The ITO, Ward-9(4)., Ahmedabad V. Shri Kaushik S.Jain, Ahmedabad

ITA 1365/AHD/2011

• Counselvise Citation: 136520514 RSA 2011
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 10-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TALATI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.1365 / AHD/2011 (ASSESSMENT YEAR 2007-08) ITO, WARD 9(4), AHMEDABAD VS. SHRI KAUSHIK S. JAIN, PROP. OF M/S. SHREE AADINATH BULK CARRIER, 1633, PARABADI NI POLE, HLIM NI KHADKI, SHAHPUR, AHMEDABAD. PAN/GIR NO. : ABBPJ6710G (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI K MADHUSUDAN, SR. DR RESPONDENT BY: SHRI S H TALATI, AR DATE OF HEARING: 04.11.2011 DATE OF PRONOUNCEMENT: 23.12.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDE R OF LD. CIT(A) XV, AHMEDABAD DATED 10.03.2011 FOR THE ASSESSMENT Y EAR 2007-08. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1). THE ID. COMMISSIONER OF INCOME-TAX (A)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENAL TY OF RS.7,38,871/- LEVIED U/S.271(1)(C) OF THE I.T, ACT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) -XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDE R OF THE ASSESSING OFFICER. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF T HE ID. COMMISSIONER OF INCOME-TAX(A)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. I.T.A.NO.1365 /AHD/2011 2 2. BRIEF FACTS OF THE CASE TILL THE STAGE OF IMPOSI TION OF THE PENALTY ARE NOTED BY LD. CIT(A) IN PARA 1 OF HIS ORDER WHICH IS REPRODUCED BELOW: 1. THE PRESENT APPEAL IS DIRECTED AGAINST THE PENA LTY ORDER PASSED U/S.271(1)(C) OF THE INCOME-TAX ACT, 1961 BY THE IN COME TAX OFFICER, WARD-9(4), AHMEDABAD FOR AY 2007-08 ON 18. 6.2010. THE PENALTY HAS BEEN IMPOSED ON THE AMOUNT OF EXCES S DEPRECIATION CLAIMED BY THE ASSESSEE. THROUGH THE P ENALTY ORDER IT IS NOT KNOWN THE AMOUNT OF EXCESS DEPRECIATION BUT PERUSAL OF THE ASSESSMENT ORDER PASSED U/S. 143(3). 10.12.2009 SHO WS THE AMOUNT OF EXCESS DEPRECIATION OF RS.22,61,766. THE REASON WAS THAT THE ASSESSEE USED THE BUSES LESS THAN 180 DAYS AND THE DEPRECIATION SHOULD HAVE BEEN RESTRICTED TO 15% AS AGAINST 20% C LAIMED BY THE ASSESSEE. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A) WHO HAS DELETED THE PENALTY AND NOW, THE REV ENUE IS IN APPEAL BEFORE US. 4. LD. D.R. SUPPORTED THE PENALTY ORDER AND RELIANC E WAS PLACED BY HIM ON THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF DHARMENDRA TEXTILES AS REPORTED IN 3096 ITR 277. A S AGAINST THIS, LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A).S 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. REGARDING THE RELIANCE PLACED BY THE LD. D.R. OF THE REVENUE ON THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF DHARMEND RA TEXTILES (SUPRA), WE FIND THAT THIS JUDGMENT WILL BE RELEVANT IF IT I S FOUND THAT THE PENALTY HAS BEEN DELETED BY LD. CIT(A) ON THIS BASIS THAT T HE A.O. COULD NOT POINT OUT MENS REA OF THE ASSESSEE. THE PENALTY HAS BEEN DELETED BY THE LD. CIT(A) ON THIS BASIS THAT THE EXCESS CLAIM OF DEPRE CIATION WAS ON ACCOUNT OF THE MISTAKE OF THE AUDITORS/CHARTERED ACCOUNTANT AND IN THIS REGARD, LD. CIT(A) HAS PLACED RELIANCE ON THE JUDGEMENT OF HON BLE APEX COURT I.T.A.NO.1365 /AHD/2011 3 RENDERED IN THE CASE OF T ASHOK PAI VS CIT AS REPOR TED IN 192 ITR 11 (S.C.). HENCE, IN OUR CONSIDERED OPINION, IN THE P RESENT CASE, THE JUDGMENT CITED BY THE LD. D.R. RENDERED IN THE CASE OF DHARMEDNRA TEXTILES (SUPRA) IS NOT RELEVANT. REGARDING THE ME RITS OF THE PENALTY, WE FIND THAT THE ASSESSEE HAS PURCHASED BUSSES AND THE SAME WERE PUT TO USE IN THE 2 ND HALF OF THE YEAR I.E. AFTER 30 TH SEP ON WHICH, THE ASSESSEE CLAIMED DEPRECIATION @ 20% WHEREAS ALLOWABLE RATE O F DEPRECIATION IS 15% BECAUSE ASSETS WERE PUT TO USE FOR LESS THAN 18 0 DAYS. IN THIS REGARD, IT WAS SUBMITTED BY THE ASSESSEE BEFORE LD. CIT(A) THAT UP TO ASSESSMENT YEAR 2005-06, THE RATE OF DEPRECIATION ON MOTOR BUS SES, MOTOR LORRIES AND MOTOR TAXIS USED IN THE BUSINESS OF RUNNING ON HIRE WAS ALLOWED @ 40% BUT FROM ASSESSMENT YEAR 2006-07, THE SAME WAS REVI SED AND REDUCED TO 30%. IT WAS SUBMITTED THAT THE TAX AUDITORS OF THE ASSESSEE M/S. VIMAL KANT JAIN & CO. WERE UNDER WRONG IMPRESSION OF OLD PROVISIONS AND CALCULATED THE DEPRECIATION ALLOWABLE AS PER OLD RA TES IN HIS TAX AUDIT REPORT AND THE ASSESSEE BEING IGNORANT OF THE COMPL ICATED PROVISIONS OF INCOME TAX ACT, FILED HIS RETURN OF INCOME CLAIMING DEPRECIATION GIVEN IN THE TAX AUDIT REPORT. WE FIND THAT IN THE PRESENT CASE, THE PENALTY WAS DELETED BY LD. CIT(A) ON THIS BASIS THAT THE EXCESS DEPRECIATION WAS CLAIMED BY THE ASSESSEE ON ACCOUNT OF THE MISTAKE O F THE CONCERNED C.A./AUDITORS AND IT HAS BEEN EXPLAINED BEFORE THE LD. CIT(A) AND ALSO BEFORE US THAT OLD RATES OF DEPRECIATION ALLOWABLE UP TO ASSESSMENT YEAR 2005-06 WAS 40% AND ON THIS BASIS, ALLOWABLE DEPREC IATION RATE FOR THE ASSETS PUT TO USE FOR LESS THAN 180 DAYS WAS CLAIME D @ 20% AS CLAIMED BY THE ASSESSEE BUT THE NEW RATE OF DEPRECIATION RELEV ANT FOR THE PRESENT ASSESSMENT YEAR WAS 30% BUT BY MISTAKE, THE CALCULA TION WAS MADE ON THE BASIS OF OLD RATES OF 40% INSTEAD OF NEW RATE O F 30%. THIS SUBMISSION OF THE LD. A.R. AND THE FINDING OF LD. CIT(A) COULD NOT BE CONTROVERTED I.T.A.NO.1365 /AHD/2011 4 BY THE LD. D.R. AND HENCE, WE FEEL THAT NO INTERFER ENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A) IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE BECAUSE ONCE IT IS ACCEPTED THAT EXCESS CLAIM IS DU E TO MISTAKE OF THE AUDITORS, THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CAS E OF T. ASHOK PAI (SUPRA) AND HENCE, WE DECLINE TO INTERFERE IN THE O RDER OF LD. CIT(A). 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (BHAVNESH SAINI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 14/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16/12.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.19/12 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 23/12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.23/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23/12/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..