BEGUD BEVERGES PRIVATE LIMITED, NEW DELHI V. ACIT, Circle-4(2), New Delhi

ITA 1798/DEL/2022

AI Insights

Begud Beverages Pvt. Ltd. appealed against the penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, for allegedly providing inaccurate particulars of income due to an incorrect claim of depreciation. The company, engaged in manufacturing and selling drinking water and soft drinks, had initially filed a return showing a loss for the Assessment Year 2014-15. Upon scrutiny, it revised its income computation, reducing the depreciation claimed. The Assessing Officer, however, imposed a penalty, which was upheld by the CIT (A). The Tribunal, referencing a similar case by the Delhi High Court, found that the error was inadvertent and not beneficial to the assessee, leading to the reversal of the penalty.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121475 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-09-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 07-08-2022
• Other Referred Cases: CIT v. Brahmaputra Consortium Ltd. (2012) 348 ITR 339 (Del)
• Laws Referred To: Income Tax Act, 1961, Companies Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY SAHO
• Section: 48; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1798/DEL/2022 Assessment Year 2015-16 Begud Beverages Pvt. Ltd., D-73 Basement Nangal Dawat Vasant Kunj, New Delhi. Vs. ACIT, Circle-4(2), New Delhi. TAN/PAN: AADCB8595K (Appellant) (Respondent) Appellant by: Shri Ajay Saho, CA Shri Harikishan, AR Respondent by: Shri Kanv Bali, Sr.DR Date of hearing: 20 09 2023 Date of pronouncement: 27 09 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c a p ti o n e d a p pe a l h as b e e n fi le d b y t he a ss es se e ag ai n s t t h e or d e r o f t h e C o m mi ssi on er o f I nc o m e T a x (A p pe al s) - N at i o n a l F ac e l es s A p pe a l Ce n tr e, D e l hi [ ‘ C IT (A ) ’ i n sh o r t ] dat e d 0 3 . 06. 2 0 20 0 ar isi ng f rom the penalt y or der dat ed 2 6 . 06. 2 01 8 p a s sed by t h e A sse s si n g O f fi c er ( A O ) un de r S e c ti o n 27 1 ( 1 )( c) o f the I n c o m e T a x A ct , 19 61 ( t he A ct ) c on c e r ni ng A Y 20 15 - 16 . 2. A s pe r t h e g ro un d s o f a p p ea l , t he a ss e ss e e h a s cha l l e n ge d t he i mp o si t i o n o f pe na l ty o n a c c ou n t o f a l l e g i n g i na c c ura te p a r ti c u l a rs o f i nc o m e a t t ri b u ta bl e t o d is a l l o w a nc e o f de pr ec i ati o n o f Rs. 1, 3 6, 5 9 , 21 7 / - on ly . 3. B ri e f l y st a t e d, th e a ss e s se e i s e n ga ge d in t h e bu si n e ss o f I.T.A. No.1798/Del/2022 2 ma nu fa c tu ri ng , s al e a nd p ur c h a s e o f d ri nk i n g w a te r a n d so ft dr i n k. Th e a ss e s se e - c o mp an y fi l e d r et u r n o f i n c o m e a t lo ss o f Rs. 3, 0 1, 4 6 , 65 2 / - fo r t h e A s se ss me nt Y ea r 2 0 14 -1 5 i n q u es t i on . 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T he A sse s si n g O f fi c er ho w ev er o b s e r ve d th at t h e a ss e s s ee w as n ot a ll ow e d t o r e v i se t he c o m pu ta t i o n a ft er t h e i s s ue of s t a t ut o r y n o t i c e un d e r S e c t i o n 1 4 3 ( 2 ) a nd t h us w h i l e s c a l in g d ow n t he re t ur n lo ss o n a cc ou nt o f e xc e s s d ep re ci a t i o n c l a i m e d i n t h e r e t urn o f i n co me , t h e A sse s si n g O f fi c er a l so h e l d t h a t t he a ss e s se e w a s gui l t y o f fu r ni sh i n g i na c c u r a t e pa rt i c u la r s o f i n c o m e b y c l a im i ng e x ce ss de p r e c i a ti on a n d co n se q u e n t l y i n v o k ed p ro v i si o n s o f S e c t i o n 27 1 (1 )( c ) o f t he A c t t ow a rd s s u c h u n fo un d e d e x c e ss d e p r e c i a t io n c la i me d. 4. T he CI T (A ) i n t h e f i r st a p pe al , co n fi r me d t he p en al t y i mp o se d by t h e A s s e ss i n g O f fi c e r @ 10 0% o f t a x s o u g h t t o b e e v a de d o n t h i s c ou n t. 5. F u rt h e r a gg ri e ve d, t h e a s se s s ee pr e fe rr ed a p pe a l b e f or e t he Tr i bu n a l . 6. W e ha ve he ar d t h e ri v a l s u b mi ssi o n s a nd pe r u se d t h e ma t er i al a va il a b l e on r ec or d . I.T.A. No.1798/Del/2022 3 7. T he ma i n p l a n k o f t he c o n t e n t i on o f t h e a sse ss e e i s su m ma r i z e d a s u nd er : ( i ) t he as se ss e e f i le d l os s re tu rn a t R s. 3. 0 1 c r or e a n d a s a r e s ul t o f s uc h w ro n g c la i m o f de pre c i a t i o n , t he l o ss r e t u r n ed w a s b ro ug h t do w n. T h u s, t h e t ax l i a bi l i t y r e ma i n s u na ffe c t ed b y s uc h i n c o r re c t c l a i m pe r se a nd i t i s o nl y l o ss c ar ri e d fo rw a r d w hi c h h a s b e e n re d uc e d. ( i i ) Th e l os s o n a c c o un t o f w r o ng c l ai m o f d e p r ec i a t i on ha s n e v e r be en av ai l e d in t h e s ub se q ue nt re t ur n s. T h u s, no be ne f it h a s b e e n t a ke n b y t he as s e ss e e f ro m suc h i na dv er t ent m i sta ke . T he a ss e s se e c o m m i t t e d a n i n ad ve r t e n t mi st a k e i n a do p t i n g d e p re c i a t i on a s pe r C o m p a n i e s A c t re fl e ct e d i n t h e a ud i t e d f i n a n c i a l s t at e me n t w hi l e co mp ut in g t h e t a x a b le i nco m e a s a g a i n st t he c o r r e c t c l a i m o f de pr e c i a t i on a s p e r S ec t i o n 3 2 o f t h e I nc o m e T a x A c t. T he mi s t a ke is o s te n si b l y b o n a f i d e a n d a h u m a n er r o r w i th n o m a la f i d e i nt e nt i o n t o c l a i m a ny t a x be n e fi t . ( i i i ) Th e a sse ss ee hi ms e l f su o m o tu c a m e f or w ar d i n t he c o u rs e o f t h e a ss e s s me nt p ro c e e d i ng s a s so on as i t d e t e c t e d t he m i st a k e a n d fi l e d t he re v i s e d o bj e c t i o n a s t he t i me fo r r ev i si n g t h e re t ur n o f in c o m e ha s e l a p se d. Th u s , t h e a s se ss ee h a s b r ou gh t su c h mi st a k e to t h e n ot i ce o f t he A s s es si n g O ff i c e r i t s el f. 8. I n t h e b a c k d r o p o f t h e fa ct u a l ma t r i x n o t e d a bo ve , w e st r a i g h t a w a y r e f er t he ju dg m e nt o f t h e H on ’ bl e D e l hi H i gh C ou r t i n t he c a se o f C I T v . B r ah m a pu t r a C o n so r t i u m L t d. ( 2 0 12 ) 3 48 IT R 33 9 (D e l ) w h e re i n t he is s u e w a s t he l e vy o f p en al t y o n ac c oun t o f i na cc ur a te cl a i m m ad e b y t h e a ss e s se e u n de r i n a d v e rt en c e a nd w he r e t he a s se ss e e ha s f il e d r et u r n c l a i m i n g lo s se s . In th e s i m i l a r fa c t u al ma t ri x, t h e H o n’ b l e D e l hi H i gh C ou rt he l d t h a t e x c es s c l a i m o f I.T.A. No.1798/Del/2022 4 de p r e c i a ti on w a s n o t a d v a n t a g e o us t o t h e a s se ss e e in a n y m an ne r. Th e e xc es s cl a i m o f d e p re c i a t i on w as he l d a n i n a d v ert e n t e r r o r an d no t a de v is e . T h e fa c t s i n t he in st an t c a s e a r e at b e t t e r fo ot i n g. I n t he i n s ta nt c a s e, t he in ad ve rt e nc e i s a t t r ib ut a bl e t o d e p r e c i a t io n a ll ow a n c e d u l y r e po r t e d u n d er t he Co m p a n i e s A c t an d w ro n g l y a do p t e d f or t h e p u rp o se s o f d e t e r m i n a t i o n o f t a x a b le i n c o m e. I t i s a pp a r e n t c a s e o f hu ma n e r r o r w i t h o ut a ny s i g n o f cul p a bi li t y. F ur th er mo re , th e A sse ss i n g O f fi c e r di d no t c o n t r ad ic t t h e p le a o f t he a ss es se e t h a t e x c e ss c l a i m o f d e p r e ci a t i o n w a s n ot a n a dv e r te nt e rr o r. 9. W e t h us s ee p a lp a b le m e r i t i n t h e p l ea o f t h e a sse ss e e fo r c an ce l l a t i on o f pe n a l t y . W e t h us re ve rse t he a c t i o n o f t he CI T( A ) a nd di r e c t t h e A ss e ss i n g O f fi c e r t o d el e t e t h e p e n al t y i m p o s ed o n t hi s sc o r e . 10 . I n t h e re s ul t , th e a p p e a l o f th e a s se ss e e i s a ll o w ed . Order pronounced in the open Court on 27/09/2023 Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /09/2023 Prabhat