Poysha Goyal, Ghaziabad V. ACIT, Ghaziabad

ITA 1721/DEL/2013

• Counselvise Citation: 172120114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 06-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Assessee Lawyers: R S SINGHAVI
• Keywords: Depreciation; Salary income; Wrong claim; Revised return
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER & SHRI J.S. REDDY, ACCOUNTANT MEMBER ITA NO. 1721/DEL/2013 ASSESSMENT YEAR: 2007-08 POYSHA GOYAL, VS. ACIT, 8/7, SIRE-IV, INDL. AREA, CIRCLE-2, CGO COMPLEX -II, SAHIBABAD, GHAZIABAD. GHAZIABAD. AEWPG4566P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. R.S. SINGHAVI, CA RESPONDENT BY : SHRI MANOJ KUMAR CHOPRA, SR. DR ORDER PER DIVA SINGH, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 08/11/2012 OF CIT(A)-MUZAFFARNAGAR PERTAINING TO 20 07-08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO OF IMPOSING PENALTY OF RS. 284500/- U/S 271(1)(C) OF INCOME TAX ACT, 19 61. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE PENALTY OF RS. 284500/- LEVIED BY THE AO AND CONFIR MED BY CIT(A) IS NOT SUSTAINABLE AND IS LIABLE TO BE CANCELLED/DELET ED. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE DECLARED AN INCOME OF RS. 3,98,400/- FROM SALARY AND BUSINESS L OSS OF CURRENT YEAR AMOUNTING TO RS. 3,00,64,271/- TO BE CARRIED FORWA RD. THE CASE WAS ITA NO. 1721/D/2013 POYSHA GOYAL 2 SELECTED FOR SCRUTINY AFTER ISSUANCE OF NOTICE U/S 143(2) ALONG WITH NOTICE 142(1) AND QUESTIONNAIRE ETC. AS A RESULT OF WHICH AN ADDITION OF RS. 4,60,160/- WAS MADE BY THE AO . THE RELEVANT FACTS WHICH LED TO THE ADDITION BEING MADE ARE EXTRACTED FROM THE ASSESSME NT ORDER HEREUNDER: 3. THE ASSESSEE IS IN GENERATION OF ELECTRICITY THRO UGH WIND MILLS. AS PER PURCHASE INVOICES IN THE NAME OF M/S OM WINDFARM, SHIV WINDFARM & M/S GOPAL WINDFARM DATED 20.05.2006 IN WHICH CASES THE ASSESSEE IS THE PROPRIETOR, HAVING PURCHA SED THESE SECOND HAND WIND MILLS INCLUDING COST OF LAND AMOUNTING TO RS. 4,83,00,000/-. ON THE MILLS SHE HAS CLAIMED DEPREC IATION, BUT DURING VERIFICATION IT WAS FOUND THAT SALE/PURCHASE DEEDS DO NOT PROVIDE THE SEPARATE COST OF LAND AND ACTUAL COST OF WIND MILLS . SO IT WAS FOUND THAT THE ASSESSEE WAS ALSO CLAIMED DEPRECIATION ON LAND, WHICH IS NOT ALLOWABLE. THE ASSESSEE WAS ASKED TO FURNISH THE A CTUAL COST OF LAND AND ACTUAL COST OF WIND MILLS SEPARATELY. IN REPLY THE AR HAS SUBMITTED THE SEPARATE COST OF LAND AND WIND MILLS. ACCORDINGLY, SHE ACCEPTED THE EXCESS DEPRECIATION CLAIM OF RS. 4,60, 160/- AND FILED A REVISED COMPUTATION. AFTER NECESSARY VERIFICATION AND ABOVE SUBMISSION AN AMOUNT OF RS. 4,60,160/- IS BEING ADD ED TO THE INCOME OF THE ASSESSEE. PENALTY U/S 271(1)(C) IS ALSO BEI NG INITIATED IN THIS ISSUE. ADDITION RS. 4,60,160/- 3. AS A RESULT OF THIS PENALTY PROCEEDINGS WERE INI TIATED. THE EXPLANATION OF THE ASSESSEE THAT IT WAS A WRONG CLA IM AND NOT A FALSE CLAIM AS THE ACCOUNTANTS HAD PREPARED THE RETURN TA KING THE FIGURES AS