The ITO, Ward-6(4), Ahmedabad V. The Green Environment Services Co.Op.Society Ltd., Ahmedabad

ITA 122/AHD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0638 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 13-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: UKTI PARIKH HE; S N SOPARKAR
• Keywords: Depreciation; Capital receipt; Revenue expenditure
• Section: 6

Judgement Text

ITA NO S . 122, 123 & 124 /AHD/201 4 ASSESSMENT YEAR S : 200 5 - 06, 2006 - 07 & 2 007 - 08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO S . 122, 123 & 124 /AHD/201 4 ASSESSMENT YEAR S : 20 0 5 - 06, 2006 - 07 & 2007 - 08 INCOME TAX OFFICER, WARD 6(4), AHMEDABAD. . .... ..... .. ..... APPELLANT VS. THE GREEN ENVIRONMENT SERVICES CO - OP .. ........... RESPONDENT SOCIETY LIMITED, PLOT NO.244 - 251, PHASE - II, GIDC VATVA, AHMEDABAD 382 445. [A AAAT 1191 N ] APPEARANCES BY PRASOON KABRA FOR THE APPELLANT S.N. SOPARKAR & UKTI PARIKH FOR THE RESPONDENT HEARING CONCLUDED ON: 30 /0 8 / 20 16 ORDER PRONOUNCED ON : 31 /08/ 20 16 O R D E R PER PRAMOD KUMAR , AM: T HESE THREE APPEALS PERTAIN TO THE SAME ASSESSEE, INVOLVE COMMON AND INTERCONNECTED ISSUES AND WERE HEARD TOGETHER, AS A MATTER OF CONVENIENCE, THEREFORE, ALL THESE APPEALS ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 2. WE WILL FIRST TAKE UP ITA NO.122/AHD/2014 FOR ASSESSMENT YEAR 2005 - 06 . 3. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORR ECTNESS OF THE ORDER DATED 1 ST OCTOBER, 2013 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF PENALTY UNDER SECTION 271 ( 1)(C) OF THE INCOME TAX ACT, 1961. ITA NO S . 122, 123 & 124 /AHD/201 4 ASSESSMENT YEAR S : 200 5 - 06, 2006 - 07 & 2 007 - 08 PAGE 2 OF 3 4. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE IMPUGNED PEN ALTY IS IMPOSED IN RESPECT OF THREE ADDITIONS MADE TO THE RETURNED INCOME OF THE ASSESSEE FIRST IS ON SUBSIDY RECEI PT FROM THE STATE GOVERNMENT BEING TREATED AS REVENUE INCOME AS AGAINST CAPITAL RECEIPTS SHOWN BY THE ASSESSEE; SECOND ON DISALLOWANCE OF T HE PROPORTIONATE CO S T OF LAND VALUE FOR SOLID WASTE TANK WHICH WAS CLAIMED BY THE ASSESSEE AS REVENUE EXPENDITURE; AND THIRD IS IN RESPECT OF DISALLOWANCE OF EXCESS CLAIM OF DEPRECIATION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECO RD AND DULY CONSIDERED FACT OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 6 . SO FAR A S THE FIRST ADDITION/DISALLOWANCE IN RESPECT OF WHICH THE IMPUGNED PENALTY IS LEVIED I.E. THE SUBSIDY AMOUNT BEING TREATED BY THE A SSESSING OFFICER AS REVENUE RECEIPT AS AGAINST THE CAPITAL RE CEIPT DISCLOSED BY THE ASSESSEE, W E HAVE NOTED THAT RELATED QUANTUM ADDITION ITSELF HAS BEEN DELETED BY A CO - ORDINATE BENCH OF THIS T RIBUNAL VI D E ORDER DATE D 23.05.2014. ONCE THE QUANTUM ADDITION STAND S DELETED THE VERY F OUNDATION OF THE IMPUGNED PENALTY TO THAT EXTENT CEASES TO BE LEGALLY SUSTAINABLE. THE PENALTY TO THAT EXTENT MUST ALSO GO. 7 . AS REGARDS THE SECOND ADDITION/DISALLOWANCE IN RESPECT OF WHICH THE IMPUGNED PENALTY IS LEVIED, I.E. DISALLOWANCE OF COST OF LA ND VALUE FOR SOLID WASTE TANK, WE FIND THAT ON IDENTICAL SET OF FACTS FOR THE A . Y . 2004 - 05 ANOTHER CO - ORDINATE BENCH OF THIS T RIBUNAL VI D E ORDER DATED 26 TH NOVEMBER , 2010 HAS DELETED THE PENALTY. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO - ORDINATE BENCH. ITA NO S . 122, 123 & 124 /AHD/201 4 ASSESSMENT YEAR S : 200 5 - 06, 2006 - 07 & 2 007 - 08 PAGE 3 OF 3 8 . FINALLY AS REGARDS THIRD ITEM OF DISALLOWANCE IN RESPECT OF WHICH IMPUGNED PENALTY IS LEVIED, WE FIND THAT VIDE ORDER DATED 23 RD MAY, 2014 RELATED QUANTUM DISALLOWANCE ITSELF STAND S REMITTED TO THE FILE OF THE ASSESSING OFFICER . I N VIEW OF THIS DEVELOPMENT , T HE IMPUGNED PENALTY IS NOT LEVIABLE A S WELL. 9 . LEARNED DEPARTMENTAL REPRESENTATIVE HAS ALSO FAIRLY ACCEPTED THAT GIVEN DEVELOPMENT AS ABOVE, THE IMPUGNED PENALTY IS INDEED DEVOID OF LEGALLY SUSTAINABLE FOUNDATION. 10 . IN VIEW OF THE ABOVE DISCUSSION S AND BEARING IN MIND ENTIRETY OF THE CASE, WE UPHOLD THE RELIE FS G RANTED BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 11 . AS REGARDS ASSESSMENT YEARS 2006 - 07 & 2007 - 08, THE IMPUGNED PENALTIE S ARE ONLY IN RESPECT OF SECOND AND THIRD ITEMS DISPOSED ABOVE I.E. DISALLOWANCE FOR COST OF LAND FOR SOLID WASTE T ANK AND DISALLOW ANCE OF EXCESS CLAIM OF DEPRECIATION. RESPECTFULLY FOLLOWING THE CONCLUSION S SO ARRIVED AT BY US ABOVE, WE CONFIRM THE ACTIO N OF THE LEARNED CIT(A) IN DELETING THESE PENALTIES A S WELL. 1 2 . IN THE RESULT, ALL THE THREE APPEALS A RE DISMISSED. PRONOUNCED IN THE OPEN COUR T TODAY ON THE 31 ST DAY OF AUGUST, 2016. SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 31 ST DAY OF AUGUST ,2016 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD