Appeal Details
Counselvise Citation
[2014] 120 COUNSELVISE.COM (IT) 6919 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 4 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-12-2014
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
09-12-2014
Assessment Year
2002-2003
Appeal Filed On
28-07-2010
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ITA NO . 2420 / AHD/ 201 0 [ [ / ASSESSMENT YEAR : 20 0 2 - 0 3 ACIT, CIRCLE - 8, AHMEDABAD VS TORRENT POWER SEC LTD., (NOW MERGED WITH TORRENT POWER) TORRENT HOUSE, NR. DINESH HALL, ASHRAM ROAD, AHMEDABAD PAN : AAACT 8629 D / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI B. KULSHRESTHA, SR. DR. ASSESSEE(S) BY : SHRI VIJAY RANJAN, AR / DATE OF HEARING : 09 / 12 /2014 / DATE OF PRONOUNCEMENT: 19 /1 2 /2014 / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - X I V , AHMEDABAD DATED 12 . 0 4 .20 10 PASSED IN THE ASSESSMENT YEAR 20 0 2 - 0 3 . 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE READS AS UNDER: - THE LD. COMMISSIONER OF INCOME - TAX (A) - XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.26,70,750/ - LEVIED U/S 271(1)(C). ITA NO. 2420/AHD/2010 TORRENT POWER SEC LTD FOR AY 2002 - 03 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED DEPRECIATION @ 25% ON PREMIUM PAI D OF RS.2,39,39,500/ - FOR LEASE HOLD LAND AS COMMERCIAL RIGHTS FOR ACQUIRING 10357 SQ. MTR . OF LAND AT BHATTAR ROAD, SURAT FROM THE SURAT MUNICIPAL CORPORATION FOR 99 YEARS TO ESTABLISH ITS RECEIVING CENTRE. THE PREMIUM PAID WAS CONSIDERED AS INTANGIBLE ASSET HAVING ENDURING BENEFIT. THE ASSESSEE MADE AN ALTERNATIVE CLAIM TO ALLOW THE ENTIRE P REMIUM AS REVENUE EXPENDITURE. THE TRIBUNAL CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND DISALLOWED THE ASSESSEES CLAIM. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) OF THE ACT FOR RS.26,70,750/ - BEING 125% OF THE TAX SOUGHT TO BE EVAD ED FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND THEREBY CONCEALING ITS INCOME. 4. ON APPEAL, THE CIT(A) DELETED THE PENALTY. THE CIT(A) OBSERVED THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT V. SUN PHARMACEUTICALS IND. LTD., [2009] 227 CTR 206 (GUJ.) ON THE IDENTICAL FACTS AND CIRCUMSTANCES ALLOWED THE ENTIRE PREMIUM PAID AS REVENUE EXPENDITURE. I N THE SAME CASE, THE TRIBUNAL VIDE ITS ORDER DATED 17.02.1999 ALLOWED THE ASSESSEES APPEAL , I.E. ENTIRE PREMIUM PAID IS A REVENUE EXPENDITURE , WHICH WAS UPHELD BY THE HONBLE GUJARAT HIGH COURT. THE CIT(A) ALSO OBSERVED THAT IN THE CASE OF THE ASSESSEE THIS CASE LAW WAS NOT CITED BEFORE THE TRIBUNAL THOUGH IT WAS AVAILABLE. FURTHER, THE CIT(A) OBSERVED THAT THE INITIAL CLAIM OF THE ASSESSEE WAS OF DEPRECIATION ON SUCH PREMIUM AND NOT FOR ENTIRE CLAIM AS REVENUE EXPENDITURE. THEREFORE, THE CIT(A) HELD THAT HE WAS INCLINED TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT THERE WERE MORE THAN ONE INTERPRETATION OR VIEWS ON THE CLAIM OF THE ASSESSEE ON THE ISSUE OF DEPRECIATION OR ALTERNATIVELY ENTIRE CLAIM AS REVENUE EXPENDITURE FOR THE PREMIUM PAID BY IT FOR ACQUIRING 99 YEARS OF LEASE OF LAND. THEREFORE, THE IMPOSITION OF PENALTY WAS UNWARRANTED. HE PLACED RELIANCE ON THE ITA NO. 2420/AHD/2010 TORRENT POWER SEC LTD FOR AY 2002 - 03 3 DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF CIT V. RELIANCE PETRO PRODUCTS PVT LTD [2010] 322 ITR 158 AND OBSERVED THAT THE HONBLE SUPREME COURT HELD THAT NO INFORMATION GIVEN IN RETURN OF INCOME FOUND TO BE INCORRECT MAKING INCORRECT CLAIM DOES NOT AMOUNT TO CONCEALMEN T OF PARTICULARS. HE, THEREFORE, HELD THAT RESPECTFULLY FOLLOWING THE HONBLE SUPREME COURT, THE SATISFACTION SO DERIVED AND PENALTY SO IMPOSED BY THE ASSESSING OFFICER IS HELD TO BE UNJUSTIFIABLE AND NOT MAINTAINABLE IN THE EYES OF LAW ON MERIT AND ALLOW ED THE APPEAL OF THE ASSESSEE. 5. THE DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE ASSESSING OFFICER, WHEREAS THE AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF THE CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED DEPRECIATION @ 25% ON PREMIUM OF RS.2,39,39,000/ - PAID FOR ACQUIRING 99 YEARS LEASE OF LAND MEASURING 10357 SQ. MTR. AT BHATTAR ROAD, SUR AT FROM THE SURAT MUNICIPAL CORPORATION FOR 99 YEARS TO ESTABLISH ITS RECEIVING CENTRE. THE ASSESSEE CONSIDERED THE LEASEHOLD RIGHTS AS INTANGIBLE ASSETS HAVING ENDURING BENEFIT AND THEREFORE, CLAIMED DEPRECIATION ON THE AMOUNT PAID FOR ACQUIRING THE LEASE HOLD RIGHT ON THE LAND. THE SAME WAS DISALLOWED BY THE ASSESSING OFFICER AND WAS CONFIRMED IN APPEAL BY THE TRIBUNAL . THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME & CONCEALMENT OF INCOME AN D LEVIED PENALTY @ 125% OF TAX SOUGHT TO BE EVADED, AMOUNTING TO RS.26,70,750/ - . THE SAME WAS DELETED BY THE CIT(A) ON THE GROUND THAT ON IDENTICAL FACTS THIS BENCH OF THE TRIBUNAL IN THE CASE OF SUN PHARMACEUTICALS INDUSTRIES L IMITED VIDE ORDER DATED 17. 02.1999 HAS ITA NO. 2420/AHD/2010 TORRENT POWER SEC LTD FOR AY 2002 - 03 4 HELD THAT THE ENTIRE PREMIUM PAID WAS REVENUE EXPENDITURE AND ALLOWABLE DEDUCTION TO THE ASSESSEE IN THE YEAR OF INCURRING THE EXPENDITURE WHICH WAS CONFIRMED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT V. SUN PHARMACEUTICAL INDUSTRIE S LTD (SUPRA). THEREFORE, THE CIT(A) HELD THAT NO PENALTY WAS LEVIABLE ON AN ISSUE WHICH WAS HIGHLY DEBATABLE. FURTHER, THE CIT(A) ALSO OBSERVED THAT NO INFORMATION FILED IN THE RETURN OF INCOME WAS FOUND BY THE ASSESSING OFFICER TO BE INCORRECT OR FALSE. ON THE BASIS OF THE INFORMATION PROVIDED BY THE ASSESSEE IN THE RETURN OF INCOME , THE ASSESSING OFFICER DISALLOWED THE CLAIM FOR DEPRECIATION ON PREMIUM PAID FOR ACQUIRING 99 YEARS OF LEASE OF LAND. THEREFORE, HE FOUND THAT NO PENALTY WAS LEVIABLE IN THE INSTANT CASE OF THE ASSESSEE. HE PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V. RELIANCE PETRO PRODUCTS PVT LTD (SUPRA), WHEREIN IT WAS HELD THAT WHERE NO INFORMATION GIVEN IN RETURN OF INCOME WAS FOUND TO BE INCORRECT, MAKING AN INCORRECT CLAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME. THE DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY ERROR IN THE ABOVE FINDINGS OF THE CIT(A), HENCE, WE DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH TH E ORDER OF THE CIT(A) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE CO URT ON F R I D A Y , THE 1 9 T H OF DECEMBER , 2014 AT AHMEDABAD. SD/ - SD/ - (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 1 9 /1 2 /2014 BIJU T., PS ITA NO. 2420/AHD/2010 TORRENT POWER SEC LTD FOR AY 2002 - 03 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - XIV, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD
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