Radha Exports (India) P. Ltd., CHENNAI V. DCIT, CHENNAI

ITA 2070/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6255 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-06-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 08-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2070/MDS/2016 & '& / ASSESSMENT YEAR : 2005-06 M/S RADHA EXPORTS (INDIA) PVT. LTD., C/O SHRI S. SRIDHAR, SH. A.S. SRIRAMAN, ADVOCATES, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI - 600 020. PAN : AACCR 7698 L V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE V(3), CHENNAI. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE +,)* - . / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT / - 0' / DATE OF HEARING : 28.08.2017 12' - 0' / DATE OF PRONOUNCEMENT : 06.09.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -3, CHENNA I, DATED 22.03.2016 CONFIRMING THE PENALTY LEVIED BY THE ASS ESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.2070/MDS/16 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDING, TH E ASSESSEE CLAIMED DEPRECIATION TO THE EXTENT OF ` 19,62,632/-. ACCORDING TO THE LD. COUNSEL, WHAT WAS PURCHASED BY THE ASSESSEE IS ONLY EVACUATOR. THE PURCHASE OF EVACUATOR IS NOT IN DIS PUTE. THE ASSESSING OFFICER FOUND THAT THE EVACUATOR WAS NOT PUT TO USE BEFORE 31.03.2005. THEREFORE, HE DISALLOWED THE CL AIM OF THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, EVACUATOR DOES NOT REQUIRE ANY SPECIAL INSTALLATION, THEREFORE, THE MOMENT IT WAS PURCHASED, IT WAS READY FOR USE. HENCE, ACCORDING TO THE LD. COU NSEL, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWING T HE CLAIM OF THE ASSESSEE. 3. THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMITTE D THAT WHEN THE ASSESSEE CLAIMED DEPRECIATION AS PER ITS UNDERS TANDING OF THE INCOME-TAX ACT, MERELY BECAUSE THE ASSESSING OFFICE R DISALLOWED THE CLAIM OF THE ASSESSEE THAT WOULD NOT BE CONSIDE RED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. REFERRING TO THE JUDGMENT OF MADRAS HIGH C OURT IN CIT V. ANITA KUMARAN (2017) 148 DTR 281, THE LD.COUNSEL SU BMITTED THAT ON IDENTICAL SITUATION, THE ASSESSEE BEFORE THE HIG H COURT CLAIMED 3 I.T.A. NO.2070/MDS/16 TRAVELLING AND OTHER EXPENSES FOR EARNING INCOME FR OM OTHER SOURCES. THIS TRIBUNAL BY PLACING RELIANCE ON THE JUDGMENT OF APEX COURT IN CIT V. RELIANCE PETROPRODUCTS PVT. LTD. (3 22 ITR 158), FOUND THAT WHEN THE ASSESSEE FURNISHED ALL THE DETA ILS OF CLAIM FOR DEDUCTION, MERELY BECAUSE THE SAME WAS NOT ALLOWED BY THE ASSESSING OFFICER THAT WOULD NOT AMOUNT TO FURNISHI NG OF INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, ACCORDING TO T HE LD. COUNSEL, THIS TRIBUNAL DELETED THE PENALTY AND THE ORDER OF THIS TRIBUNAL WAS CONFIRMED BY THE HIGH COURT. 4. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSEE CLAIMED DEPRECIATION ON THE EVACUATOR WHICH WAS NOT PUT TO USE DURING THE YEAR UNDER DEDUCTION. THEREFORE, THE ASSESSING OFF ICER HAS RIGHTLY LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT A ND IT WAS RIGHTLY CONFIRMED BY THE CIT(APPEALS). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE CLAIMED DEPRECIATION ON EVACUATOR. AS RIG HTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THE PURCHASE OF EVACUATOR BY THE ASSESSEE WAS NOT IN DISPUTE. WHAT IS DISPUTED IS WHETHER THE 4 I.T.A. NO.2070/MDS/16 ASSESSEE PUT TO USE THE EVACUATOR BEFORE 31.03.2005 . THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE ASSES SEE HAS FURNISHED THE DETAILS OF PURCHASE OF THE MACHINERY AND CLAIMED DEPRECIATION DURING THE COURSE OF ASSESSMENT PROCEE DING, WHETHER THAT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTI CULARS OR CONCEALMENT OF ANY INCOME? THE APEX COURT IN RELIA NCE PETROPRODUCTS PVT. LTD. (SUPRA) HAD AN OCCASION TO EXAMINE THE SAME. THE APEX COURT FOUND THAT WHEN THE ASSESSEE HAS FURNISHED ALL THE DETAILS AND CLAIMED THE EXPENDITURE, IT DOE S NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF ANY PART OF INCOME. IN THIS CASE ALSO, THE ASSESSEE HAS FURNIS HED ALL THE PARTICULARS OF ITS INCOME, THEREFORE, IT IS NOT A C ASE OF CONCEALMENT OF INCOME OF THE ASSESSEE. 6. MOREOVER, THE ASSESSEE PURCHASED THE EVACUATOR A ND CLAIMED DEPRECIATION AS PROVIDED IN THE STATUTORY P ROVISIONS. DEPRECIATION IS A STATUTORY CLAIM AS PROVIDED IN IN COME-TAX ACT. WHETHER THE ASSESSEE IS ENTITLED FOR SUCH DEPRECIAT ION OR NOT IS FOR THE DECISION OF THE ASSESSING OFFICER. MERE MAKING CLAIM AS PER THE UNDERSTANDING OF LAW BY THE ASSESSEE CANNOT BE CONS TRUED AS FURNISHING OF INACCURATE PARTICULARS OF ANY PART OF INCOME OF THE 5 I.T.A. NO.2070/MDS/16 ASSESSEE. THEREFORE, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY UNDER SECT ION 271(1)(C) OF THE ACT. A SIMILAR VIEW WAS TAKEN BY THE MADRAS HIGH C OURT IN ANITA KUMARAN (SUPRA). IN VIEW OF THE ABOVE, WE ARE UNAB LE TO UPHOLD THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORD ERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE PENALTY LEV IED BY THE ASSESSING OFFICER IS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 6 TH SEPTEMBER, 2017 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 6 TH SEPTEMBER, 2017. KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-3, CHENNAI 4. PRINCIPAL CIT, CHENNAI-5, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.