Singh Casuals Pvt.ltd., Hyd, Secunderabad V. DCIT, Circle-3(2), Hyderabad, Hyderabad

ITA 217/HYD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6482 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Keywords: Depreciation; Difference of opinion
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 217/HYD/2016 ASSESSMENT YEAR: 2006-07 SINGH CASUALS PVT. LTD., HYDERABAD. PAN AAFCS 1705 G VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 3(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. DEVDAS REVENUE BY : SHRI M. SITARAM DATE OF HEARING 23-05-2016 DATE OF PRONOUNCEMENT 15-06-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER OF CIT(A) - 10, HYDERABAD DATED 12/11/2015 FOR AY 2006-07. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS CARRYING ON THE BUSINESS OF MANUFACTURE OF READYMADE GARMENTS. FOR THE AY 2006-07, ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS. NIL AFTER SET OFF OF BROUGHT FORWARD LOSSES OF RS. 21,3 1,132. AFTER PROCESSING THE RETURN OF INCOME, THE CASE WAS CONVE RTED INTO SCRUTINY. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT WHEREIN THE TOTAL INCOME OF THE ASSESSEE WAS COMPUTED AT RS. 26 ,46,989/- BEFORE SET OFF OF BROUGHT FORWARD LOSSES. 3. DURING THE AY 2006-07, THE ASSESSEE MADE AN ADDI TION TO THE FIXED ASSETS. DURING THE COURSE OF ASSESSMENT, ASSE SSEE WAS ASKED 2 ITA NO. 217 /HYD/2016 SINGH CASUALS P. LTD. TO PRODUCE BILLS/VOUCHERS IN SUPPORT OF ITS CLAIM O F PURCHASE OF ASSETS. IN SPITE OF SEVERAL OPPORTUNITIES, ASSESSEE FAILED TO PRODUCE THE ABOVE SAID BILLS BEFORE THE AO IN RESPECT OF THE FO LLOWING ASSETS: 1. BOILER RS. 4,46,000/- 2. OTHER PLANT & MACHINERY RS. 45,560/- 3. SEWING MACHINES RS. 3,26,396/- 4. ELECTRICAL FITTINGS RS.32,60,196/- AS THE ASSESSEE COULD NOT PRODUCE THE BILLS FOR THE ABOVE SAID ITEMS, DEPRECIATION CLAIM ON THE ABOVE SAID ASSETS TO THE EXTENT OF RS. 2,24,357/- WAS DISALLOWED AND ADDED TO THE INCOME R ETURNED. 4. SINCE THE ASSESSEE HAS NOT FILED RELEVANT BILLS FOR THE ASSETS, AO TREATED THE SAME AS FURNISHING OF INACCURATE PAR TICULARS OF INCOME AND ACCORDINGLY PROCEEDINGS U/S 271(1)(C) OF THE AC T WERE INITIATED. 5. IN RESPONSE TO THE NOTICE ISSUED TO THE ASSESSEE , THE ASSESSEE FILED ITS OBJECTIONS FOR INITIATION OF PROCEEDINGS U/S 271(1)(C). THE ASSESSEE CONTENDED THAT IT IS ONLY THE AOS VIEW TH AT EVIDENCE PRODUCED IN THE FORM OF VOUCHERS WAS NOT UP TO THE DESIRED LEVEL, FOR WHICH AO REBUTTED BY EXPLAINING THAT THE ASSESSEE W AS GIVEN ENOUGH OPPORTUNITY TO PRODUCE THE BILLS AND THE ASSESSEE F AILED TO DO SO. THE ASSESSEE ALSO CONTENDED THAT PURCHASE OF ASSETS WAS EVIDENCED BY DEBITS TO THE ASSETS ACCOUNT, FOR WHICH AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT MERE ENTRY IN THE B OOKS OF ACCOUNT DOES NOT PROVE THE EXISTENCE OF ASSETS. FINALLY, AS SESSEE ALSO CONTENDED THAT THERE IS A DIFFERENCE OF OPINION WIT H REGARD TO THE NATURE OF EVIDENCE ACCEPTED BY THE REVENUE IN THE D ENIAL OF DEPRECIATION, FOR WHICH AO DID NOT ACCEPT THE VIEW OF THE ASSESSEE THAT THERE WAS LACK OF EVIDENCE AND THERE IS NO QUE STION OF DIFFERENCE OF OPINION IN THE NATURE OF EVIDENCE. 6. AFTER REJECTING THE SUBMISSIONS OF THE ASSESSEE, THE AO LEVIED THE PENALTY OF RS. 80,000/- U/S 271(1)(C) OF THE AC T. 3 ITA NO. 217 /HYD/2016 SINGH CASUALS P. LTD. 7. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), IT WAS BROUGH T TO THE NOTICE BY AR OF THE ASSESSEE THAT PETITION U/S 154 WAS FILED ON 06/02/2010 THAT MUCH AFTER THE ORDER U/S 271(1)(C) WAS PASSED BY TH E AO. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CONFIR MED THE PENALTY LEVIED BY THE AO U/S 271(1)(C). 8. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE IS IN A PPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF LD. CIT (A) IS ERRONEOUS IN LAW AS WELL AS IN THE FACTS AND CIRCUMSTANCE OF THE CASE. 2. THE LD. CIT(A) ERRED IN UPHOLDING THE ORDER PASS ED BY THE AO IN LEVYING PENALTY OF RS .80,000 VIS 271(1)(C) OF T HE I.T. ACT 1961 ON THE CHARGE OF CONCEALMENT OF INCOME AND FURNISHI NG OF INACCURATE PARTICULARS, NEITHER OF WHICH IS APPLICA BLE TO THE FACTS OF THE CASE. 3. THE LD. CIT(A) FAILED TO NOTE THAT THE APPELLANT HAD MADE FULL DISCLOSURE OF THE CLAIM FOR DEPRECIATION AND THUS T HERE WAS NO CONCEALMENT OF INCOME. 4. THE LD. CIT (A) FAILED TO CONSIDER THE APPLICATI ON MADE U/S 154 OF THE I.T. ACT, 1961, WHICH WAS NOT YET DISPOS ED, SUBMITTING ALL THE INVOICES NECESSARY TO CORROBORATE THE ADDIT IONS MADE TO FIXED ASSETS AND THUS EVIDENCING THAT THE APPELLANT HAD NEITHER FURNISHED INACCURATE PARTICULARS OF INCOME NOR CONC EALED ANY INCOME. 9. LD. AR OF THE ASSESSEE SUBMITTED BEFORE US THAT THERE IS NO DENIAL THAT ASSESSEE COULD NOT FILE BILLS/VOUCHERS RELATING TO THE PURCHASE OF FIXED ASSETS BEFORE THE AO. HOWEVER, HE SUBMITTED THAT ASSESSEE HAS FILED A PETITION U/S 154 BEFORE THE AO WITH SUPPORTING VOUCHERS/BILLS IN SUPPORT OF THE PURCHASE OF THE AB OVE FIXED ASSETS. HE SUBMITTED THAT ASSESSEE HAS NOT RECEIVED ANY COM MUNICATION RELATING TO THE PETITION FILED U/S 154. AS PER THE PROVISIONS OF SECTION 154(8), AO SHOULD HAVE PASSED AN ORDER WITHIN A PER IOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION IS RECEIVED BY HIM. LD. AR SUBMITTED THAT ALL THE BILLS RELEVANT FOR TH E ADDITION OF FIXED ASSETS WERE ALREADY SUBMITTED BEFORE THE AO ALONG W ITH THE PETITION 4 ITA NO. 217 /HYD/2016 SINGH CASUALS P. LTD. U/S 154, THEREFORE, THERE IS NO CONCEALMENT OF INCO ME UNDER THE PROVISIONS OF THE ACT. LD. AR SUBMITTED THAT IN SUB SEQUENT AYS, DEPRECIATION CLAIM OF THE ASSESSEE WAS ACCEPTED BY THE AO AND TO THIS EFFECT, RELEVANT ASSESSMENT ORDERS PASSED BY T HE AO U/S 143(1) HAVE BEEN PLACED ON RECORD. 10. LD. DR RELIED ON THE ORDERS OF REVENUE AUTHORIT IES. 11. CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL FACTS ON RECORD. THE ADMITTED FACT IS THAT THE ASSESSEE HAS NOT FILED EVIDENCE FOR PURCHASE OF FIXED ASSETS BEF ORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO BEFOR E THE CIT(A). HOWEVER, ASSESSEE HAS FILED A PETITION U/S 154 ALON G WITH THE EVIDENCE TO SUPPORT THE PURCHASE OF FIXED ASSETS MU CH AFTER LEVY OF PENALTY U/S 271(1)(C). IT WAS BROUGHT TO OUR NOTIC E THAT ASSESSEE HAS NOT RECEIVED ANY COMMUNICATION WITH REGARD TO THE N OTICE FILED U/S 154, EVEN THOUGH, THE AO MUST HAVE DISPOSED OF THIS PETITION WITHIN 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE PETIT ION WAS FILED BY THE ASSESSEE. HOWEVER, IT WAS ALSO BROUGHT TO OUR N OTICE THAT IN THE SUBSEQUENT AYS, DEPRECIATION CLAIM OF THE ASSESSEE WAS ACCEPTED BY THE AO IN AYS 2007-08 AND 2008-09. CONSIDERING THE ABOVE FACTS, WE ARE OF THE VIEW THAT ON THE RECORD SUBMITTED BY THE ASSESSEE, RELEVANT SUPPORTING BILLS/VOUCHERS WERE ALREADY SUBMITTED BE FORE THE AO AND WHICH WERE NOT DULY ACKNOWLEDGED BY THE AO BY PASSI NG ORDER U/S 154 OF THE ACT. HOWEVER, IT WAS NOT CLEAR WHETHER T HE BILLS/VOUCHERS SUBMITTED BY THE ASSESSEE ARE IN ORDER. THEREFORE, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT AND PROPER TO REMIT THE MAT TER BACK TO THE FILE OF THE AO TO DISPOSE OF THE PETITION U/S 154 AND ALSO DETERMINE THE CORRECTNESS OF CLAIM OF THE ASSESSEE. IN CASE THE C LAIM OF THE ASSESSEE IS FOUND TO BE CORRECT, THE PENALTY LEVIED U/S 271(1)(C) MAY BE DROPPED. 5 ITA NO. 217 /HYD/2016 SINGH CASUALS P. LTD. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE, 2016. SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHMAN) VICE PRESIDENT AC COUNTANT MEMBER HYDERABAD, DATED: 15 TH JUNE, 2016 KV COPY TO:- 1) M/S SINGH CASUALS PVT. LTD., C/O SEKHAR & CO., 133/4, RP ROAD, SECUNDERABAD 500 003. 2) DCIT, CIRCLE 3(2), HYDERABAD. 3) CIT(A) 10, HYDERABAD 4) CIT (IT & TP), HYD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.