The DCIT, Circle-6, Ahmedabad V. The Green Environment Services Co.Op.Society Ltd., Ahmedabad

ITA 2318/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5895 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 12-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Initiation of penalty proceedings; Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.2318/AHD/2014 ( / ASSESSMENT YEAR : 2008-09) THE DCIT CIRCLE-6 AHMEDABAD / VS. THE GREEN ENVIRONMENT SERVICES CO-OP.SOC.LTD. PLOT NO.244-251, PHASE-II, VATVA GIDC AHMEDABAD $ ./ ./ PAN/GIR NO. : AAAAT 1191 N ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : MR.PRASOON KABRA, SR.DR ($'*) / RESPONDENT BY : MS.URVASHI SHODHAN, AR +,*- / DATE OF HEARING 08/05/2017 ./0*- / DATE OF PRONOUNCEMENT 17/ 05/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE REVENUE IS IN APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XI, AHMEDABAD [CIT(A) IN SHORT] DATED 15/05/2014 FOR THE ASSESSMENT YEAR (AY) 2008-09 WHEREIN PENA LTY OF RS.13,74,435/- MADE UNDER S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') IMPOSED BY T HE AO HAS BEEN DELETED. ITA NO. 2318/AH D/2014 DCIT VS. THE GREEN ENVIRONMENT SERVICES CO-OP.SOC .LTD. ASST.YEAR 2008-09 - 2 - 2. THE LD.AR AT THE OUTSET SUBMITTED THAT THE ASS ESSING OFFICER (AO) HAD IMPOSED PENALTY ON ACCOUNT OF FOLLOWING AD DITIONS MADE TO THE INCOME:- (I) PROPORTIONATE COST OF LAND VALUE IN SWT (SOLID WASTE TANK) CLAIMED AS REVENUE EXPENDITURE RS. 5,63,983/- (II) TO EXCESS CLAIM OF DEPRECIATION RS. 43,17,124/- 2.1. WITH REFERENCE TO FIRST ISSUE, THE LD.AR FOR T HE ASSESSEE SUBMITTED THAT PENALTY ON SIMILAR DISALLOWANCE OF COST OF LA ND VALUE FOR SWT HAS BEEN DELETED BY THE CO-ORDINATE BENCH IN ASSESSEE S OWN CASE IN ITA NOS.122/AHD/2014 & ORS. FOR AY 2005-06 & ORS., ORDE R DATED 31/08/2016. 2.2. AS REGARDS SECOND ISSUE, THE LD.AR SUBMITTED T HAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE QUANTUM PROCEEDINGS HA S SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR DE NOVO CONSIDERATION IN ITA NO.3332/AHD/2010 & ORS. FOR AY 2008-09, ORDER DATED 23/5/2014 AND TH EREFORE PENALTY UNDER S.271(1)(C) DOES NOT SURVIVE ON THIS ISSUE. 3. ON CONSIDERATION OF THE ORDERS OF THE AUTHORITIE S BELOW AND THE DECISION OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE, WE FIND THAT THE FIRST ISSUE IS COVERED IN FAVOUR OF ASSESSEE IN ITA NO.122/AHD/2014(SUPRA), WHEREIN THE PENALTY FOR SIM ILAR DISALLOWANCE ON COST OF LAND VALUE HAS BEEN DELETED. NO CASE HA S BEEN MADE OUT BY ITA NO. 2318/AH D/2014 DCIT VS. THE GREEN ENVIRONMENT SERVICES CO-OP.SOC .LTD. ASST.YEAR 2008-09 - 3 - REVENUE TO DISTURB THE FINDINGS OF CO-ORDINATE BENC H. WE THUS SEE NO REASON TO TAKE ANY DIFFERENT VIEW OF THE MATTER. P ENALTY UNDER S.271(1)(C) OF THE ACT ON SWT CLAIM IS THUS DIRECTED TO BE DELE TED. 4. AS REGARDS SECOND ISSUE CONCERNING THE EXCESS CL AIM OF DEPRECIATION, WE NOTE THAT THE QUANTUM PROCEEDINGS HAVE BEEN SET ASIDE TO THE FILE OF THE AO FOR THE AY 2008-09 IN APPEAL. CONSEQUENTLY, SINCE THE ADDITION HAS BEEN SET ASIDE AND RESTORED TO THE FILE OF AO THE BASIS OF IMPOSITION OF PENALTY DOES NOT SURVIVE ANY MORE. 4.1. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMST ANCES OF THE CASE, WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN BUT WHICH SHALL NOT EXCEED T HREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDENT UPON THE ADDITIONS MADE TO THE INCOME OF THE ASSESSEE. UPTO AND UNTIL THE ISSUE R EGARDING DETERMINATION OF THE TAXABLE INCOME IS FINALIZED, PENALTY UNDER S ECTION 271(1)(C) OF THE ACT CANNOT BE IMPRESSED UPON THE ASSESSEE. THE DET ERMINATION OF TAXABLE INCOME OF THE ASSESSEE IS PRESENTLY SUBJUDICED BEFO RE THE AO OWING TO THE ORDER OF THE ITAT IN QUANTUM PROCEEDINGS. AFTE R ADJUDICATION THE ITA NO. 2318/AH D/2014 DCIT VS. THE GREEN ENVIRONMENT SERVICES CO-OP.SOC .LTD. ASST.YEAR 2008-09 - 4 - ISSUE OF QUANTUM ON MERIT, IT WILL BE IN THE DISCRE TION OF THE AO TO CONSIDER INITIATION OF PENALTY PROCEEDINGS ON THIS ISSUE AGAINST THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW. 4.2. IN VIEW OF THE ABOVE, WE DISMISS THE APPEAL O F THE REVENUE ON THE ISSUE AND THE ORDER OF THE CIT(A) IS UPHELD. 5. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . THIS ORDER PRONOUNCED IN OPEN COURT ON 17/ 05/2017 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 17/ 05 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-XI, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD