The DCIT, Circle-1, Ahmedabad V. M/s. Bhagwati Banquets & Hotels Ltd., Ahmedabad

ITA 1299/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8159 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Depreciation; Assessment record; Revised return; Unabsorbed depreciation
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 1, AHMEDABAD (APPELLANT) VS M/S. BHAGWATI BANQUETS & HOTELS LTD. 73, WHITE HOUSE, PANCHVATI, AHMEDABAD - 380007 PAN: AABCB6825A (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASS ESSEE BY: S H RI S.N. DIVATIA , A.R. DATE OF HEARING : 07 - 11 - 2 017 DATE OF PRONOUNCEMENT : 13 - 11 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2007 - 08 , ARIS ES FROM ORDER OF THE CIT(A) - 6, AHMEDABAD DATED 11 - 02 - 2014 , IN PROCEEDINGS UNDER SECT ION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - I T A NO . 1299 / A HD/20 14 A SSESSME NT YEAR 200 7 - 08 I.T.A NO. 1299 /AHD/20 14 A.Y. 2007 - 08 PAGE NO DCIT VS. M/S. BHAGWATI BANQUETS & HOTELS LTD. 2 .27 LACS LEVIED U/S 271(1)(C) D ESPITE THE FACT THAT THE CORRESPONDING QUANTUM 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.25 ADDITIONS WERE ALREADY CONFIRMED BY THE CIT(A). 2. THE CIT(A) HAS NOT APPRECIATED THE FACT THAT THE ASSESSEE HAD CLAIMED DEDUCTIO N OF SERVICE TAX EXPENSES IN CONTRAVENTION OF SECTION 43B AND HAD ALSO CLAIMED UNDUE SET - OFF OF BROUGHT FORWARD LOSS IN THE RETURN OF INCOME WHICH TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME LIABLE TO PENALTY U/S 271(1)(C) OF THE ACT. 3. IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 2 , 99 , 7 0,540/ - WAS FILED ON 30 TH OCTOBER , 2007. THE ASSESSMENT U/S. 143(3) OF THE ACT WAS MADE ON 2 1 ST DECEMBER, 2009 .THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 52,83,602/ - ON ACCOUNT OF NON - PAYMENT OF SERVICE TAX U/S. 43B OF THE ACT . T HE ASSESSING OFFICER HAS ALSO NOTICED DURING THE COURSE OF ASSESSMENT THAT ASSESSEE HAS CLAIMED SET OFF OF BROUGHT FORWARD LOSS FOR ASSESSMENT YEAR 2004 - 05 TO THE AMOUNT OF RS. 33 , 94 , 240/ - WHEREAS AS PER TH E ASSESSMENT RECORDS, THE ASSESSING OFFICER HAS NOTICED THAT THE BROUGHT FORWARD UNABSORBED DEPRECIATION WAS ONLY TO THE AMOUNT OF RS. 22 , 24 , 903/ - . CONSEQUENTLY, THE ASSESSING OFFICER HAS RESTRICTED THE CLAIM OF SET OFF OF BROUGHT FORWARD LOSS/DEPRECIATIO N TO THE AMOUNT OF R S . 22 , 24 , 903/ - THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCES MADE IN THE CASE OF THE ASSESSEE. . ON BOTH THE DISALLOWANCES THE ASSESSING OFFICER HAS INITIATED PENALTY U/S. 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS O F INCOME. T HE ASSESSING OFFICER OBSERVED THAT HAD THE ASSESSEE S CASE NOT BEEN SELECTED FOR SCRUTINY, THE ASSESSEE COULD HAVE BEEN BENEFITED BY FILING INACCURATE PARTICULARS OF INCOME. CONSEQUENTLY, THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS. 25 , 27 , 3 62/ - FOR FURNISHING INACCURATE PARTICULARS OF INCOME. I.T.A NO. 1299 /AHD/20 14 A.Y. 2007 - 08 PAGE NO DCIT VS. M/S. BHAGWATI BANQUETS & HOTELS LTD. 3 4. AGGRIEVED AGAINST THE DECISION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 3.2 IMPUGNED PENALTY WAS LEVIED W.R.T. TWO DISALLOWANCES. MY FINDINGS ISSUE - WISE ARE AS UNDER: : (I) DISALLOWANCE U/S 43B OF RS. 52,83,602/ - : IN THE ASSESSMENT ORDER A.O. OBSERVED THAT PERUSAL OF FORM 3CD REPORT SHOWED THAT THE AUDITOR HAD NOT MENTIONED THE DATES OF PAYMENTS AGAINST CERTAIN ITEMS OF SERVICE TAX TOTALING TO RS. 52,83,602/ - ; APPELLANT PRODUCED DETAILS OF PAYMENT OF THESE ITEMS, ON PERUSAL OF WHICH IT WAS SEEN THAT THE PAYMENTS WERE MADE AFTER THE DUE DATE FOR FILING THE RE TURN OF INCOME AND THEREFORE THE SAID AMOUNT WAS BEING DISALLOWED U/S 43B. APPELLANT DID NOT PREFER APPEAL AGAINST THE SAID DISALLOWANCE. THE CONTENTIONS OF THE ID. A.R. ARE THAT ALL THE NECESSARY DETAILS WERE FURNISHED IN THE TAX AUDIT REPORT; WHEREVER TH E PAYMENTS WERE NOT MADE, THE DATE OF PAYMENT WAS LEFT BLANK IN THE AUDIT REPORT; BY INADVERTENT MISTAKE, THE SAID AMOUNT WAS NOT ADDED BACK IN THE COMPUTATION OF INCOME; APPELLANT COMPANY CLAIMED DEDUCTION OF THE SAID AMOUNT IN THE SUCCEEDING ASSESSMENT Y EAR 2008 - 09 IN THE REVISED RETURN FILED; THE SAID CLAIM OF DEDUCTION WAS ALLOWED; THUS THERE WAS NO LOSS OF REVENUE AND THEREFORE , LEVY OF PENALTY WAS NOT WARRANTED. I HAVE CONSIDERED THE FACTS OF THE MATTER. AS SEEN FROM THE ASSESSMENT ORDER THE DISALLOW ANCE WAS BASED ON THE FORM NO. 3CD REPORT AND THE SUBSEQUENT FURNISHING OF DATES OF PAYMENT BY THE APPELLANT. THE AMOUNT DISALLOWED DURING THE YEAR WAS CLAIMED AND ALLOWED IN THE SUCCEEDING ASSESSMENT YEAR. APPELLANT CANNOT BE SAID TO HAVE FURNISHED INACCU RATE PARTICULARS OR CONCEALED INCOME. I AM OF THE VIEW THAT LEVY OF PENALTY IS NOT IN ACCORDANCE WITH LAW. RELIANCE IS PLACED IN THIS REGARD ON THE CASE OF PRICE WATERHOUSE COOPERS (P) LTD. VS. CIT. [2012] 11 SCO 316. (II) DISALLOWANCE OF BROUGHT FORWARD D EPRECIATION OF RS. 11,69,337/ - : IN THE ASSESSMENT ORDER A.O OBSERVED THAT APPELLANT HAD CLAIMED SET OFF OF BROUGHT FORWARD LOSS OF RS. 33,94,240/ - ; HOWEVER PERUSAL OF THE \ / ASSESSMENT RECORDS SHOWED THAT THE BROUGHT FORWARD LOSS WAS ONLY RS. 22,24,903/ - A ND THEREFORE THE EXCESS SET OFF CLAIMED WAS BEING DISALLOWED. NO APPEAL WAS PREFERRED BY THE APPELLANT ON THIS ISSUE. THE CONTENTIONS OF THE ID. A.R. ARE THAT BOTH THE RETURNED LOSSES AND THE ASSESSED LOSSES OF EARLIER YEARS WERE PART OF THE RECORD WITH TH E A.O; THE LOSSES AND DEPRECIATION KEEP ON CHANGING AS A RESULT OF ASSESSMENT AND APPELLATE PROCEEDINGS AND THEREFORE APPELLANT COULD NOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS. THE CONTENTIONS OF THE ID. A.R. ARE COGENT AND TENABLE. A.O. IS DUTY - BOUND TO CONSIDER THE CORRECT FIGURES OF BROUGHT FORWARD UNABSORBED LOSSES/DEPRECIATION W.R.T. THE ASSESSMENT RECORDS. LEVY OF PENALTY ON THIS ISSUE IS NOT IN ACCORDANCE WITH LAW. RELIANCE IS PLACED IN THIS REGARD ON THE ALLAHABAD TRIBUNAL JUDGEMENT IN TH E CASE OF ACIT. VS. A.H. WHEELERS & CO.(P) LTD. [2011] (142 TTJ 112). 3.3 TO SUM UP IMPUGNED PENALTY ORDER IS CANCELLED. THESE GROUNDS OF APPEAL ARE ALLOWED. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE C ONTENDED THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPECT OF UNPAID SERVICE TAX AND I.T.A NO. 1299 /AHD/20 14 A.Y. 2007 - 08 PAGE NO DCIT VS. M/S. BHAGWATI BANQUETS & HOTELS LTD. 4 IT HAS CLAIMED EXCESS BROUGHT FORWARD LOSS/DEPRECIATION AS AGAINST THE CORRECT UNABSORBED DEPRECIATION AS PER ASSESSMENT RECORD. HE HAS PLACED REL IANCE ON THE ORDER OF ASSESSING OFFICER. ON OTHER HAND, THE LEARNED COUNSEL HAS CONTENDED THAT ALL THE NECESSARY DETAILS WERE FURNISHED IN THE TAX AUDIT REPORT IN RESPECT OF PAYMENT OF SERVICE TAX AND THE DETAIL OF BROUGHT FORWARD LOSS WERE AVAILABLE IN THE ASSESSMENT RECORDS . HE FURTHER CONTENDED THAT PAYMENT OF SERVICE TAX WAS MADE AFTER DUE DATE OF FILING OF RETURN OF INCOME BUT BY INADVERTENT MISTAKE THE SAID AMOUNT WAS NOT ADDED BACK IN THE COMPUTATION OF INCOME. HE HAS FURTHER SUBMITTED THAT A SSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS O F INCOME. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS FURNISHED THE DETAILS SHOWING THAT PAYMENT OF THESE SERVICE TAX WAS MADE AFTER THE DUE DATE FOR FILING THE RETURN OF INCOME . WE OBSERVED THAT THE NECESSARY DETAILS WERE FURNISHED IN THE TAX AUDIT REPOR T BUT THE DATE OF PAYMENT WAS LEFT BLANK IN THE AUDIT REPORT; BY INADVERTENT MISTAKE AND THE ASSESSEE HAS CLAIMED DEDUCTION OF THE SAID AMOUNT IN THE SUCCEEDING ASSESSMENT YEAR 2008 - 09 IN THE REVISED RETURN FILED . REGARDING BROUGHT FORWARD UNABSORBED LOS SES/DEPRECIATION THE LD. COUNSEL HAS SUBMITTED THAT ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS AS BOTH THE RETURNED LOSSES AND THE ASSESSED LOSSES OF EARLIER YEARS WERE PART OF THE ASSESSMENT RECORD . AFTER CONSIDERING THE FACTS AS ABOVE AND THE FIND INGS OF THE LD.CIT(A) WE OBSERVED THAT THAT IT CANNOT BE SAID THAT ASSESSEE HA S FURNISHED INACCURATE PARTICULARS OR I.T.A NO. 1299 /AHD/20 14 A.Y. 2007 - 08 PAGE NO DCIT VS. M/S. BHAGWATI BANQUETS & HOTELS LTD. 5 CONCEALED INCOME , THEREFORE, WE DO NOT FIND ANY ERROR IN THE DECISION OF THE LD.CIT(A). A CCORDINGLY THE APPEAL OF THE REVENUE IS DISMISSED . 7. IN THE RESULT , THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 13 - 11 - 201 7 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DA TED 13 /11 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,