w a s no c on c e a l m e n t o f i nc om e o r f ur n i sh i n g o f a ny i nac c u ra t e pa rt i c u l ar s of in c om e an d a l s o t he A ss e s si n g O ff i c e r h ad e r red i n f a i l i ng t o m e n t i on w he t h e r n ot i c e u / s 2 7 1 ( l ) ( c ) of t h e In c om e T a x A c t, 1 9 6 1 w a s i ss ue d f o r c on c e al m e n t of i n c om e o r f ur n is h i ng o f a n y i n a c c u r at e pa rt i c u l a r s o f in c o m e. 3. A t t h e o ut se t, th e l d . c o un sel f or th e ass e s se e h a s c on t e nd e d t h a t he do es n ot w i s h t o pr es s g r o u nd N o. 2. Re j ec t e d, as n ot p r es s e d . 4. A p ro po s gr ou n d N o. 1, i n t he a s se s s m en t pr oc e e d i ng s, th e A sse s si ng O f fi c e r ( A O ) no t i c e d t ha t d ur i n g t h e F . Y . 2 01 1 -1 2, r e l ev a n t t o t he a ss e s s me n t ye a r un d e r c o n si de ra t i on, i . e . , a ssess me nt y e ar 2 0 1 2 - 13 , t he re w a s a n i n c r e a se o f Rs. 2 , 68, 1 2, 42 5/ - w o rt h o f f i xe d a s se t s o f t he a ss e s se e . A s p er t he t a x A u d i t R e p o r t , ma j o r c a pi t al e x pe nd it ur e h a d be e n i n c u r re d on t h re e i t e ms , a s un de r: - Item purchased Name of the party Bill No. Date Date when put to use Amount Purchase of saloon Plants / Equipments etc. Pevonia Spa Care Pvt. Ltd. 008/PSC/201 25-Sep-ll 25-Sep-ll 1,32,09,000 Purchase of saloon Plants / Equipments etc. Pevonia Spa Care Pvt. Ltd. 007/PSC/201 25-Sep-ll 25-Sep-l 1 72,17,520 Plant & Machinery purchased Purchase Imprest - 10-Nov-ll 10-Nov-ll 27,94,120 5. Th e A O fur t h er n o t i c ed t ha t t h e a sse s se e h a d ca pit a l iz e d i nt e re st a mo u nt i ng t o R s. 6 , 95, 8 36 / - , w hi ch i n di c a t e d th at so me m ac h i n e r y h a d no t be e n p u t t o us e, fo r w hi c h, t he i nt e re st h a d b ee n c a p it a l iz e d. F r o m 3 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh t he b i l l s p ro d uc ed b y t he a s se ss e e, th e A O ob se r v e d th at i n v oi c e s w e r e da t e d 7 . 10 . 2 0 1 1 o n th r e e i t e m s, th e a s se s se e ha d c la i me d th a t t h e a s se t s ha d be e n p ut t o u s e o n 2 5. 09 . 2 01 1. T hu s, t he A O found t he a s se s se e t o be cl a i m i n g de pr e c i a t io n @ 15 % , i. e . , f or t h e f ul l ye a r, w h er e as i t w as e l i g i b l e f or d e p re c i at i o n @ 7 . 5 %, i . e . , for ha l f y ea r o nl y. A s su ch , de p r e ci a t i o n o f R s . 15 , 31, 9 8 9, w as di s a l l ow e d a n d wa s ad de d t o t he i nc o m e o f t he a s se s s ee . 6. Th e A O fu r t h e r ob ser ve d t ha t t h e a s s es s ee ha d n ot b e e n a b l e t o pr o d u c e i nv o i ce s fo r th e a s se t s p u r c ha se d fo r R s. 27 , 9 4, 12 0 / -. T h e a ss e s se e h a d st a t e d t ha t it h ad l o s t th e b i l l s. T h e A O ob ser ve d t h a t a s pe r t h e t a x A ud i t Re por t, t h e i t e m s ha d b e en b oo k e d u n de r t h e h e a d ‘P l a n t a n d M a c hi n e ry ’. F r o m t hi s, t h e A O w a s o f t he v i e w th at th e a ss e s se e ’ s a u d i to r ha d no t v er i fi ed as t o w hi c h i t em h a d be e n p ur ch a se d , a s t he re w a s n ei t h e r an y b i l l n u mb e r, n or an y p a r t y na m e, w hi ch c ou l d ha v e h e l p e d t he a s se s se e t o e st a b l is h t he p u rc h a se t o b e g en ui ne . T hu s, t he A O o b se rv ed t h a t th e a ss e t s h a d i n fa ct n ot be en p u rc ha s e d a n d w e r e no t p ut t o u se . A s suc h, d e p r e c ia t i o n o f R s. 2, 0 9 , 55 9 / - w a s d i s a l l o w ed a nd a d d e d ba ck t o t h e i nc o m e o f t h e a ss e s se e . T he WD V of th e t o t a l fi x ed a ss e t s w a s r e duc e d b y an a m o u n t o f R s. 27, 9 4,12 0 / - . 7. Th us, t h e A O , b y v i rt u e o f t h e a ss es s m e nt o r d er d a t e d 2 9 . 09. 2 0 15 , m a d e a d d i t i on o f R s. 1 5, 3 1 , 98 9 / - on ac c o un t o f w r o ng c l a i m o f 4 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh de p r e ci a t i o n a n d t ha t o f R s. 2, 0 9, 55 9/ -, on a c c o u nt of c l a i m o f de p r e ci a t i o n o n pu r ch a se o f ma c hi ne ry of R s. 27, 9 4,1 2 0/ -. 8. Th e a ss e s se e d id n o t pr e f e r a ny a pp ea l ag a in st th e a fo r e s a i d ord er . 9. In t h e p e n a l ty p r o c e ed in gs, t h e a ss e s s e e w a s a ske d to s h o w c au se a s t o w hy p en a l t y b e n ot i m p o s e d u / s 2 7 1( 1 ) ( c ) o f th e A c t, fo r f u r n i s hi n g o f i n a c c u r a t e pa r ti c ul a r s o f i n c o m e . T h e a ss e s se e ma i n t ai n e d t h e st a n d t a k e n du r i n g t h e a sse ss me n t pr oc ee di n g s. Wi t h r e g a rd t o t h e i ss u e o f a dd i t i o n o n a c c ou n t o f w r o n g c l a i m o f d e p r e c ia t i o n o f R s. 15 , 31 , 9 89 / - , t he a s s es se e st a t e d t ha t t h e a s se t s h ad b e e n r e ce i ve d i n a d va n c e , w he r e a s t he b il l s w e re r e c e i ve d l a t e r . T h i s, ho w ev er , c ou l d n o t b e s ub st an ti a t e d by p ro du c i ng a n y e vi d e n c e r e g a r di n g r e ce i p t o f m a c hi n er y. It c o ul d a l s o no t be p ro ve d th a t t he m ac hi n er y h a d b e en p u t t o use i n S e pt e m b e r , 20 11 . T he A O w a s , th us, o f t he vi e w , t ha t th e a ss e ssee ha d fa i l ed t o pr o d u c e a ny c on c r e t e e v i d e n c e o r e xp l a n a t i o n a n d i t h ad , t h e r e fo re , fa i l e d to di sc ha rg e i t s o nu s. 10 . Co n ce rn i n g t h e se c on d i s su e o f d i s al l ow a n c e o f de pr ec i at i o n a mo u nt i ng t o R s. 2, 0 9, 55 9 / -, i n t h e r e pl y to t he s how c a u se no ti c e , t he a ss e s se e me re ly s t a t e d t h a t t h e p u rc ha se bi l l s ha d b e en mi sp l a c ed . T h e A O obse r ve d t h a t s uc h c o n te n t i o n o f t he a sse ss e e c ou l d n ot b e ac c e p t e d , si n c e i f t h e bi l l s h a d be e n mi sp l a c e d , t h e a s se ss ee c o ul d h a v e go t a no t h er c o p y o f t h e b i l ls fr o m t h e v e nd or, or , a t le a st , i t c o u l d h a v e su b mi t t ed d e t ai l s o f t h e p a r ti e s / ve nd o r s f ro m w h o m i t h a d pu rc ha se d t he 5 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh m ac hi n e r y on w h i c h t h e d e pr e c i a ti o n ha d be en c l a i med ; t ha t , ho w e v er , t he a s se s s ee h a d d on e n e it he r ; a nd t h a t t h u s t he a ss e s se e h a d fa i l e d t o pr o v i d e a ny c o nc r e t e e v i d e n c e o r e xp l a n at i o n w it h re ga rd t o t h i s a dd i t i o n a l so a n d h a d, t he re b y, f ai l e d t o di s c h a r g e i t s on u s. 11 . Th e A O , t h u s, i mp ose d a p en al t y o f R s. 6, 0 0, 00 0/ - b ei n g 1 1 1. 5 % o f t he t a x so ug h t t o b e e v a d e d , ho l di ng t h a t th e a sse ss e e h a d fu r ni sh ed i na c c u r a t e p ar ti c ul a rs o f i ts i n c o m e . 12 . Th e l d. CI T( A ), b y v i r t ue o f o rd er d a t e d 2 7. 0 8.2 0 1 8, u p he l d t he l e v y o f p e na l t y . 13 . Th e a ss es s e e pr e fe r re d an a p p e a l be fo re t he I T AT, w he re i n, t h e fo l lo w i n g a dd i t i on a l gr o un d w a s ra i s e d :- “ T ha t th e L d . A O h a s e r re d i n l a w i n f ai l i n g t o m e nt i on w h e t h er n o ti c e u /s 2 7 1( 1) ( c ) is s ue d wa s f or c on c e al m e nt o f i n c om e or f u r ni s hi ng o f i n a c c u r a t e pa rt i c u l a r s of in co m e a n d a s s uc h p e na l t y i m po se d an d up h e l d by t h e Com m i ssi o n er o f I n c om e T a x (A p p e al s) i n p u r s ua n ce o f a n i n v a l i d n o t ic e i s i l l e g a l , a r bi t ra ry & u nj u st i f i e d. ” 14 . Th e IT A T , vi d e o r d e r d a t ed 0 5. 0 7 . 2 0 1 9, r e mi t te d t he m a t te r t o t h e fi l e o f t h e L d. CI T ( A ), f or p a ss i n g a spe ak in g o r d er o n t he a d di t i o n a l l e g a l g r ou nd. I t w a s fu r t he r d i r e c t ed t h a t i n t he ev en t ua li t y o f t he a ss e s se e no t s uc c e e d i n g on t he le ga l gro un d , t h e i ssue be d e c i de d o n m er i t s. 6 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh 15 . By v i rt u e o f t h e i m p u gn e d o r d e r d a t e d 19 . 1 2. 2 0 12 , t h e L d . C IT (A ) di s m i ss ed t h e a p pe a l o f t h e a ss e s se e i n t o t o, i . e . , on b ot h, t h e l e g a l a s w e ll a s t he re gu l a r g ro u n d o n m er it s. 16 . A g gr i e v e d , t h e a ss e sse e i s a ga i n in a p p e a l b e f or e u s . 17 . Ch a l l e n g i ng t h e i m pu g ne d o r d e r, t h e l d. c ou ns e l f or th e ass e s se e ha s c o n t en de d t h a t w hi l e w r on gl y co n fi r m i n g t he p e na l t y l e v i ed o n t he a ss e s se e , t he l d . C I T (A ) h as e rr e d i n b ru s hi ng a si de l ig ht l y th e d i r e c t i on s i ss ue d by t h e T ri bu na l i n t h e fi rs t r ou nd, w it h o ut a p p r e c i a t i ng t h e fa c t s a nd l e ga li t y o f t he c as e ; t h at th e l d. C I T( A ) fa i l ed t o a p p r ec i a t e th at t h e a ss e s se e d i d no t f u rn i s h a ny i na c cu r a t e pa rt i c ul a r s o f i ts i nc o m e , b u t t he re w a s a m i s ta k e on th e p a r t o f t h e Ch ar te r ed A cc o u nt a n t ; t ha t th e da t e o n t h e i nv o i c e in th e b i l l s w a s 07. 1 0. 20 11, w he r e a s t he au di t or s h a d a pp e n de d t he d a t e o f t h e a ss e t s b e i n g pu t t o u se, as 25. 0 9. 20 11, o n t h e ba s i s o f t he as se t s re c e i ve d i n a d va n c e ; t ha t t h e as se ss ee di d no t fu rn i s h a ny i na cc ur a te p a r t i c u l a r s o f i nc o m e, ra t he r d e p re ci a t i o n ha d b e e n c l a i m ed o n t he b a si s o f t he w or k i n g d o n e by t h e a u di t or s a n d t h e a ss e s se e ha d d i s c ha r g e d i t s o nu s o n th e b a si s o f c al c u l a t io n o f de p r e ci a t i o n, a s d on e b y t h e a u d i t o rs; a nd t ha t o the r w i se t o o, t he a ss e s se e c o mp a n y be i ng i n p r o fi t y e a r t o ye a r, r e d uc t i on o f de pre c i at i o n i n on e y e a r w ou l d h a v e h a d a n i mp ac t o f h i ghe r de prec i a t i o n i n t h e su b se qu e n t ye a r. S o fa r as r e g a rd s t h e se c on d is su e o f di sa l l ow a n c e o f 7 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh de p r e ci a t i o n i n t h e a b se nc e o f p ur ch as e bi l l s, t h e l d . C o un se l fo r th e a ss e s se e su b mi t te d t ha t s u c h di sal l o w a nc e w a s mi sp la c e d a s t h e s a m e do e s no t a m o un t to fu rn i s h in g o f i n a c c ur a t e p a r t i c ul a r s o f i n c o me ; a n d t ha t d u p li c a t e bi l l s c o u l d n ot be o b ta i ne d, a s t h e p a r t y co n c e rn e d h a d c l o se d sh o p. 18 . In s up p o r t o f i t s c a se , t h e ld . Co un se l f or t he a ss e s se e h a s p l a c ed re l i a n ce o n t h e fol l ow i n g d e c i s i o n s :- Name of the Decision Citation 1. Price Waterhouse Coopers (P) Ltd. vs. CIT 348 ITR 306 (SC) 2. CIT vs. Sidharth Enterprises 322 ITR 80 (P&H) 3. CIT vs. Rajiv Bhatara 360 ITR 121 (P&H) 4. Manoj Ahuja vs. Inspecting Assistant Commissioner 150 ITR 696 (P&H) 5. CIT vs. Deepak Kumar 232 CTR 78 (P&H) 6. Pawan Garg vs. ACIT 94 ITR (AT) 159 (Chd. Trib.) 19 . O n t he ot he r h a n d, t he L d. D R ha s p l a ce d s t r on g r e l i a n c e on t h e i mp u gn e d o rd er . I t ha s be e n s ub m i tt e d t ha t pl e a o f mi s t a k e , e ve n i f i t i s a bo na fi d e mi st ak e , ca n n ot b ai l ou t t he a sse s s ee fro m l e vy o f p e n a l t y ; t ha t n o n f u rn i s hi n g o f ev id e n c e to su p p or t t h e c la im ma de d oe s n o t a mo u nt t o f ur n i s h i ng o f i na cc u ra te p a r t i c ul a rs o f in c o m e ; a n d t h a t t h e or d e r u n de r a p p e al ha s c or re ct l y c on f i r m e d t h e le v y o f pe n a l t y , w h i c h or d e r b e c on fi r m e d w hi l e d is m i ss i n g t h e a pp e a l fi l ed b y t h e a ss es s e e . 8 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh 20 . H e a rd . T he fa c t s a r e no t i n d i s p ut e . T he i ss ue i s a s t o w he t he r i n t he g i v e n c i r c u m s t a n c e s, t h e as se ss e e c o ul d b e he l d t o ha v e fu rn i s h e d i na c c u r a t e pa rt i cu l a r s o f i nc o m e , t h e re b y r at i fy i n g th e l e v y o f t h e i mp u gn e d p e n a lt y. Q ua th e fi r st i ss u e , i t r e ma i ns un d i s put e d t h a t t h e de p r e ci a t i o n w a s c l a i m e d by t he a ss e s s ee , a s w o rk e d o u t b y t he a ud i t or s. It i s a ls o n ot i n qu e st i o n t ha t t he a ss e sse e c o mp a ny i s ru n ni ng i n pr o fi t fr o m y ea r t o y e a r a nd i f de pr ec i a t i o n w e re t o b e r ed u c e d i n o ne y ea r , i t w ou l d h a v e l e d t o i n c r e a se i n d e pr e c i a t i o n i n t h e su bse q u e nt y e ar . T h u s, t he re i s no c as e o f fu rn is h i n g o f i n a c cu r a t e p a r t i cu l a rs o f i n c o me . T he c l a i m w a s a b o n a fi de c l a i m ma d e b y t he a ss e s se e o n th e w or ki ng o f t h e a ud i t or s. 21 In ‘P ri c e W at e r ho use C oo p e r s ( P) L t d. V s. C I T ’, 3 48 IT R 3 0 6 (S C ), t he a s se s se e fi r m fi l e d i t s r e t ur n o f i nc o m e a l o n g w i t h t a x A u d i t Re po r t . I n t h e A u di t R e p o r t , i t w a s i nd i c a t e d t ha t pr ovi si on t ow a r d s pa y m e nt o f g ra t u i t y w a s n o t a ll o w a b l e . H ow e v er , t h e a s se s se e fa il e d t o a dd p r ov is i o n fo r g ra t ui t y t o i t s t ot a l i nc o m e . I t w a s h e ld t h a t t hi s w a s a bo na f i d e a n d i na dv e r t e n t er ro r; t h a t t he a ss e s se e w as no t g u i l t y o f e i t h e r fur ni sh i n g o f i na c c ura t e p ar t i c ul a rs o r a t t emp ti n g t o c on c e al i t s i nc o m e ; a n d t h a t, t he r e f or e , i mp os i t io n o f pe na l ty w a s u nj u st i fi e d. In t he p re se nt c a se, s i mi l a r l y, d ep r e c ia t i o n w as c l a i me d o n t he b as i s o f w or ki ng o f t h e a u d i to r s o f t h e a s se ss ee . Th i s h a s no t b e e n sh ow n t o b e a m al a fi de c o nd uc t o f t he a sse ss ee . 9 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh 22 . In ‘ CI T V s. S i d h a rt ha En te r pr i s e s ’, ‘“ 3 2 2 IT R 80 (P & H ), t he a ss e s se e c l a i me d s e t o f f o f c a p i t a l l oss o n s a l e o f m a ch i ne ry a g a i n st pr o f i t o f b us i ne ss. T he A O d isa l l ow e d t he a s se ss e e’ s c la i m a nd i m p o s e d pe n a l t y fo r fu r n i s h i ng o f i na cc ur a te p ar t i c ul a rs. Th e C IT (A ) a s w e l l a s t he T ri b u na l d el e t e d t he p e n a lt y, r e c o rd i ng a fi n din g t h a t t h e f u r n i s hi n g o f i n a c c u r a te pa r t i c ul a r s w a s si mp ly a mi s t a k e a n d n o t a d el i be ra t e a t t e m pt t o e va d e t ax . I t w a s h e l d by t he H on ' bl e H igh Cou rt t h a t t h e pe n a l t y u/ s 27 1 ( 1 )( c ) o f t h e I . T. A c t i s i mp o se d o nl y w h e n t h er e i s so m e e l e m e nt o f d el i b e r a t e d e f a u l t, a nd n o t fo r a me r e mis t a ke ; an d t ha t i n t ha t c a s e, de le t i o n o f pe na l t y w a s j u st i f ie d. Th e fa c t s o f t he p re se n t c as e, a s di s c u ss e d, a re o n s i m i la r l i n e s . 23 . In ‘C IT V s . Ra j i v Bh a t a ra ’, 3 60 I T R 1 2 1 (P & H ), t he a s s e ss e e h a d fu r n i sh ed a C e r t i fi c a te fr o m th e S u b-D i vi si on al E ngi n e e r o f th e P WD , t o t he e ffe c t t h a t t he d i st an ce fr o m t he S o ne p a t M un i ci p a l C o mm i t te e t o t h e c on c e rn ed v i ll a g e , w h er e a gr i cu lt ur a l l a nd w a s p urch a se d, w a s 8 . 2 K M s. V a ri o u s c e r t i fi c a t e s w e re a l so av a i l a bl e , w h er e i n , di s t a n ce h a d b e e n m e n t i o n e d re g a r di n g th e p ro pe rt y i n q ue s t i o n. T he Ho n 'b l e H i g h C ou r t he l d t h at on fa c t s, th e r e w a s no i nt e n t i on on t he pa r t o f t he a sse ss ee t o fu r n i sh i na c c u r a t e pa r t i c u l ar s a nd , he nc e , n o c o n c ea l me nt p e na l t y c o u l d be l e v i e d on t h e a s se s se e . I n t h e c a s e at h a n d a l so, a s d i sc us se d , th er e w a s n o i n t e n t i o n on t he pa rt o f t h e a s se ss e e t o fu rn ish i n a c c ur a t e pa r ti c u l a r s. 10 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh 24 . In ‘ M a n o j A h uj a V s. In s pe c ti n g A s si s t a nt Co mm i ssi o n e r ’ , 1 50 I TR 69 6 (P & H ), fo ll ow i n g ‘S m t. N i r ma l K ho s la V s. U n io n o f I n di a ’, A IR 19 76 P u n j a b & H a rya n a 2 2, i t w a s h el d t ha t no l it iga nt sh ou l d or d i n a r i l y s u ff e r for a mi s t a k e o f h is c o un se l . D el a y i n fi li ng t he a pp e a l , i n cu rr e d d u e t o w r on g ca l c u l a t i on b y t h e coun se l , w a s c on d o n e d . In th e c a se b e f o r e us a l s o, un d i s pu te dl y, d e p r e ci a tio n w a s c l a i m e d o n t he b a s i s o f w o r ki n g o f th e a ud it o r s. 25 . In ‘ C IT V s. D ee pa k K u ma r ’ , 23 2 CT R 7 8 ( P &H ) , w he r e p e na l t y w a s l e v i e d o n t h e a s se ss e e o n t h e gr o u n d t h at t h e ass es se e h ad w r o n g l y c l a i m ed de p r e ci a ti o n u / s 1 0( 3 6 ) o f t h e A c t , b ut t he T ri bu na l fo un d t h a t t he a s se ss e e h a d a c te d o n t he a dv i c e o f h is c o u n se l, t h e H o n 'b le H i gh Co ur t h e l d i t to b e a c as e o f bo n a f i d e m i st a k e a nd n ot a f i t c a se fo r l e vy o f pe na l t y u/ s 2 71 ( 1) ( c ) o f t he A c t. T he p r e s e n t a ss es se e be fo re u s, t o re i t e r a t e , ha d, l i k e w i se , a c t e d o n t h e a d v i c e o f t he a ud i t or s a n d i t w a s no t h e l d to be a m a la fi de a c ti on . 26 . In ‘P a w a n G a r g V s . A CI T ’ , 9 4 I TR ( A T) 1 5 9 ( C hd. T r i b. ), t h e a ss e s se e h ad w r o n gl y cl a i me d l o ng- t e r m c a pi t a l l os s i n r e s p ec t o f a pr o p e r t y w hi c h h a d b ee n g i ft e d b y h i m t o hi s s o n. Si n c e t he a m ou n t o f c ap i t a l l o ss h a d be e n du l y di sc l o se d i n t h e c o mp u t at i o n o f in c o me a n d t he as s e ss e e ha d a lso ac c e p t e d a t th e t i me o f as se ss m e n t p ro c e e di ng s, t ha t by m i s t ak e, h e h a d c o n si de re d th e g i f t ma de to h i s so n a s a t ra ns f e r , t h e a ss e s s e e w a s h e l d n ot t o ha v e co nc e a le d a n y ma t e ri a l fa c t , 11 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh a nd le vy o f pe na l t y u/ s 27 1( 1) ( c) o f t he A c t w a s hel d n ot j us t i f i e d . In t he ca se a t ha nd, s i m il a r l y, t he a s se sse e h a d c l a i me d de pr e c i at i o n o n t he a dv i c e o f i t s a u d i t or s. T h i s w a s a b on a fi d e cl a i m, m a y be a w r o ng c l a i m. O t h e r w is e t o o , t he a s se ss ee e a r n i ng pro fi t s y e a r t o ye a r, re d u ct i o n o f d e p re c i a t i o n i n o n e y ea r w o u l d h av e ha d t h e i mp ac t o f h i g he r de p r e ci a t i o n i n t h e su bs e q u e n t ye ar . 27 . N o de c i si o n c o n t ra r y t o t h e ab o ve d e c i s io ns h a s b e e n c i t e d. 28 . A p ro po s t he is su e o f de pre c i at i o n o n p u r c h as e of m a ch in e r y, a s pe r t h e a ss es se e , t he du pl ic a t e b i l l s c ou l d n o t b e pr od u ce d , a s t he ve n d o r h a v i n g c l o s e d sh o p, t he as s e ss e e c o u l d n o t ob t a in th e s a m e, w h en t he o r i g i n a l b i l l s st o o d m is p l a c e d. H ow e ve r , a s r igh t l y o bse r v e d by t h e l d. CI T( A ), i n t he e v e n t o f t he a ss e s s e e n o t be in g a bl e t o o bt a i n c o p i e s o f t h e b i l l s fr o m i t s ve nd or, i t ou g h t t o h a v e p ro vi de d t he de t a i l s o f su ch ve n d o r t o t h e D e p a r t m e nt s o a s t o e na bl e i t t o a sce r t a i n t h e f ac t u a l po si t i o n . T h e a sse sse e n o t ha vi ng d o ne so , a n a d v e rs e i n f e r e n c e w a s c or re ct l y dr a w n a g a in st t he a s se sse e a nd t h e p e n al ty w a s ri gh tl y l ev i e d . H ow e ve r , t he pe na l t y ou g h t t o h a v e be e n l e v ie d a t th e m i ni mu m r a t e , i . e. , 10 0 % a nd n ot @ 1 1 1. 5 % , a s h a s be en d on e. The A O i s di re c t ed t o sc a le d o w n t he l e v y of p en a lt y o n t hi s c ou n t a c c o rdin gl y. 29 . In v i e w o f t h e a b ov e, o n t he fi r st iss u e , i . e . , w ron g c l a i m o f de p r e ci a t i o n o f Rs . 15 , 31, 9 8 9/ - , t h e p en al t y l e v i e d i s de l e t e d. T h e pe n a l t y l e v i e d on t he s e c on d i s su e , i. e . , o f di sa llow a nc e o f d e p re c i a t i on 12 ITA No. 114/Chd/2020 – M/s Headmaster Saloon Pvt Ltd.,Chandigarh o f R s. 2, 09 , 5 50 / -, is d ir ec t e d t o be sc a l e d d o w n fr o m t he ra t e o f 1 1 1. 5 % t o t h e ra t e o f 1 0 0 % . O rd e re d a cc or di n g ly . 30 . In t h e re s u l t , t he ap pe a l i s pa rt l y a l lo w ed . O r de r p ro n o u n c e d on 2 7. 01 . 2 02 3. Sd/- Sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 27. 01.2023 “आर.के .” आदेश क त,ल-प अ.े-षत / Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु 2त/ CIT 4. आयकर आय ु 2त (अपील)/ The CIT(A) 5. -वभागीय त न7ध, आयकर अपील%य आ7धकरण, च9डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar