DCIT, Coimbatore V. C.R.I.Pumps Pvt. Ltd., Coimbatore

ITA 1399/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95830 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2015
• Court: TRIBUNAL
• Department Lawyers: MRS JAYANTHI KRISHNAN
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Depreciation; Additional depreciation; Question of law
• Section: 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! , ' #$ BEFORE SHRI N.R.S.GANESAN, JUDICIAL MMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ ITA NO. 1399/MDS/2015 / ASSESSMENT YEAR : 2010-11 THE DEPUTY COMMISSIONER OF INCOME-TAX, CORPORATE CIRCLE-2, 63-A, RACE COURSE ROAD, COIMBATORE 18. APPELLANT) V. M/S. CRI PUMPS PVT. LTD., 7/46-1, KEERANTHAM ROAD, SARAVANAMPATTI, COIMBATORE 641 035. PAN AAACC9497N RESPONDENT) / APPELLANT BY : MRS. JAYANTHI KRISHNAN, CIT / RESPONDENT BY : DR. ANITA SUMANTH, ADVOCATE ! / DATE OF HEARING : 03.08.2015 '# ! / DATE OF PRONOUNCEMENT: 12.08.2015 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 9. 3.2015. - - ITA1399 /1 4 2 2. THE GRIEVANCE IN THIS APPEAL IS WITH REGARD TO D ELETION OF PENALTY LEVIED BY THE ASSESSING OFFICER U/S.271(1)( C) OF THE I.T. ACT, 1961. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURE AND SALE OF PUMPS AND MOTOR S WITH THE BRAND NAME C R I. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSING OFFICER DISALLOWED THE CL AIM OF ADDITION DEPRECIATION ON MACHINERY ACQUIRED AND INS TALLED DURING THE PERIOD 2002-2003 TO 2008-09. THE ASSESSEE OBJ ECTED TO THE DISALLOWANCE RELYING ON THE STATUTORY PROVISIONS IN TERMS OF SEC.32(1)(IIA) OF THE ACT. THE LD. AR OF THE ASSES SEE SUBMITTED BEFORE THE CIT(APPEALS) THAT THE PROVISIONS OF CLAU SE (IIA) OF SUB- SEC.(1) OF SEC.32 WAS REINTRODUCED BY THE FINANCE A CT, 2002 W.E.F. 01.04.2003 AND WAS AMENDED BY THE FINANCE (N O.2) ACT, 2004 WITH EFFECT FROM 1 ST APRIL, 2005. THE LD. AR FURTHER SUBMITTED THAT THE CLAIM OF CARRY FORWARD ADDITIONA L DEPRECIATION WAS NOT ALLOWED BY THE CIT(APPEALS) AND ALSO BY THE TRIBUNAL. HOWEVER, IT WAS STATED THAT THE ASSESSEE HAS PREFER RED AN APPEAL BEFORE THE HIGH COURT OF MADRAS CHALLENGING THE DECISION OF THE TRIBUNAL, RAISING SUBSTANTIAL QUESTION O F LAW ON WHETHER - - ITA1399 /1 4 3 ADDITIONAL DEPRECIATION IS ALLOWABLE TO THE ASSESSE E AS CLAIMED. THE ASSESSING OFFICER IN THE PENALTY ORDER HAS DISC USSED ABOUT THE CLAIM OF ADDITIONAL DEPRECIATION U/S.32(1)(IIA) BY THE ASSESSEE AND HELD THAT SINCE THE SAME ISSUE OF DISALLOWANCE OF CLAIM OF ADDITIONAL DEPRECIATION HAS BEEN CONFIRMED BY THE T RIBUNAL, IN REVENUES FAVOUR, WHICH IS THE LAST FACT FINDING AU THORITY. FOR THE CURRENT YEAR ALSO THE PENALTY U/S.271(1)(C) IS LEVI ED SETTING ASIDE THE LD. AR OF THE ASSESSEES OBJECTIONS. THE ASSES SING OFFICER IN THE ORDER HAS NOT ESTABLISHED ABOUT FURNISHING O F INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME BY T HE ASSESSEE. THEREFORE, THE CIT(APPEALS) HELD THAT CLAIM MADE BY THE ASSESSEE FOR ADDITIONAL DEPRECIATION UNDER THE PROV ISIONS OF SEC.32(1)(IIA) WHICH WAS DISALLOWED BY THE ASSESSIN G OFFICER CANNOT BE CONSTRUED AS FURNISHING OF INACCURATE PAR TICULARS OF INCOME. THE ASSESSING OFFICER CANNOT LEVY PENALTY ON THE ISSUE INVOKING SUBSTANTIAL QUESTION OF LAW, AND ADMITTED BY THE HIGH COURT. ACCORDINGLY, CIT(APPEALS) DELETED THE PENAL TY LEVIED IN THE EARLIER YEARS ALSO. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. - - ITA1399 /1 4 4 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, SIMILAR ISSUE WAS CONSIDERED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSE E FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 IN ITA NOS.271 1 AND 2712/MDS/14 VIDE ORDER DATED 5.3.2015, WHEREIN IT WAS HELD AS UNDER: 8. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE ASSESSEE HAS CLAIMED ADDITIONAL DEPRECIATION OF ` 1,98,26,411/- ON THE ASSETS ACQUIRED DURING THE PERIOD FROM 2002-03 TO 2005-06. THE ASSESSING OFFICER HAS DENIED THE ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE BY OBSERVING THAT THE ASSESSEE IS NOT ELIGIBLE FOR ADDITIONAL DEPRECIATION IN SUBSEQUENT YEARS. THE PLANT AND MACHINERY LOST ITS CHARACTER OF NEW PLANT AND MACHINERY. THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION ONLY TO THE NEW PLANT AND MACHINERY ACQUIRED AND INSTALLED DURING A GIVEN YEAR AND CANN OT BE EXTENDED TO SUBSEQUENT YEARS. THEREFORE, THE CLA IM MADE BY THE ASSESSEE IN SUBSEQUENT YEAR WILL NOT QUALIFY FOR ADDITIONAL DEPRECIATION AND THE ASSESSI NG OFFICER HAS DENIED THE CLAIM OF THE ASSESSEE. AFTER CAREFUL CONSIDERATION OF THE PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT, THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION FOR THE PLANT AND MACHINERY INSTALLED IN THE YEAR UNDER CONSIDERATION. THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE WAS NOT ABLE TO INSTALL THE PLANT AND MACHINERY AS PER STATUTE AND WHEN IT IS NOT ABLE TO CLAIM THE ENTIRE ADDITIONAL DEPRECIATION, THE LEFT OVER PORTION CAN BE CLAIMED IN - - ITA1399 /1 4 5 SUBSEQUENT YEAR BEING THE PROVISIONS OF SECTION 32 OF THE ACT IS A BENEFICIAL PROVISION. UNDER THESE FACT S AND CIRCUMSTANCES OF THE CASE, BY CONSIDERING THE PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT, WE ARE OF THE OPINION THAT THE ASSESSEE HAS MADE A BONAFIDE CLAIM BY DISCLOSING ALL MATERIAL DETAILS BEFORE THE ASSES SING OFFICER AND THEREFORE, THE CLAIM OF THE ASSESSEE I S NEITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THEREFORE, IT IS NOT A FIT CASE TO LEVY PENALTY UNDER SECTION271(1)(C) OF THE ACT. 9. THE HONBLE SUPREME COURT IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS PVT. LTD. [2010] 322 ITR 158 HAS HELD THAT WHERE THERE IS NO FINDING THAT ANY D ETAILS SUPPLIED BY THE ASSESSEE IN THE RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE IS NO QUESTI ON OF INVITING PENALTY UNDER SECTION 271(1)(C) ACT. A MER E MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS. RESPECTFULLY BY FOLLOWING THE ABOVE DECISION OF THE HONBLE SUPREME COURT, WE FIND THAT IT IS NOT A FIT CASE TO LEVY PE NALTY UNDER SECTION 271(1)(C) OF THE ACT AND ACCORDINGLY, THE PENALTY LEVIED BY THE ASSESSING OFFICER STANDS DELETED. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL, WE ARE INCLINED TO CONFIRM THE ORDER OF THE CIT(APPEAL S) AND REJECT THE GROUND OF APPEAL, AS THE FACTS ARE SIMIL AR IN THE IMPUGNED ASSESSMENT YEAR ALSO. - - ITA1399 /1 4 6 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 12 TH OF AUGUST, 2015 AT CHENNAI. SD/- SD/- ( $ . . $ . %& ) ( ' ( ) * ) N.R.S.GANESAN + ,-./01.2334.15+ 6 78 /JUDICIAL MEMBER ! 789::3;/<./<=>?@>1 '6 /CHENNAI, A7 /DATED, THE 12 TH AUGUST, 2015. MPO* 7& BCDC /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. E+ /CIT(A) 4. E /CIT 5. CF% G /DR 6. %HI /GF.