APPEARING IN THE SALE DEED WHICH EVIDENTLY DID NOT PROVIDE THE SEPARATE COST OF LAND AND SEPARATE COST OF WINDMILLS WAS A B ONAFIDE ERROR AND ACCORDINGLY, THE CLAIM WAS NOT FALSE WAS NOT ACCEPT ED BY THE AO. SIMILARLY, THE ARGUMENT THAT ALL FACTS WERE DULY DI SCLOSED IN THE RETURN OF INCOME AND THERE WAS NO CASE OF FURNISHING OF I NACCURATE PARTICULARS ITA NO. 1721/D/2013 POYSHA GOYAL 3 WAS ALSO NOT ACCEPTED. THE AO IN THE PENALTY PROCE EDINGS HELD THAT THE ASSESSEE HAD DELIBERATELY AND WRONGLY CLAIMED DEPRE CIATION ON THE AMOUNT OF RS. 4,60,160/- AS A RESULT OF WHICH PENAL TY U/S 271(1)(C) WAS IMPOSED. 4. IN APPEAL BEFORE THE CIT(A) THE SAID ACTION WAS CONFIRMED. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. AR INVITING ATTENTION TO THE SPECIFIC FI NDING OF THE AO IN THE ASSESSMENT PROCEEDINGS CONTENDED THAT THE CLAIM OF DEPRECIATION WAS BASED ON SALE DEEDS WHICH ADMITTEDLY DID NOT PROVID E SEPARATE COST OF LAND AND SEPARATE COST OF WIND MILLS. THIS IT WAS SUBMITTED IS AN ADMITTED FACT. ACCORDINGLY, IT WAS HIS SUBMISSION THAT THE P RESENT CASE CANNOT BE SAID TO BE WHERE ANY INACCURATE PARTICULARS HAVE BE EN FILED OR FOR THAT MATTER A FALSE CLAIM HAS BEEN MADE AS ADMITTEDLY T HE ACCOUNTANTS HAVE GONE BY THE FIGURE GIVEN IN THE SALE DEED. IT WAS HIS SUBMISSION THAT A PERUSAL OF THE ASSESSMENT ORDER WOULD SHOW THAT THE ASSESSMENT WAS CONCLUDED ALLOWING THE BUSINESS LOSS OF RS.2,96,04, 111/-. FOR READY- REFERENCE, WE REPRODUCE FROM THE ASSESSMENT ORDER:- AFTER DISCUSSION INCOME OF THE ASSESSEE IS COMPUTED AS UNDER: INCOME FROM BUSINESS/PROFESSION (LOSS) RS. 3,01,1 8,683/- INCOME FROM OTHER SOURCES RS. 54,412/- ADDITION AS PER PARA 3 RS. 4,60,160 /- BUSINESS LOSS FOR CURRENT YEAR TO BE RS. 2,96,04,1 11/- CARRIED FORWARD ITA NO. 1721/D/2013 POYSHA GOYAL 4 INCOME FROM SALARY RS. 3,98,400/- AFTER DISCUSSION ASSESSMENT IS COMPLETED ON AN INC OME OF RS. 3,98,400/- FROM SALARY AND BUSINESS LOSS OF CURRENT YEAR TO BE CARRIED FORWARD OF RS. 2,96,04,111/-. ISSUE NOTICE OF DEMA ND, CHALLAN ETC. AFTER ALLOWING CREDIT OF PREPAID TAXES. CHARGE INT EREST U/S 234 ACCORDINGLY. PENALTY U/S 271(1)(C) IS ALSO BEING I NITIATED IN THIS CASE. 5.1. THUS, ON ACCOUNT OF THE ABOVE MENTIONED FACTUA L FINDING IT WAS CONTENDED THAT IT CANNOT BE SAID THAT THE ASSESSEE HAD ANY MOTIVE TO MAKE A FALSE CLAIM. THE FACT THAT THIS WAS THE FIG URE APPEARING IN THE SALE DEED IT WAS RE-ITERATED IS AN ADMITTED FACT BEFORE THE AO. IN THE PENALTY PROCEEDINGS IT WAS CONTENDED IT HAS BEEN ARGUED THA T MERELY BECAUSE A WRONG CLAIM IS MADE BASED ON THE SALE DEED WHERE AD MITTEDLY BIFURCATION FOR COST OF LAND AND WIND MILLS WAS NOT PROVIDED IT CANNOT BE SAID THAT THE ASSESSEE MADE A FALSE CLAIM. THIS EXPLANATION IT W AS CONTENDED BASED ON THE JUDICIAL PRECEDENT AS CONSIDERED BY THE APEX COURT IN RELIANCE PETRO PRODUCTS AND PWC HAS WRONGLY BEEN REJECTED. RELIANCE WAS ALSO PLACED ON THE ORDER DATED 26 TH OCTOBER, 2012 OF THE COORDINATE BENCH IN ITA NO. 463/DEL/2011 IN THE CASE OF VASU DEV PAHWA VS. ACIT, WHEREIN MORE OR LESS CONSIDERING IDENTICAL FACTS RELYING ON CIT VS. BARCARDI MARTINI INDIA LIMITED, 288 ITR 585 AND CIT VS. RELIANCE PET RO PRODUCTS PVT. LIMITED (2010) 322 ITR 158 (SC). REFERRING TO THES E IT WAS SUBMITTED THAT THE PENALTY ORDER WAS QUASHED HOLDING THAT ALL NEC ESSARY FACTS WERE DISCLOSED BY THE ASSESSEE AS SUCH IT COULD NOT BE S AID THAT THE ASSESSEE ITA NO. 1721/D/2013 POYSHA GOYAL 5 HAS EITHER CONCEALED ANY INCOME OR FURNISHED INACCU RATE PARTICULARS. IT WAS ARGUED THAT A WRONG CLAIM CANNOT BE TREATED AS A FALSE CASE IN THE FACTS OF THE PRESENT CASE. 6. LD. SR. DR PLACED HEAVY RELIANCE UPON THE ORDERS OF THE AUTHORITIES BELOW. RELIANCE WAS ALSO PLACED UPON C IT VS. ZOOM COMMUNICATION PVT. LIMITED, (2010) TIOL-361-HC-DEL- IT IT WAS HIS SUBMISSION THAT THE ORDER DESERVE TO BE UPHELD AS H AD THE CASE NOT BEEN SELECTED FOR SCRUTINY THE DEPRECIATION CLAIMED WOUL D HAVE BEEN ALLOWED. 6.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION THEREOF, W E FIND THAT ON FACTS THE ADDITION BY WAY OF DISALLOWING THE DEPRECIATION CLA IMED ON FACTS IS CONCERNED, THE SAME HAS RIGHTLY BEEN MADE IN THE QU ANTUM PROCEEDINGS WHICH FACT HAS BEEN ACCEPTED BY THE ASSESSEE BY FIL ING A REVISED RETURN AND NOT AGITATING THE ISSUE FURTHER. CONSIDERING T HE EXPLANATION OFFERED BY THE ASSESSEE IN THE PENALTY PROCEEDINGS, IT IS S EEN THAT REPEATEDLY IT IS CLAIMED THAT THE RETURN WAS FINALIZED ON THE BASIS OF FIGURES APPEARING IN THE SALE DEED. THIS FACT HAS NOT BEEN DISPUTED BY THE DEPARTMENT AND IS FOUND TO BE SUPPORTED FROM THE ASSESSMENT ORDER ITS ELF. IN THE AFORE- MENTIONED PECULIAR FACTS AND CIRCUMSTANCES, CONSIDE RING THE FACT THAT EVEN AFTER THE SAID ADDITION THE ASSESSEE WAS ALLOW ED BUSINESS LOSS TO BE CARRIED FORWARD TO THE EXTENT OF RS.2.96 CRORE ODD, WE HAVE NO HESITATION IN FOLLOWING THE JUDICIAL PRECEDENT RELIED UPON TO HOLD THAT THE EXPLANATION ITA NO. 1721/D/2013 POYSHA GOYAL 6 OFFERED IS BONAFIDE AND DESERVES TO BE ALLOWED. IT IS SEEN THAT AT BEST THE CLAIM OF THE ASSESSEE CAN BE CALLED A WRONG CLAIM A ND BY NO STRETCH OF IMAGINATION ON THE FACTS AS THEY STAND CAN IT BE CA LLED A FALSE CLAIM. WE HAVE TAKEN INTO CONSIDERATION THE ORDER OF THE COOR DINATE BENCH RELIED UPON IN THE CASE OF VASUDEV PAHWA VS. ACIT (CITES S UPRA) AND THE PRINCIPLE LAID DOWN BY THE APEX COURT IN THE CASE O F CIT VS. RELIANCE PETRO PRODUCTS LIMITED (2010) 322 ITR 158 (SC) WHIC H WAS SUBSEQUENTLY FOLLOWED BY THE APEX COURT IN THE CASE OF PRICE WAT ER HOUSE COOPERS PVT. LTD. VS. CIT (2012) 25 TAXMANN.COM 400 (SC). 7. IN VIEW OF THE ABOVE, WE HOLD THAT THE PENALTY O RDER DESERVES TO BE QUASHED. THE GROUND RAISED BY THE ASSESSEE ACCORDI NGLY IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05 TH SEPTEMBER 2014. SD/- SD/- (J.S. REDDY) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05.09.2014 *KAVITA/AMIT KUMAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR