Ahmedabad Steelcraft Limited, Ahmedabad V. The Dy.CIT., (OSD),Range-1, Ahmedabad

ITA 220/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9330 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 22-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Keywords: Depreciation; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NOS: 214 & 220/AHD/2014 (ASSESSMENT YEAR: 2005-06 & 2007-08) AHMEDABAD STEELCRAFT LTD. 401, 4 TH FLOOR, 636 COMPLEX PANCHVATI 2 ND LANE GULBAI TEKRA, AHMEDABAD-380006 V/S THE ACIT (OSD), RANGE-1, AHMEDABAD AND THE DCIT (OSD), RANGE-1, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AACCA3036B APPELLANT BY : SHRI DHIREN SHAH, AR RESPONDENT BY : SHRI ALBINUS TIRKEY, SR. D.R . ( )/ ORDER DATE OF HEARING : 06 -02-201 7 DATE OF PRONOUNCEMENT : 07 -02-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. ITA NOS. 214 & 220/AHD/2014 ARE TWO SEPARATE APPEAL S BY THE ASSESSEE PREFERRED AGAINST TWO SEPARATE ORDERS OF THE LD. CI T(A)-III, AHMEDABAD DATED 29.10.2013 & 27.11.2013 PERTAINING TO A.YS. 2 005-06 & 2007-08. ITA NOS. 214 & 220/AHD/2014 . A.YS. 2005-0 6 & 2007-08 2 2. BOTH THESE APPEALS ARE BASED ON IDENTICAL SET OF FA CTS, THEREFORE, THEY WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 3. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE L EVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 4. THE PENALTY HAS BEEN LEVIED ON THE DISALLOWANCE OF DEPRECIATION, WHICH IS COMMON IN BOTH THE YEARS UNDER CONSIDERATION AND ON DISALLOWANCE ON ACCOUNT OF UNPAID BONUS WHICH IS THEIR ONLY IN A.Y. 2005-06. 5. DURING THE COURSE OF THE RESPECTIVE SCRUTINY ASSESS MENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED DEPRECIA TION ON A MOTOR CAR WHICH WAS REGISTERED IN THE NAME OF EMPLOYEE OF THE COMPANY. THE A.O. ACCORDINGLY DISALLOWED THE CLAIM OF DEPRECIATION HO LDING THAT THE ASSESSEE WAS NOT THE OWNER OF THE MOTOR VEHICLE AND SIMULTAN EOUSLY INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND L EVIED THE PENALTY WHICH WAS CONFIRMED BY THE LD. CIT(A). 6. THERE ARE SEVERAL JUDICIAL DECISIONS WHEREIN SUCH C LAIM OF DEPRECIATION HAS BEEN ALLOWED WHERE THE MOTOR VEHICLE WAS IN THE NAM E OF THE DIRECTOR OF THE COMPANY BUT WAS USED BY THE COMPANY AND HAS BEE N SHOWN IN ITS BLOCK OF ASSETS. IN OUR CONSIDERED OPINION, THIS CANNOT B E CONSIDERED AS A FIT CASE FOR FILING INACCURATE PARTICULARS OF THE INCOME AS THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS IN ITS STATEMENT OF ACCOUNTS . MERELY, BECAUSE THE ITA NOS. 214 & 220/AHD/2014 . A.YS. 2005-0 6 & 2007-08 3 VEHICLE WAS REGISTERED IN THE NAME OF THE EMPLOYEE, THE CLAIM OF DEPRECIATION CANNOT TRIGGER THE PROVISIONS OF SECTI ON 271(1)(C) OF THE ACT. TO THIS EXTENT, WE DO NOT FIND ANY REASON FOR THE L EVY OF PENALTY. 7. THE SECOND LIMB FOR THE LEVY OF PENALTY IS THE DISA LLOWANCE ON ACCOUNT OF UNPAID BONUS. WHILE SCRUTINIZING THE RETURN OF A.Y. 2005-06, THE A.O. NOTICED THAT THE ASSESSEE HAS MADE PAYMENT OF EXGRA TIA, BUT BONUS OF RS. 1,64,520/- ONLY WAS PAID OUT OF RS. 4,38,219/-. TH E A.O. FURTHER NOTICED THAT THE ASSESSEE HAS ITSELF DISALLOWED RS. 1,00,09 0/- AND BALANCES OUGHT TO HAVE BEEN DISALLOWED. THE A.O. DISALLOWED THE SAME AND INITIATED PENALTY PROCEEDINGS AND SUBSEQUENTLY LEVIED THE PENALTY WHI CH WAS CONFIRMED BY THE LD. CIT(A). 8. WE FIND THAT THE ASSESSEE HAS FILED THE RETURN OF I NCOME ON 26.10.2005 WHICH MEANS THAT STATUTORY TIME WAS TILL AVAILABLE FOR THE ASSESSEE TO MAKE THE PAYMENT FOR THE UNPAID BONUS. FOR SOME REASON O R THE OTHER, THE ASSESSEE COULD NOT MAKE THE PAYMENT BUT THE SAME CA NNOT BE CONSIDERED AS FILING OF INACCURATE PARTICULARS IN THE RETURN O F INCOME. THE UNPAID LIABILITY WAS VERY MUCH SHOWN IN THE FINANCIALS OF THE ASSESSEE AND, THEREFORE, THE SAME CANNOT TRIGGER THE PROVISIONS O F SECTION 271(1)(C) OF THE ACT. IN OUR CONSIDERED OPINION, ON THIS COUNT ALSO THE LEVY OF PENALTY IS UNJUSTIFIED. WE, ACCORDINGLY, SET ASIDE THE FINDING S OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALTY SO LEVIED FRO M BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. ITA NOS. 214 & 220/AHD/2014 . A.YS. 2005-0 6 & 2007-08 4 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 07 - 02- 20 17 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 07 /02/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD