DCIT, CHENNAI V. Redington India Ltd., CHENNAI

ITA 2219/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8583 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 07-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Depreciation; Non-deduction of tax; Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.2219/MDS/2015 * +* / ASSESSMENT YEAR : 2006-07 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(1), CHENNAI - 600 034. V. M/S REDINGTON INDIA LTD., SPL GUINDY HOUSE, 95, ANNA SALAI, GUINDY, CHENNAI - 600 032. PAN : AABCR 0347 P (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT /0-. 1 2 / RESPONDENT BY : SH. R. VIJAYARAGHAVAN, ADVOCAT E ' 1 3& / DATE OF HEARING : 28.07.2016 45+ 1 3& / DATE OF PRONOUNCEMENT : 15.09.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 3, CHENN AI, DATED 09.09.2015 AND PERTAINS TO ASSESSMENT YEAR 2006-07, DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.2219/MDS/15 2. SHRI SHIVA SRINIVAS, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED DEPRECIATION AT THE RATE OF 100% ON THE SO-CALLED TEMPORARY STRUCTURES. THE AS SESSING OFFICER, HOWEVER, DISALLOWED THE CLAIM OF THE ASSES SEE. THE ASSESSEE HAS ALSO PAID ROYALTY TO M/S MICROSOFT COR PORATION INC. WITHOUT DEDUCTING TAX. BESIDES, THE ASSESSEE HAS P AID CONSULTANCY CHARGES. THE ASSESSING OFFICER LEVIED PENALTY IN R ESPECT OF THE CLAIM OF DEPRECIATION AND NON-DEDUCTION OF TAX ON T HE GROUND THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF IN COME. HOWEVER, THE CIT(APPEALS) DELETED THE PENALTY ON THE GROUND THAT THIS TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE AS REVEN UE EXPENDITURE IN RESPECT OF TEMPORARY STRUCTURES. WITH REGARD TO PAYMENT MADE TO M/S MICROSOFT CORPORATION INC., ACCORDING TO THE LD . D.R., THE MATTER WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFI CER. ACCORDING TO THE LD. D.R., WHEN THE TEMPORARY STRUCTURE IS NOT E LIGIBLE FOR 100% DEPRECIATION, THE CLAIM OF THE ASSESSEE IS NOT BONA FIDE, THEREFORE, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS. HENCE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) OUGHT N OT TO HAVE DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. 3 I.T.A. NO.2219/MDS/15 3. WE HAVE HEARD SH. R. VIJAYARAGHAVAN, THE LD.COUN SEL FOR THE ASSESSEE ALSO. THE ASSESSEES CLAIM OF 100% DE PRECIATION ON THE TEMPORARY STRUCTURE WAS EXAMINED BY THIS TRIBUN AL IN THE SUBSEQUENT ASSESSMENT YEAR, NAMELY, ASSESSMENT YEAR 2007-08 AND THIS TRIBUNAL FOUND ON IDENTICAL SET OF FACTS T HAT THE EXPENDITURE HAS TO BE ALLOWED AS REVENUE EXPENDITURE. THE ASSE SSEE APPARENTLY TREATED THE EXPENDITURE ON TEMPORARY STR UCTURES AS CAPITAL AND CLAIMED 100% DEPRECIATION. WHETHER A P ARTICULAR EXPENDITURE IS REVENUE IN NATURE OR CAPITAL IN NATU RE WOULD DEPEND UPON THE FACTS OF EACH CASE AND THERE CAN BE DIFFER ENCE OF OPINION DEPENDING UPON THE INDIVIDUAL IS CONCERNED. WHEN T HE ASSESSEE FELT THAT THE EXPENDITURE ON THE TEMPORARY STRUCTUR ES IS CAPITAL IN NATURE AND CLAIMED 100% DEPRECIATION FOR THE YEAR U NDER CONSIDERATION, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT IT CANNOT BE CONSTRUED AS FURNISHING INACCURATE PARTIC ULARS OF INCOME OR CONCEALMENT OF PART OF ITS INCOME. FURTHERMORE, WITH REGARD TO NON-DEDUCTION OF TAX ON THE PAYMENT MADE TO M/S MIS CROSOFT CORPORATION INC., AS RIGHTLY SUBMITTED BY THE LD. D .R., THE MATTER WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFI CER FOR RECONSIDERATION. IN VIEW OF THESE FACTUAL ASPECTS, THIS TRIBUNAL IS OF 4 I.T.A. NO.2219/MDS/15 THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RI GHTLY DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON 15 TH SEPTEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 15 TH SEPTEMBER, 2016. KRI. 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-3, CHENNAI 4. PRINCIPAL CIT, CHENNAI-5, CHENNAI 5. 8; /3 /DR 6. * < /GF.