M/S RAMDEV SYNTHETICS PVT LTD., Mumbai V. ACIT 4(3)(1), Mumbai

ITA 2359/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1676 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 12-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AUNTAN H ANSARI
• Keywords: Depreciation; TDS; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH , JM ITA NOS. 2359 & 2360/MUM/2019 (ASSESSMENT YEARS: 2011-12 & 2012-13) M/S. RAMDEV SYNTHETICS PVT. LTD. 20/24, MORARJEE VELJEE BLDG., 1 ST FLOOR, KALBHAT LANE KALBADEVI, MUMBAI-400 001 VS. ACIT 4(3)(1), MUMBAI PAN/GIR NO. AAACR 2001 F ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI GAURAV KABRA RESPONDENT BY : SHRI AUNTAN H. ANSARI DATE OF HEARING : 13.10.2020 DATE OF PRONOUNCEMENT : 11.12.2020 O R D E R PER SHAMIM YAHYA, A. M.: THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-9, MUMBAI (LD. CIT(A) FOR SHORT) WHEREIN LEARNED CIT (A) HAS PARTLY SUSTAINED THE LEVY OF PE NALTY UNDER SECTION 271 (1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT' FOR SHORT) AS UNDER : ASSESSMENT YEAR PENALTY SUSTAINED 2011-12 740822 2012-13 747371 FACTS LEADING TO THE LEVY OF PENALTY ARE IDENTICAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING O FFICER (A.O. FOR SHORT) MADE DISALLOWANCES ON THREE COUNTS AS UNDER: DISALLOWANCE OF DEPRECIATION FOR CAR REGISTERED IN THE NAME OF THE DIRECTOR. DISALLOWANCE OF DEPRECIATION CLAIMED ON HOUSE USED AS RESIDENCE BY THE DIRECTOR. DISALLOWANCE OF INTEREST UNDER SECTION40(A)(IA) FOR NON-DEDUCTION OF TDS. 3. PENALTY WAS ALSO LEVIED ON THE ABOVE HEADS. LEAR NED CIT APPEALS DELETED THE PENALTY ON ACCOUNT OF DEPRECIATION WHICH WAS DISALL OWED AS THE CAR WAS REGISTERED IN THE 2 ITA NOS. 2359 & 2360/MUM/2019 (AYS: 2011-12 & 2012-13) M/S. RAMDEV SYNTHETICS PVT. LTD. VS. ACIT NAME OF THE DIRECTOR. HOWEVER HE SUSTAINED THE LEVY OF PENALTY ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION CLAIMED ON HOUSE USED AS RESIDENCE BY THE DIRECTOR AND ALSO ON ACCOUNT OF DISALLOWANCE OF INTEREST FOR NON-DEDU CTION OF TDS. 4. AGAINST THE ORDER ASSESSEE IS IN APPEAL BEFORE U S. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. AS REGARDS THE PENALTY ON DEPRECIATION WHICH WAS DISALLOWED AS THE HOUSE WAS USED AS RESIDENCE BY THE DIRECTOR, IN OUR CONSIDERED OPINION, THE PENALTY U/S.271(1)(C) I S NOT EXIGIBLE ON THE SAID DISALLOWANCE. THE HOUSE WAS BEING USED AS RESIDENCE BY A DIRECTOR . IT IS NOT THE CASE THAT THE DIRECTOR WAS NOT ENTITLED TO USE THE SAID RESIDENCE AS PER T HE TERMS OF AGREEMENT WITH THE COMPANY. IN THIS VIEW OF THE MATTER, THE VERY DISAL LOWANCE OF DEPRECIATION IS ON A VERY HOLLOW BASIS. IN SUCH CIRCUMSTANCES, IN OUR CONSIDE RED OPINION, NO PENALTY U/S.271(1)(C) CAN BE LEVIED ON SUCH A DISALLOWANCE. MOREOVER WE H OLD THAT THERE IS NO CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ON THIS ISSUE. HENCE, THE ASSESSEE DESERVES TO SUCCEED ON THIS REASONING ALSO . 6. AS REGARDS THE DISALLOWANCE OF INTEREST FOR NON- DEDUCTION OF TDS IS CONCERNED, WE FIND THAT ON THIS ISSUE AGAIN THERE CANNOT BE CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. FURTHERMORE, NON- DEDUCTION OF TDS ITSELF LEADS TO SEPARATE PROCEEDINGS AGAINST THE ASSESSEE. HENCE, V ISITING THE ASSESSEE AGAIN WITH PENALTY U/S.271(1)(C) WILL AMOUNT TO DOUBLE PREJUDICE, WHIC H IS NOT SUSTAINABLE. HENCE, IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT, W E SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE PENALTY. 7. IN THE RESULT, THESE APPEALS BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE BOARD ON 11.12.20 20 SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 11.12.2020 ROSHANI , SR. PS 3 ITA NOS. 2359 & 2360/MUM/2019 (AYS: 2011-12 & 2012-13) M/S. RAMDEV SYNTHETICS PVT. LTD. VS. ACIT COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI