Synergy Chlorination Private Limited, Vadodara V. The Asstt. Commissioner of Income Tax, Circle-2(1)(1), Vadodara

ITA 2096/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5857 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 12-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B T THAKKAR
• Keywords: Depreciation; Additional depreciation; Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMB ER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 2096/AHD/2016 (ASSESSMENT YEAR : 2012-13) SYNERGY CHLORINATION PRIVATE LIMITED, PLOT NO. 89-90, GIDC, NANDESARI, VADODARA 391340 APPELL ANT VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), VADODARA RESPONDENT PAN: AADCS2995L / BY ASSESSEE : SHRI B. T. THAKKAR, A.R. / BY REVENUE : SHRI ALOK KUMAR, SR. D.R. /DATE OF HEARING : 12.03.2018 /DATE OF PRONOUNCEMENT : 13.03.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13, ARISES AGAINST THE CIT(A)-2, VADODARAS ORDER DATED 21.06.2016, IN CAS E NO. CAB/(A)-2/113/15-16, UPHOLDING ASSESSING OFFICERS ACTION LEVYING PENALT Y OF RS.40,000/-, IN PROCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT, 1 961, HEREINAFTER THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. ITA NO. 2096/AHD/2016 (SYNERGY CHLORINATION P. LTD. VS. ACIT) A.Y. 2012-13 - 2 - 2. WE ADVERT TO THE RELEVANT FACTS. THERE IS NO DI SPUTE THAT THE INSTANT PENALTY ISSUE ARISES FROM DISALLOWANCE OF ASSESSEES ADDITI ONAL DEPRECIATION CLAIM AMOUNTING TO RS.1,28,584/-. THE ASSESSEE IS A COMP ANY MANUFACTURING, TRADING AND DEALING IN CHEMICALS. THE ASSESSING OFFICER NOT ICED DURING THE COURSE OF SCRUTINY THAT THE ASSESSEE HAD CLAIMED ADDITIONAL D EPRECIATION @ 10% WHEREAS THEY HAD ACQUIRED OLD PLANT AND MACHINERY TO THE EXTENT OF RS.12,85,840/- FROM ITS HOLDING ENTITY M/S. MEGHMANI INDUSTRIES LTD. HE TH US DISALLOWED THE SAID ADDITIONAL DEPRECIATION CLAIM COMING TO RS.1,28,584 /- IN ASSESSMENT ORDER DATED 24.11.2014. HE FURTHER INITIATED THE IMPUGNED PENA LTY PROCEEDINGS U/S.271(1)(C) OF THE ACT ALLEGING FURNISHING OF INACCURATE PARTIC ULARS OF INCOME. ASSESSEE DID NOT PREFER ANY APPEAL. QUANTUM PROCEEDINGS THEREFO RE ATTAINED FINALITY. 3. CASE FILE SUGGESTS THAT THE ASSESSING OFFICER PA SSED HIS PENALTY ORDER ON 14.05.2015 REJECTING ASSESSEES CONTENTION THAT ITS ABOVE ADDITIONAL DEPRECIATION CLAIM WAS AN INADVERTENT MISTAKE ON ITS AUDITORS P ART. THE ASSESSING OFFICER INVOKED SECTION 271(1)(C) EXPLANATION (1) IN CONCLU DING THAT THE ASSESSEE HAD WILLFULLY, KNOWINGLY AND WITHOUT ANY REASONABLE CAU SE FURNISHED INACCURATE PARTICULARS OF INCOME WHILST RAISING ADDITIONAL DEP RECIATION CLAIM OF RS.1,28,584/-. HE THUS LEVIED THE PENALTY IN QUESTION COMING TO RS .40,000/- AS UPHELD IN LOWER APPELLATE PROCEEDINGS. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL SUBMISSIONS REITERATING BOTH PARTIES RESPECTIVE STANDS. THERE IS NO DISPU TE ABOUT THE SETTLED LAW REFERRING SECTION 271(1)(C) PENAL PROVISION THAT EACH AND EVE RY QUANTUM DISALLOWANCE/ADDITION DOES NOT IPSO FACTO ATTRACT T HE IMPUGNED PENAL PROVISION AS HELD IN HONBLE APEX COURTS DECISION IN CIT VS. RE LIANCE PETROPRODUCTS 322 ITR 158(SC). THE REVENUES ONLY CASE IS THAT THE ASSES SEE HAD PURCHASED OLD PLANT AND MACHINERY FROM ITS HOLDING COMPANY (SUPRA) AND RAIS ED ADDITIONAL DEPRECIATION CLAIM IN QUESTION BY TERMING THE SAME TO BE NEW ONE S. WE FIND NO REASON TO CONCUR WITH REVENUES STANDS / ARGUMENTS TO THIS EF FECT. A PERUSAL OF THE CASE FILE SUGGESTS THAT THE ASSESSEE HAD MADE HIS ADDITION IN ITS PLANT AND MACHINERY TO THE ITA NO. 2096/AHD/2016 (SYNERGY CHLORINATION P. LTD. VS. ACIT) A.Y. 2012-13 - 3 - TUNE OF RS.2,45,75,447/- IN THE RELEVANT PREVIOUS Y EAR. THIS FOLLOWED ITS ENTIRE DEPRECIATION CLAIM OF RS.35,78,616/- OUT OF WHICH A N AMOUNT OF RS.1,28,584/- IN QUESTION (SUPRA) STOOD DISALLOWED ON THE GROUND THA T THE RELEVANT PLANT AND MACHINERY WAS NOT A NEW ONE. IT THUS EMERGES THAT THERE WAS A BONAFIDE MISTAKE ON ASSESSEES AUDITORS PART IN CERTIFYING THE ENTI RE PLANT AND MACHINERY TO BE NEW WHICH WAS LATER ON RECTIFIED BEFORE THE SAME WOULD SEE ANY SPECIFIC NOTICE BY THE ASSESSING OFFICER PINPOINTING THE RELEVANT MISTAKE. WE CONCLUDE IN THESE FACTS THAT ASSESSEES ACT AND CONDUCT IN RAISING ITS ADDI TIONAL DEPRECIATION CLAIM IS NOT ANY INSTANCE OF FURNISHING OF INACCURATE PARTICULAR S OF INCOME ATTRACTING THE IMPUGNED PENAL PROVISION U/S.271(1)(C) OF THE ACT. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY AM OUNTING TO RS.40,000/-. 5. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 13 TH DAY OF MARCH, 2018.] SD/- SD/- (N. K. BILLAIYA) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD: DATED 13/03/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )* + ,--. . /0 / DR, ITAT, AHMEDABAD 1 + 23 4 5 / GUARD FILE. BY ORDER / . // . /0