ITO, Nashik V. M/s Kirti Solvex Ltd, Latur

ITA 1407/PUN/2013

• Counselvise Citation: 140724514 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-11-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 03-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAZHAR AKRAM
• Keywords: Depreciation; Wrong claim; Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1407/PN/2013 (ASSESSMENT YEAR: 2005-06) THE INCOME TAX OFFICER, CENTRAL 1, NASHIK . APPELLANT VS. KIRTI SOLVEX LTD., 79-CIT(A), MARKET YARD, LATUR. PAN: AAACK7419E . RESPONDENT APPELLANT BY : SHRI MAZHAR AKRAM RESPONDENT BY : SHRI NIKHIL PATHAK DATE OF HEARING : 03-11-2014 DATE OF PRONOUNCEMENT : 26-11-2014 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF C IT(A)-I, NASHIK DATED 08.04.2013 RELATING TO ASSESSMENT YEAR 2005 -06 AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS.8,02,5 01/- IMPOSED U/S 271(1)(C) OF THE INCOME-TAX ACT, BY THE ASSESSING OFFICER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAD FILED REVISED COMPUTATION OF INCOME AND WITHDRAWN THE CLAIM FOR DEPRECIATION, ONLY WHEN THE SAME WAS BROUGHT TO THE NOTICE OF THE ASSESSEE BY THE ASSESSING OFFICER, AS NOTED IN T HE ORDER SHEET. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE EVIDENCE ON RECORD, RENDERING THE DECISION, PERVERSE ON FACTS AND IN LAW. ITA NO.1407/PN/2013 KIRTI SOLVEX LTD. 2 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY, DELETE , AND AMEND ANY OF THE GROUNDS, AS PER THE CIRCUMSTANCES OF THE C ASE. 5. THE APPELLANT PRAYS LEAVE TO ADDUCE SUCH FURTHER EVID ENCE TO SUBSTANTIATE ITS CASE, AS THE OCCASION MAY DEMAND. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE WA S ENGAGED IN SOLVENT EXTRACTION, OIL MILLING, REFINING OF OIL AND WAS ALSO DOING T HE TRADING OF OIL, OIL SEEDS, CAKE, ETC. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSE E HAD MADE A MISTAKE IN RESPECT OF THE CLAIM OF THE DEPRECIATION BY ADOP TING WRONG OPENING WDV OF THE ASSESSEE AS ON 01.04.2004. THE ASSES SEE IN THE DEPRECIATION CHART FILED ALONG WITH RETURN OF INCOME, HAD SHO WN TOTAL WDV AS ON 01.04.2004 AT RS.5,58,58,448/- IN RESPECT OF BLOCK A TO BLOCK C ASSETS AS AGAINST CLOSING WDV OF RS.4,67,14,109/- A S ON 31.03.2004. IN REPLY, THE ASSESSEE EXPLAINED THAT THE DE PRECIATION CHART FOR THE FIXED ASSETS WAS WRONGLY SUBMITTED ALONG WITH RETURN OF INCOME AND THE DEPRECIATION AMOUNTING TO RS.1,35,69,239/- HAD BEEN WRONGLY CLAIMED IN THE RETURN OF INCOME AS AGAINST THE CO RRECT CLAIM OF DEPRECIATION OF RS.1,13,96,011/-. THE PLEA OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT THE EXCESS DEPRECIATION OF RS.2 1,73,228/- WAS CLAIMED BY A TYPOGRAPHICAL MISTAKE WHILE COPYING / PAST ING THE DEPRECIATION STATEMENT. THE ASSESSING OFFICER DISALLOWED THE EXCESS CLAIM OF DEPRECIATION OF RS.21,73,228/- AND HELD THE ASSESSE E TO HAVE FURNISHED IN-ACCURATE PARTICULARS OF INCOME AND PENALTY PRO CEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED. THEREAFTER , PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED HOLDING THE AS SESSEE TO BE ITA NO.1407/PN/2013 KIRTI SOLVEX LTD. 3 IN DEFAULT AND PENALTY OF RS.8,02,501/- WAS LEVIED UNDER SEC TION 271(1)(C) OF THE ACT. THE CIT(A) DELETED PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 5. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLAC ED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 6. IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRES ENTATIVE FOR THE ASSESSEE THAT IN THE ORIGINAL DEPRECIATION CHART FILED A LONG WITH RETURN OF INCOME, THE OPENING WDV OF THE PRECEDING YEAR W AS ADOPTED BY WAY OF MISTAKE IN CUT AND PASTING OF FIGURES. HOWEVER , DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTE D THE REVISED CLAIM OF DEPRECIATION BY ADOPTING THE CLOSING WDV OF THE PRE CEDING YEAR AND FILED REVISED DEPRECIATION. THE MISTAKE IN CLAIM O F THE DEPRECIATION CANNOT BE SAID TO BE FURNISHING OF IN-ACCURATE PARTICULARS OF INCOME BY THE ASSESSEE AS THE MISTAKE COMMITTED BY T HE AUDITOR, WAS A BONAFIDE MISTAKE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT CASE IS IN RELATION TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. PENALTY FOR CONCEALMENT OF INCOME UNDER SECTION 271(1)(C) OF THE ACT IS LEVIABLE WHERE THE ASSE SSEE EITHER CONCEALS ITS INCOME OR FURNISHES IN-ACCURATE PARTICULARS OF INCOME. IF EITHER OF TWO CONDITIONS ARE SATISFIED THEN, THE ASSESSEE IS EXIGIBLE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HOWEVER , WHERE THE ASSESSEE HAD BONAFIDELY MADE A CLAIM WHICH WAS HELD TO BE INCORRECT BECAUSE OF SOME MISTAKE OR AN ERROR COMMITTED ON THE PART OF PERSON ITA NO.1407/PN/2013 KIRTI SOLVEX LTD. 4 MAKING THE CLAIM, IT CANNOT BE SAID THAT THE ASSESSEE HAD FURNISHED IN-ACCURATE PARTICULARS OF INCOME. 8. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE ALONG WITH THE RETURN OF INCOME, HAD FURNISHED A DEPRECIATION CHART WHICH IS PLACED AT PAGE 29 OF PAPER BOOK, UNDER WHICH, IT HAD CLAIMED DEPR ECIATION FOR THE YEAR AT RS.1,35,69,239/- ON ACCOUNT OF ASSETS IN BLOC KS A, B AND C. THE ASSESSEE IN THE PRECEDING YEAR HAD MADE A SIMILAR CLAIM OF DEPRECIATION ON ASSETS AND THE COPY OF THE SAID DEPRECIA TION CHART FOR THE YEAR ENDING 31.03.2004 IS PLACED AT PAGE 52 OF THE PA PER BOOK. IN THE SAID DEPRECIATION CHART, THE OPENING WDV OF BUILDING WAS RS.73,92,119/- AND THE CLOSING WDV RS.66,52,907/-. FURTHE R, THE OPENING WDV OF VEHICLE AT RS.1,97,533/- AND CLOSING WDV WAS RS.1,58,026/-. THE OPENING WDV OF PLANT & MACHINERY WAS RS.4,82,68,796/- AND CLOSING WDV AT RS.3,99,03,176/-. THE P ERUSAL OF THE DEPRECIATION CHART AS ON 31.03.2005 REFLECTS THAT WHILE PREPARING THE SAID CHART, THE AUDITOR HAD PICKED UP THE OPENING WDV OF THE DEPRECIATION CHART AS ON 31.03.2004 TO COMPUTE TH E DEPRECIATION FOR ASSESSMENT YEAR 2005-06 AS AGAINST PICK ING UP THE CLOSING WDV AS ON 31.03.2004. THE ASSESSEE WHEN CONFRONT ED DURING THE COURSE OF ASSESSMENT PROCEEDINGS REVISED ITS CLAIM OF DEPRECIATION BY SUBMITTING A REVISED DEPRECIATION CHART AS ON 31.03.20 05, WHICH IS PLACED AT PAGE 30 OF THE PAPER BOOK, UNDER WHICH, THE CLA IM OF DEPRECIATION WAS REVISED TO RS.1,13,96,011/-. THE PERUSAL OF THE SAID CHART REFLECTS THAT A MISTAKE HAD BEEN COMMITTED BY THE ASSESSEE / AUDITOR WHILE CLAIMING THE DEPRECIATION FOR THE ASSESSMENT YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 2005-06 AS TO THE OPENING WD V FOR THE YEAR WAS TAKEN AT OPENING WDV OF THE PRECEDING YEAR I NSTEAD OF CLOSING WDV OF THE PRECEDING YEAR. THE ERROR IS CLAIMED TO HAVE BEEN ITA NO.1407/PN/2013 KIRTI SOLVEX LTD. 5 COMMITTED BECAUSE OF THE COPYING / PASTING OF THE FIGURES OF THE WDV OF THE ASSETS WHILE COMPUTING THE DEPRECIATION CHART. THE SAID MISTAKE IS A BONAFIDE ERROR COMMITTED BY THE ASSESSEE A ND IT DOES NOT TANTAMOUNT TO FURNISHING OF IN-ACCURATE PARTICULARS OF INCOM E. THE WRONG CLAIM OF DEPRECIATION RESULTING IN ADDITION OF RS.21,73,22 8/- DOES NOT MAKE THE ASSESSEE LIABLE TO LEVY OF PENALTY UNDE R SECTION 271(1)(C) OF THE ACT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED OF RS.8,02,501/- UNDER SECTION 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE REVENUE A RE THUS, DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF NOVEMBER, 2014. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 26 TH NOVEMBER, 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE