Assistant Commissioner of Income-tax 1(2), RAIPUR (CG) V. M/s Navbharat Explosives Co.Ltd, RAIPUR (CG)

ITA 20/BIL/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0529 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: K M DESH
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER ./ ITA NO. 20/BLPR/2012 / ASSESSMENT YEAR: 2008 - 09 ASSTT. COMMISSIONER OF INCOME - TAX - 1(2), RAIPUR (C.G.) VS. M/S. NAVBHARAT EXPLOSIVES CO. LTD., GROUND FLOOR, NAVBHARAT UDYOG BHAWAN, RING ROAD NO.1, TELIBANDHA, RAIPUR (C.G.) PAN : AAACN 7535 Q / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI D.K. JAIN, (JCIT) ASSESSEE(S) BY : SHRI K. M. DESHPANDE, AR / DATE OF HEARING : 07 / 10 /2015 / DATE OF PRONOUNCEMENT: 09 / 10 /201 5 / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) , RAIPUR (CG) DATED 28.11.2011 FOR ASSESSMENT YEAR 200 8 - 0 9 . 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE REVENUE IS AGAINST THE CANCELLATION OF PENALTY OF RS.17,04,000/ - LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME - TAX ACT. 3. THE FACTS OF THE CASE ARE THAT FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD FILED THE RETURN DECLARING NIL INCOME. THE ASSESSING OFFICER MADE VARIOUS ADDITIONS, AMOUNTING TO RS.75,95,828. HOWEVER, ITA NO. 20/B LPR/2012 ACIT VS. NAVBHARAT EXPLOSIVES CO. LTD. AY: 2008 - 09 2 AFTER SET OFF OF CARRIED FORWARD UNABSORBED DEPREC IATION, THE TOTAL INCOME FINALLY DETERMINED WAS NIL. THE ASSESSEE ACCEPTED THE ASSESSMENT ORDER. THE ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) IN RESPECT OF FOLLOWING TWO ADDITIONS: - I) DIFFERENCE IN THE CONTRACT RECEIPT OF RS.6,42,911/ - II) DISAL LOWANCE OF DEPRECIATION OF RS.48,70,242/ - 4. THE CIT(A) CANCELLED THE PENALTY; HENCE THIS APPEAL BY THE REVENUE. 5. AT THE TIME OF HEARING BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME IN AS MUCH AS THERE WAS DIFFERENCE IN THE RECEIPT DISCLOSED BY THE ASSESSEE AND THE RECEIPT AS PER TDS CERTIFICATE. THE ASSESSEE AGREED FOR THE ADDITION OF RS.6,42,911/ - ONLY AFTER THE DETECTION OF SUCH DIFFERENCE BY THE AS SESSING OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD CLAIMED THE DEPRECIATION ON VEHICLES AT THE RATE OF 30% WHILE THE CORRECT RATE OF DEPRECIATION WAS 15%. THUS, THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME WITH REGARD TO RECEIPT AS WEL L AS THE RATE OF DEPRECIATION. HE, THEREFORE, SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE REVERSED AND THAT OF ASSESSING OFFICER MAY BE RESTORED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A). HE SU BMITTED THAT THE ASSESSING OFFICER ONLY ASKED THE ASSESSEE TO FURNISH THE RECONCI LIATION OF THE TDS CLAIM ED AND THE RECEIPT DISCLOSED BY THE ASSESSEE. THAT, WHILE PREPARING SUCH RECONCILIATION THE ASSESSEE NOTICED THAT THERE WAS DIFFERENCE IN THE RECEIPT ITA NO. 20/B LPR/2012 ACIT VS. NAVBHARAT EXPLOSIVES CO. LTD. AY: 2008 - 09 3 DISCLOSED BY THE ASSESSEE IN AS MUCH AS THE SUM OF RS.6,42,911/ - , WHICH WAS THE PAYMENT AS PER TDS CERTIFICATE DATED 27.12.2007, WAS INADVERTENTLY LEFT TO BE ACCOUNTED FOR. THE ASSESSEE, THEREFORE, VOLUNTARILY OFFERED THE CONTRACT INCOME OF RS.6,42,911/ - . HE STATED THAT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD INCURRED THE LOSS OF RS.2,27,13,011/ - . THE ASSESSEE FILED THE RETURN DISCLOSING NIL INCOME. THUS, THERE CANNOT BE ANY MOTIVE OR INTENTION TO SUPPRESS THE RECEIPT OR CLAIM OF DEPRECIATION AT HIGHER RATE. HE FURTHER STATED THAT ALL THE FACTS RELATING TO RECEIPTS, ALL TDS CERTIFICATES, COMPLETE PARTICULARS OF THE VEHICLES PURCHASED BY THE ASSESSEE AND RATE OF DEPRECIATION CLAIMED WERE FURNISHED BY THE ASSESSEE. THAT MERELY BECAUSE THE DEPR ECIATION IS ALLOWED AT THE RATE OF 15% AS AGAINST 30% CLAIMED BY THE ASSESSEE IT CANNOT BE SAID THAT THE ASSESSEE EITHER CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IN SUPPORT OF THIS CONTENTION, HE RELIED UPON THE D ECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT LTD, REPORTED IN [2010] 322 ITR 158 (SC) . 7. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. SO FAR AS THE PENALTY WI TH REGARD TO REDUCTION IN THE CLAIM OF DEPRECIATION BY THE ASSESSEE IS CONCERNED, THE SAME IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT LTD, REPORTED IN [2010] 322 ITR 158 (SC) , WHEREIN THEIR LORDSHIPS HELD THAT EVEN IF THE CLAIM OF ANY DEDUCTION IS WRONG, IT DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME, PROVIDED ALL THE FACTS ARE ITA NO. 20/B LPR/2012 ACIT VS. NAVBHARAT EXPLOSIVES CO. LTD. AY: 2008 - 09 4 CORRECTLY DISCLOSED BY THE ASSESSEE. ADMITTEDLY, ALL THE FACTS RELATI NG TO DEPRECIATION WERE DULY DISCLOSED BY THE ASSESSEE AND EVEN THE DEPARTMENT HAS NOT DENIED THE ASSESSEES CLAIM OF DEPRECIATION, BUT INSTEAD OF 30% THE DEPRECATION IS ALLOWED AT THE RATE OF 15%. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE APEX COURT, HOLD THAT THE CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED WITH REFERENCE TO DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS.48,70,242/ - . 8. WITH REGARD TO ADDITION OF RS.6,42,911/ - IS CONCERNED, FROM THE PERUSAL OF ASSESSMENT ORDER WE FIND THAT THE ASSESSING OFFICER SIMPLY ASKED THE ASSESSEE TO FILE THE RECONCILIATION OF RECEIPT WITH THE TDS CLAIMED. IN RESPONSE TO WHICH, THE ASSESSEE FURNISHE D THE FOLLOWING REPLY: - THE RECONCILIATION WITH TDS CLAIMED AND INCOME SHOWN IS ENCLOSED HEREWITH (PAGE 12/1 TO 12/10). THE SAME IS IN AGREEMENT FOR TRANSPORTATION CHARGES RECEIVED, RENT AND INTEREST. HOWEVER UNDER CONTRACT THERE IS DIFFERENCE OF RS.6,4 2,911/ - AS ONE OF THE PAYMENT AS PER TDS CERTIFICATE DATED 27.12.2007 IS INADVERTENTLY LEFT TO BE ACCOUNTED FOR. THE ASSESSEE IS THEREFORE VOLUNTARILY OFFERING THE CONTRACT INCOME OF RS.6,42,911/ - WHICH MAY PLEASE BE INCLUDED IN THE INCOME AS THE SAME HAS NOW COME TO THE NOTICE OF THE ASSESSEE, WHILE PREPARING THE RECONCILIATION CHART. 9. AFTER CONSIDERING THE ABOVE REPLY, THE ASSESSING OFFICER MADE THE ADDITION OF RS.6,42,911/ - WITH THE FOLLOWING OBSERVATION : - THEREFORE, RS.6,42,911/ - IS INCLUDED IN THE INCOME OF THE ASSESSEE AND PENALTY PROCEEDINGS U/S 271(1)(C) ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ITA NO. 20/B LPR/2012 ACIT VS. NAVBHARAT EXPLOSIVES CO. LTD. AY: 2008 - 09 5 10. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSING OFFICER DID NOT DETECT ANY SUPPRESSION OF RECEIPT, BUT HE ONLY ASKED THE ASSESSEE TO FURNISH THE RECONCILIATION OF RECEIPT AND THE CLAIM OF TDS. WHILE PREPARING SUCH RECONCILIATION, THE ASSESSEE NOTICED THE DIFFERENCE IN RECEIPT AMOUNTING TO RS.6,42,911/ - AND THE ASSESSEE OFFERED THAT SUCH AMOUNT MAY BE ADDED TO THE CONTRACT R ECEIPT. IT IS CLAIMED BY THE ASSESSEE THAT IT WAS AN INADVERTENT MISTAKE. WE FIND THAT IN PAGE NO.1 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAD FILED THE RETURN DISCLOSING INCOME AT NIL . HE HAS ALSO NOTED THAT THE ASSESSEE HAS INCURRED LOSS OF RS.2,27,13,011/ - . WHEN THE ASSESSEE HAS INCURRED HUGE LOSS, THEN THERE CANNOT BE ANY INTENTION TO SUPPRESS THE RECEIPT. MOREOVER, THE ASSESSEE HAD HUGE CARRIED FORWARD LOSS AS WELL AS UNABSORBED DEPRECIATION OF EARLIER YEARS WHICH IS NOTED BY THE ASSESSING OFFICER IN HIS ORDER. IN VIEW OF THESE FACTS, WE AGREE WITH THE CONTENTION OF THE LEARNED COUNSEL THAT THE MISTAKE IN THE RECORDING OF THE RECEIPT WAS AN INADVERTENT MISTAKE AND THE LEARNED CIT(A) RIGHTLY HELD THAT ON SUCH INADVERTENT MISTAKE WHICH IS VOLUNTARILY RECTIFIED BY THE ASSESSEE AS SOON AS THE MISTAKE WAS NOTICED , T HE ASSESSEE CANNOT BE HELD TO BE LIABLE FOR PENALTY U/S 271(1)(C). WE, THEREFORE, UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE RE VENUE. 11. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 09 TH OCTOBER, 2015 AT RAIPUR . SD/ - SD/ - (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (G.D. AGRAWAL) VICE - PRESIDENT RAIPUR ; DATED 09 / 1 0 /201 5 BIJU T., PS ITA NO. 20/B LPR/2012 ACIT VS. NAVBHARAT EXPLOSIVES CO. LTD. AY: 2008 - 09 6 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, RAIPUR