JCIT(OSD), Circle - 9, Kolkata, Kolkata V. M/s. Swapna Printing Works (P) Ltd., Kolkata

ITA 203/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3075 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 07-02-2012
• Court: TRIBUNAL
• Department Lawyers: J KHAN
• Keywords: Depreciation; Additional depreciation; Wrong claim
• Section: 43B; 143(3); 14A

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE . . . . . . . . , !' /AND #! $'# , ) [BEFORE SHRI K. K. GUPTA, AM & SHRI MAHAVIR SINGH, JM] '% '% '% '% / I.T.A NO. 203/KOL/2012 $&' !() $&' !() $&' !() $&' !()/ // / ASSESSMENT YEAR: 200 6- 0 7 JOINT COMMISSIONER OF INCOME-TAX, VS. M/S. SWAPN A PRINTING WORKS (P) LTD. CIRCLE-9, KOLKATA (PAN:AADCS8593Q) (+, /APPELLANT ) (-.+,/ RESPONDENT ) DATE OF HEARING: 17.04.2013 DATE OF PRONOUNCEMENT: 19.04.2013 FOR THE APPELLANT: SHRI J. KHAN, SR. DR FOR THE RESPONDENT: SHRI SUNIL SURANA / / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-VIII, KOLKATA IN APPEAL NO. 43/CIT(A)-VIII/KOL/09-10 DATED 18.11.2011. ASSESSME NT WAS FRAMED BY ACIT, CIRCLE-9, KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DATED 05.11. 2008. PENALTY IN DISPUTE WAS LEVIED BY ACIT, CIR-9, KOLKATA U/S. 271(1)(C) OF THE ACT VIDE HIS ORDER DATED 29.05.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT BY THE AO ON THE CLAIM OF DEPRECIATION. FOR THIS, REVENUE HAS RAISED FOLLOWING THREE GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE PENALTY U/S. 271(1(C) RELYING ON CASE LAWS BUT WITHOUT CONSIDERING THE INTENTION OF THE ASSESSEE THAT IT HAS FURNISHED INC ORRECT PARTICULAR WILLFULLY WHICH TESTAMENT TO CONCEALMENT OF INCOME. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE PEPALTY U/S. 271(1)(C) WITHOUT CONSIDE RING THE FACTS THAT THE PENALTY MAY BE IMPOSED FOR WILLFUL FURNISHING THE INCORRECT PARTIC ULARS WHICH TESTAMENT TO EVADE TAX OR CONCEALMENT OF INCOME. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S. 271(1)(C) FAILED TO APPRE CIATE THE TEST AS HONBLE SUPREME COURT PRONOUNCED IN THE CASE OF UOI VS. DHARMENDRA TEXTILES PROCESSORS ON WHICH THE THEN A.O. RELIED UPON. 2 ITA NO.203K/2012 M/S. SWAPNA PRINTING WORKS (P LTD. AY 06-07 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.03.2007 AND ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT VIDE ORDER DATED 05.1 1.2008 BY THE AO. THE AO WHILE COMPLETING ASSESSMENT MADE DISALLOWANCE OF DEPRECIA TION AT RS.3,80,692/- ON THE GROUND THAT MACHINERY WERE NOT PUT TO USE DURING THE YEAR. TH E AO FURTHER ALLOWED ADDITIONAL DEPRECIATION ON XEROX MACHINE AND ALSO PAYMENT OF P F U/S. 43B OF THE ACT. THE AO INITIATED PENALTY PROCEEDINGS AND ALSO IMPOSED PENALTY RELYIN G ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSORS (2008) 306 ITR 277 (SC). BEFORE THE LOWE AUTHORITIES INCLUDING THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, DURING PENALTY PROCEEDINGS AND EVEN BE FORE CIT(A) DURING APPELLATE PROCEEDINGS, THE ASSESSEE CLAIMED THAT DEPRECIATION WAS CLAIMED ON THE BASIS OF TAX AUDIT REPORT AND COMPLETE PARTICULARS REGARDING DEPRECIATION WERE DI SCLOSED IN THE TAX AUDIT REPORT. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US AS WELL AS BEFOR E CIT(A) RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCT P. LTD. (2010) 322 ITR 158, WHEREIN IT IS HELD AS UNDER: WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT , THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTERS DICTIONARY, THE WORD INA CCURATE HAS BEEN DEFINED AS : NOT ACCURATE, NOT EXACT OR CORRECT ; NOT ACCORDING TO TRUTH ; ERRONEOUS ; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT. WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTI CULARS IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MU ST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORREC T, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCO RRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVIT ING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NO T SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACC URATE PARTICULARS. IT WAS TRIED TO BE SUGGESTED THAT SECTION 14A OF TH E ACT SPECIFICALLY EXCLUDED THE DEDUCTIONS IN RESPECT OF THE EXPENDITURE INCURRED B Y THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IT WAS FURTHER POINTED OUT THAT THE DIVIDENDS FROM THE SHARES DID NOT FORM THE PART OF THE TOTAL INCOME. IT WAS, THEREFORE, REITERATED BEFORE US THAT THE ASSESSING OFFICER HAD CORRECTLY REACHED THE CONCLUSION THAT SINCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY ARE INCORRECT ; IT AMOUNTED TO CONCEALMENT OF INCOME. IT WAS TRIED TO BE ARGUED THAT THE FALSEHOOD IN ACCOUNTS CAN TAKE EITHER OF THE TWO FORMS ; AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY ; (II) AN ITEM OF EXPENDITURE MAY BE F ALSELY (OR IN AN EXAGGERATED AMOUNT) CLAIMED, AND BOTH TYPES ATTEMPT TO REDUCE THE TAXAB LE INCOME AND, THEREFORE, BOTH TYPES 3 ITA NO.203K/2012 M/S. SWAPNA PRINTING WORKS (P LTD. AY 06-07 AMOUNT TO CONCEALMENT OF PARTICULARS OF ONES INCOM E AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE DO NOT AGREE, AS THE ASSE SSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEAL MENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETUR N OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPT ED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER SECTION 271(1)(C). IF WE ACCEPT THE CONTENTION OF THE REVEN UE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFF ICER FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECTION 271(1)(C). THAT IS CLE ARLY NOT THE INTENDMENT OF THE LEGISLATURE. IN THIS BEHALF THE OBSERVATIONS OF THIS COURT MADE IN SREE KRISHNA ELECTRICALS V. STATE OF TAMIL NADU [2009] 23 VST 249 AS REGARDS THE PENALTY ARE APPOSITE. IN THE AFOREMENTIONED DECISION WHICH PERTAINED TO THE PENA LTY PROCEEDINGS UNDER THE TAMIL NADU GENERAL SALES TAX ACT, THE COURT HAD FOUND THA T THE AUTHORITIES BELOW HAD FOUND THAT THERE WERE SOME INCORRECT STATEMENTS MADE IN T HE RETURN. HOWEVER, THE SAID TRANSACTIONS WERE REFLECTED IN THE ACCOUNTS OF THE ASSESSEE. THIS COURT, THEREFORE, OBSERVED (PAGE 251) : SO FAR AS THE QUESTION OF PENALTY IS CONCERNED THE ITEMS WHICH WERE NOT INCLUDED IN THE TURNOVER WERE FOUND INCORPORATED IN THE APPELLANTS ACCOUNT BOOKS. WHERE CERTAIN ITEMS WHICH ARE NOT INCLUDED I N THE TURNOVER ARE DISCLOSED IN THE DEALERS OWN ACCOUNT BOOKS AND THE ASSESSING AUTHORITIES INCLUDES THESE ITEMS IN THE DEALERS TURNOVER DISAL LOWING THE EXEMPTION, PENALTY CANNOT BE IMPOSED. THE PENALTY LEVIED STAND S SET ASIDE. THE SITUATION IN THE PRESENT CASE IS STILL BETTER A S NO FAULT HAS BEEN FOUND WITH THE PARTICULARS SUBMITTED BY THE ASSESSEE IN ITS RETURN . THE TRIBUNAL, AS WELL AS, THE COMMISSIONER OF INCOM E-TAX (APPEALS) AND THE HIGH COURT HAVE CORRECTLY REACHED THIS CONCLUSION AND, THEREFO RE, THE APPEAL FILED BY THE REVENUE HAS NO MERITS AND IS DISMISSED. HE FURTHER RELIED ON THE DECISION OF HONBLE CALCUT TA HIGH COURT IN THE CASE OF USHA MARTIN VENTURES LTD. & ORS. VS. ITO & ORS. IN GA NO.953 OF 2011, INCOME TAX APPEAL NO. 90 OF 2010 DATED 20.05.2011, WHEREIN IT HAS BEEN HELD AS UNDER: IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD., REPORTED IN 2010 (322) ITR 138, NO PENALTY SHOULD BE IMPOSED UP ON THE APPELLANT FOR WRONG CLAIM OF DEPRECIATION IN VIOLATION OF THE PROVISIONS CONT AINED IN THE INCOME TAX ACT. WE HAVE ALREADY POINTED OUT THAT SUCH CLAIM WAS INI TIALLY MADE ON THE BASIS OF THE AUDITORS REPORT AND IT HAS ALSO BEEN BROUGHT TO TH E NOTICE OF THE AUTHORITIES BELOW THAT AFTER THE DETECTION OF SUCH MISTAKE COMMITTED BY TH E AUDITOR, THE SAID AUDITOR WAS CHANGED BY THE ASSESSEE. WE, THUS, FIND THAT THE LEARNED TRIBUNAL BELOW COMM ITTED SUBSTANTIAL ERROR OF LAW IN AFFIRMING THE ORDER OF IMPOSITION OF PENALTY WHICH IS NOT IN CONFORMITY WITH THE VIEW THAKEN BY THE SUPREME COURT IN THE ABOVEMENTIONED M ATTER. 4 ITA NO.203K/2012 M/S. SWAPNA PRINTING WORKS (P LTD. AY 06-07 WE FIND THAT THE ISSUE IS EXACTLY SIMILAR WHAT WAS BEFORE THE HONBLE CALCUTTA HIGH COURT IN THE CASSE OF USHA MARTIN VENTURES LTD. & ORS. (SUPR A). THE FACTS OF THE PRESENT CASE THAT THERE IS NO DOUBT THE CLAIM OF DEPRECIATION BY THE ASSESS EE WAS WRONG BUT ASSESEE HAS FILED COMPLETE PARTICULARS QUA THESE ASSETS AND ALSO THE CLAIM OF DEPRECIATION IN AUDIT REPORT AND IN THE RETURN OF INCOME AND NOTHING WAS CONCEALED FROM THE DEPART MENT. IN SUCH CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF USHA MARTIN V ENTURES LTD., SUPRA, WE ARE OF THE VIEW THAT PENALTY LEVIED BY AO HAS RIGHTLY BEEN DELETED BY CI T(A). WE CONFIRM THE SAME. APPEAL OF REVENUE IS DISMISSED. 4. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON 19.04.2013 SD/- SD/- . . . . . . . . , #! #! #! #! $'# $'# $'# $'# , (K. K. GUPTA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0 0 0 0) )) ) DATED : 19TH APRIL, 2013 !12 $&34 $5! JD.(SR.P.S.) 5 ITA NO.203K/2012 M/S. SWAPNA PRINTING WORKS (P LTD. AY 06-07 / 6 -$$7 87(9- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT JCIT, CIRCLE-9, KOLKATA. 2 -.+, / RESPONDENT M/S. SWAPNA PRINTING WORKS (P) LTD., 52, RAJA RAMMOHAN RAY SARANI, KOLKATA-700 009. 3 . $/& ( )/ THE CIT(A), KOLKATA 4. 5. $/& / CIT KOLKATA 7!>$ -$& / DR, KOLKATA BENCHES, KOLKATA .7 -$/ TRUE COPY, /&?/ BY ORDER, # '4 /ASSTT. REGISTRAR .