Shri Hitendrasinh M. Chauhan, V. The Income tax Officer, Ward-1, Vapi

ITA 1654/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6215 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-05-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 23-04-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Set aside
• Section: 271(1)(c); 143(3); 264

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGRAWAL, A.M.) I.T.A. NO. 1654/AHD./2007 ASSESSMENT YEAR : 2003-2004 SHRI HITENDRASINH M. CHAUHAN, UMBERGAON VS.- INCOM E TAX OFFICER, WARD-1, VAPI (PAN : ADHPC 1050 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJESH UPADHY AY RESPONDENT BY : SHRI SANJEEV KASHYAP , SR. D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 25.01.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), VALSAD CONFIRM ING THE PENALTY OF RS.2,20,389/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2003-04. 2. AT THE OUTSET, SHRI RAJESH UPADHYAY APPEARING ON BEHALF OF THE ASSESSEE FILED THE COPY OF ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX, VALSAD UNDER SECTION 264 DATED 30.01.2008 IN THE CASE OF ASSESSEE FOR THE ASSESSME NT YEAR 2003-04 SETTING ASIDE THE ASSESSMENT ORDER UNDER SECTION 264 OF THE INCOME TAX ACT TO TH E FILE OF ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE OWNERSHIP OF LAND, I.E. WHETHER IN T HE HANDS OF ASSESSEE AS INDIVIDUAL OR KARTHA OF HUF AND ACCORDINGLY DECIDE THE TAXABILITY OF INCOME . IN THIS ORDER, THE LD. CIT, VALSAD ALSO STATED THAT THE A.O. MUST EXAMINE THE PROBABLE YIEL D FROM THE LAND HOLDING IN QUESTION. THE ASSESSEE MUST BE ALLOWED AN OPPORTUNITY TO ADDUCE E VIDENCE IN SUPPORT OF CLAIM FOR CULTIVATION OF ALL THE CROPS. THE ACTIVITY OF HIRING TRACTOR, E TC. IF TREATED AS AGRICULTURAL ACTIVITY, THE INCOME HAS TO BE TREATED AS AGRICULTURAL INCOME. IN CASE, THE INCOME IS TAXED AS INCOME FROM OTHER SOURCE OR BUSINESS, THE CLAIM OF DEPRECIATION FOR THE ASSE SSEE DESERVES TO BE ALLOWED. ON THIS BASIS, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT SINCE NO W ASSESSING OFFICER HAS TO REFRAME THE ASSESSMENT, THE ORDER OF LD. CIT(A) CONFIRMING THE LEVY OF PENALTY UNDER SECTION BE ALSO SET ASIDE 2 ITA NO. 1654/AHD/200 7 WITH THE RIDING THAT ASSESSING OFFICER IS AT LIBERT Y TO RE-INITIATE THE PENALTY IN FRESH ASSESSMENT ORDER, WHICH HE IS BOUND TO PASS AS PER ORDER OF LD . CIT, VALSAD UNDER SECTION 264 OF THE INCOME TAX ACT, 1961 DATED 30.01.2008. 3. ON THE OTHER HAND, ON BEHALF OF REVENUE SHRI SAN JEEV KASHYAP APPEARED AND COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE LD . COUNSEL OF THE ASSESSEE. 4. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND PERUSED THE MATERIAL PLACED BEFORE US. IT IS PERTINENT TO NOTE THAT THE LD. CIT, VALSAD VIDE ORDER DATED 30.01.2008 UNDER SECTION 264 SET A SIDE THE ASSESSMENT FRAMED UNDER SECTION 143(3) ON 29.03.2006. THE PENALTY UNDER SECTION 271 (1)(C) WAS INITIATED IN THAT ASSESSMENT ORDER. SINCE THE ASSESSMENT ORDER UNDER SECTION 143(3) DAT ED 29.03.2006 IS SET ASIDE TO THE FILE OF ASSESSING OFFICER, IN OUR OPINION, PENALTY UNDER SE CTION 271(1)(C) WILL NOT SURVIVE. WE, THEREFORE, CANCEL THE PENALTY OF RS.2,20,389/- LEVI ED BY THE ASSESSING OFFICER WITH THE OBSERVATION THAT ASSESSING OFFICER IS AT LIBERTY TO RE-INITIATE THE PENALTY PROCEEDINGS IF REQUIRES IN FRESH ASSESSMENT, WHICH HE IS REQUIRED TO MAKE IN P URSUANCE OF DIRECTION DATED 30.01.2008 OF LD. CIT, VALSAD UNDER SECTION 264. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 21.05.2010 . SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21 / 05 /2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.