DCIT, Chandigarh V. Sh. Mohinder Partap Singla, Chandigarh

ITA 164/CHANDI/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3757 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: SUMIT NAGPAL
• Keywords: Depreciation; Difference of opinion

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MAHARISHTI PRASHAT KUMAR, ACCOUNTANT MEMBER ITA NO. 164/CHD/2015 ASSESSMENT YEAR: 2008-09 THE DCIT, VS. SH. MOHINDER PARTAP SINGLA, CIRCLE-1(1), CHANDIGARH CHANDIGARH PAN NO. ABJPP5051A (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K. MITTAL RESPONDENT BY : SH. SUMIT NAGPAL DATE OF HEARING : 03.08.2016 DATE OF PRONOUNCEMENT : 03.08.2016 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFT ER REFERRED TO AS CIT(A)], CHANDIGARH DATED 24.11.2014. 2. THE REVENUE IS AGGRIEVED BY THE ACTION OF THE CI T(A) IN DELETING THE PENALTY OF RS. 31,00,000/- WHICH WAS LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 3. THE ASSESSING OFFICER HAS LEVIED PENALTY ON ACCO UNT OF TWO ISSUES, FIRSTLY ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENDITURE. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS A CIVIL CONTRACTOR A ND HAS DECLARED NET PROFIT @ 2 10% OF THE GROSS RECEIPTS ON PRESUMPTIVE BASIS. THE ASSESSEE, HOWEVER, CLAIMED INTEREST EXPENDITURE OF RS. 42,22,678/- OUT OF THE SAID DECLARED NET PROFIT ON PRESUMPTION BASIS. THE ASSESSING OFFICER OBSERVED THAT AS PER THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF GIRDHARI LAL VS. CIT AND ANOTHER, [2002] 256 ITR 318 (P&H), AFTER ALLOWI NG A FIXED NET PROFIT, THE CLAIM OF DEDUCTION OF INTEREST COULD NOT BE ALLOWED . THE SECOND DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS WITH REGARD TO TH E CLAIM OF DEPRECIATION AT A HIGHER RATE OF 40%. ACCORDING TO ASSESSING OFFICER , THE DEPRECIATION WAS ALLOWABLE @ 15% ONLY. 4. IN APPEAL, THE LD. CIT(A) DELETED THE PENALTY SO LEVIED BY THE ASSESSING OFFICER OBSERVING THAT SO FAR AS THE CLAIM OF INTER EST WAS CONCERNED, IT WAS A CASE OF DIFFERENCE OF OPINION. MOREOVER, THE INTERE ST WAS DISALLOWED IN THE LIGHT OF THE DECISION OF THE HON'BLE HIGH COURT AND, HENC E, THE ISSUE WAS DEBATABLE. IN RELATION TO THE CLAIM OF HIGHER DEPRECIATION ON ASSETS, THE LD. CIT(A) OBSERVED THAT ASSESSEE IN THE EARLIER ASSESSMENT Y EAR HAS CLAIMED THE DEPRECIATION @ 40% WHICH WAS ALLOWED BY THE ASSESSI NG OFFICER. DURING THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERA TION, THE ASSESSING OFFICER HELD THAT ASSESSEE WAS ENTITLED TO THE DEPRECIATION AT A LOWER RATE AND THE ASSESSEE ACCORDINGLY FURNISHED A REVISED DEPRECIATI ON CHART AND OFFERED THE DIFFERENCE OF AMOUNT FOR TAXATION. HE OBSERVED REGA RDING BOTH THE ISSUES THAT IT WAS NEITHER A CASE OF EITHER FURNISHING OF INACCURA TE PARTICULARS OF INCOME NOR OF CONCEALMENT OF INCOME. HE, THEREFORE, DELETED THE P ENALTY SO LEVIED BY THE ASSESSING OFFICER. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND GOIN G THROUGH THE RECORDS, WE FIND THAT LD. CIT(A) HAS RIGHTLY HELD THAT IT IS N OT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OF CONCEALMENT OF INCOME FOR THE PURPOSE OF 3 AVOIDANCE OR EVASION OF TAX. THE ASSESSEE IN THIS CASE HAS MADE BONAFIDE CLAIM. THE DISALLOWANCE ON THE ABOVE ISSUES WAS MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE OF OPINION AND NOT ON ACCO UNT OF DETECTION OF ANY CONCEALMENT INCOME. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND THE SAME IS UPHELD. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS HERE BY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.08.2016 SD/- SD/- (MAHARISHI PRASHANT KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 03 RD AUGUST, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR