Heenon Texturisers Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(2), Surat

ITA 1989/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94371 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 08-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILAS SHINDE
• Keywords: Depreciation; Reasonable cause; Wrong claim; Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: S H RI G. D. AGRAWAL , VICE PRESIDENT AND SHR I S. S. GODARA , JUDICIAL MEMBER HEENON TEXTURIZ ER PVT. LTD, C/O SHIVAN MARKETING, 212, BHAVANI CHAMBERS, NANI BEGAMBAR, SALABATPURA, SURAT PAN: AAACH5936L (APPELLANT) VS THE ITO, WARD - 1(2), SURAT (RESPONDENT) REVENUE BY : S H RI VILA S SHINDE SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 19 - 08 - 2 015 DATE OF PRONOUNCEMENT : 26 - 08 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2007 - 08, AR ISES FROM ORDER OF THE CIT(A) - I, SURAT DATED 28 - 04 - 2010 IN APPEAL NO. CAS - I/306/ 09 - 10, I T A NO . 1989 / A HD/20 10 A SSESSMENT YEAR 200 7 - 08 I.T.A NO. 1989 /AHD/20 10 A.Y. 2007 - 08 PAGE NO HEENON TEXTURISING PVT. LTD VS. ITO 2 IN PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. CASE CALLED TWICE. NONE PRESE NT AT THE ASSESSEE S BEHEST. WE FIND THAT IT HAS FILED WRITTEN SUBMISSIONS DATED 17 - 08 - 2015 ON RECORD. WE ACCORDINGLY PROCEED EX - PARTE. THE APPEAL IS TAKEN FOR DISPOSAL ON MERITS. 3. THE ASSESSEE S SOLE SUBSTANTIVE GROUND CHALLENGES SECTION 271(1) PE NALTY OF RS. 94,715/ - IMPOSED IN THE PENALTY ORDER DATED 26 - 02 - 2010 AND AFFIRMED IN THE LOWER APPELLATE PROCEEDINGS. IT HAD CLAIMED DEPRECIATION ON FIXED ASSETS COMPRISING OF PLANT, MACHINERY, FURNITURE/FIXTURE, BUILDING ETC. OF RS, 2,81,388/ - . THE ASSE SSING OFFICER TOOK UP SCRUTINY . HE NOTICED THE ABOVE STATED DEPRECIATION CLAIM AS NOT TO HAVE DEBITED IN BOOKS OF ACCOUNTS. NOR WAS THERE ANY MANUFACTURING ACTIVITY AS ONLY THREE SALES HAD TAKEN PLACE IN THE RELEVANT PREVIOUS YEAR. THE ASSESSING OFFICER WAS OF THE VIEW THAT THIS CLAIM WAS NOT ALLOWABLE AS THE RELEVANT ASSETS HAD NOT BEEN PUT TO USE. THE ASSESSEE PLEADED THAT THERE WAS BUSINESS ACTIVITY SINCE ITS STOCK WAS AVAILABLE THROUGHOUT THE YEAR. THE ASSESSING AUTHORITY REITERATED ITS ABOVE STATE D REASONS FOR DISALLOWING THE IMPUGNED CLAIM IN REGULAR A ASSESSMENT FRAMED ON 31 - 08 - 2009. THE ASSESSEE S INCOME WAS ASSESSED AT A LOSS OF RS. 50,840/ - . TH E IMPUGNED PENALTY PROCEEDINGS STOOD INITIATED ALLEGING CONCEALMENT AND FURNISHING OF INACCURATE PA RTICULARS OF INCOME. THE ASSESSEE I.T.A NO. 1989 /AHD/20 10 A.Y. 2007 - 08 PAGE NO HEENON TEXTURISING PVT. LTD VS. ITO 3 DOES NOT SEEM TO HAVE FILED ANY APPEAL. QUANTUM PROCEEDINGS ACCORDINGLY ATTAINED FINALITY. 4. THE ASSESSING OFFICER TOOK UP PENALTY PROCEEDINGS. THE ASSESSEE FILED ITS REPLY DATED 15 - 02 - 2010 GIVING A DETAILED NOTE OF THE DELIBERATIONS IN T HE COURSE OF SCRUTINY AND PLEADED THAT NEITHER THERE WAS A NY CONCEALMENT ON ITS PART NOR HAD IT FILED INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER REITERATED HIS VIEW AS ADOPTED IN ASSESSMENT AND TREATED THE SAME AS AN IN STANCE OF FURNISHING OF INACCURATE PARTICULARS FOR CONCEALMENT OF INCOME WILLFULLY, KNOWINGLY, AND WITHOUT REASONABLE CAUSE. HE ACCORDINGLY IMPOSED THE IMPUGNED PENALTY OF RS. 84,416/ - . THE CIT(A) HAS UPHELD THE ASSESSING OFFICER S ACTION. 5 . WE HAVE HEARD THE REVENUE AND GONE THROUGH THE CASE FILE. RELEVANT FACTS ALREADY STAND NARRATED HEREINABOVE. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAD CLAIMED IMPUGNED DEPRECIATION ON FIXED ASSETS AMOUNTING TO RS. 2,81,388/ - . THE ASSESSING OFFICER INVOKED THE IMPUGNED DISALLOWANCE ON TWO COUNTS; THE FIRST ONE BEING THAT THE SAME HAD NOT BEEN DEBITED IN PROFIT AND LOSS ACCOUNT AND THE SECOND REASON WAS THAT ASSETS WERE NOT PUT TO USE IN RELEVANT PREVIOUS YEAR. HE WOULD DISALLOW ASSESSEE S CLAIM AS NOT MADE OUT UNDER THE LAW. IT IS NOWHERE THE CASE OF THE REVENUE OR THAT OF THE LOWER AUTHORITIES THAT THE ASSESSEE S PARTICULARS ENCLOSED IN SUPPORT OF THE CLAIM WERE PROVED FALSE. WE FIND THAT THE DISALLOWANCE IN QUESTION STOOD MADE ONLY AS PER THE I.T.A NO. 1989 /AHD/20 10 A.Y. 2007 - 08 PAGE NO HEENON TEXTURISING PVT. LTD VS. ITO 4 DETAILS AV AILABLE ON RECORD. IT IS A TRITE PROPOSITION OF LAW AND ALSO AS HELD IN CASE LAW OF CIT VS. RELIANCE PETRO - PRODUCT (2010) 322 ITR 158 (SC) THAT EACH AND EVERY DISALLOWANCE DOES NOT LEAD TO AUTOMATIC IMPOSITION OF PENALTY. THE HON BLE JURISDICTIONAL HIGH COURT IN (2007) 294 ITR 501 (GUJ) CIT VS. MANIBHAI AND BROTHERS HOLDS THAT WHERE AN ASSESSEE WRONGLY CLAIMS SOME DEDUCTION UNDER A BONAFIDE MISTAKE, SECTION 271(1) IS NOT LEVIABLE. IT HAS COME ON RECORD THAT THE ASSSESSEE HAD ONLY PUT UP A WRONG CLAIM OF DEDUCTION ONLY AND NOT A FALSE OR BASELESS ONE. WE ADOPT THE ABOVE STATED REASONING AND HOLD THAT THE PRESENT IS NOT A FIT CASE TO UPHOLD THE IMPUGNED SECTION 271(1) OF RS. 94,715/ - . THE SAME IS DELE D. 6. THIS ASSESSEE S APPEAL IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 26 - 08 - 2015 SD/ - SD/ - ( G.D. AGRAWAL ) ( S. S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD : DATED 26 /08 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 1989 /AHD/20 10 A.Y. 2007 - 08 PAGE NO HEENON TEXTURISING PVT. LTD VS. ITO 5 BY ORDER/ , / ,