M/s. Ramin Developers Pvt.Ltd., Baroda V. The ACIT.,Circle-4, Baroda

ITA 2742/AHD/2012

• Counselvise Citation: 274220514 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-12-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 06-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: PARIN SHAH
• Keywords: Depreciation; Difference of opinion

Judgement Text

, , , , SMC, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, SMC BENCH . .. . . .. . , ! ! ! ! BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT ITA NO.2742/AHD/2012 [ASSTT.YEAR : 2003-2004] M/S.RAMIN DEVELOPERS P. LTD. 2 ND FLOOR, PRESTIGE COMPLEX OPP: BANK OF INDIA RACE COURSE CIRCLE, BARODA 390 007. PAN : AABCR 6650 H /VS. ACIT, CIR.4 BARODA. ( (( (#$ #$ #$ #$ / APPELLANT) ( (( (%&#$ %&#$ %&#$ %&#$ / RESPONDENT) '() * + !/ ASSESSEE BY : SHRI PARIN SHAH -. * + !/ REVENUE BY : SHRI D.K. MISHRA, SR.DR ./ * )01/ DATE OF HEARING : 19 TH DECEMBER, 2013 234 * )01/ DATE OF PRONOUNCEMENT : 03-02-2014 !5 / O R D E R THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-04 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-III, BAROD A DATED 20.09.2012. 2. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1. THE LD.CIT(A) ERRED IN HOLDING THAT THE EXPLANA TION FURNISHED BY THE APPELLANT COMPANY DURING THE COURS E OF APPELLATE PROCEEDINGS AND PENALTY PROCEEDINGS ARE NOT BONA FI DE. 2. THE LD.CIT(A) ERRED IN HOLDING THAT THE APPELLAN T COMPANY HAD CLAIMED EXPENSES IN ORDER TO REDUCE THE TAXABLE INCOME AND EVADE DUE TAXES EVEN IN CASE WHERE RETURN OF INCOME FILED BY THE APPELLANT WAS LOSS RETURN. ITA NO.2742/AHD/2012 3. THE LD.CIT(A) ERRED IN CONFIRMING THE PENALTY LE VIED BY THE AO AMOUNTING TO RS.1,02,123/- 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO ` 1,02,123/- WAS IMPOSED ON THE ASSESSEE. HE SUBMITTED THAT THE PENALTY WAS IMPOSED ON ACCOUNT OF DISALLOWANCE OF CERTAIN ADMINISTRATIVE EXPENSES AMOUNTING TO ` 1,23,309/- AND DEPRECIATION OF ` 1,54,577/-. HE SUBMITTED THAT THE ONLY REASON FOR DISALLOWANCE OF EXPENSES AND DEPRECIATIO N WAS THAT THE AO NOTED THAT THE ASSESSEE HAS NOT CONDUCTED ANY BUSIN ESS DURING THE YEAR NOR THE ASSETS ON WHICH THE DEPRECIATION CLAIMED WE RE PUT TO USE. HE SUBMITTED THAT THE ASSESSEE IS VERY MUCH IN THE BUS INESS OF REAL ESTATE DURING THE PRECEDING AS WELL AS SUBSEQUENT YEARS AN D DURING THE RELEVANT YEAR ALSO THE ASSESSEE HAS MADE INVESTMENT IN THE P LOT DULY SHOWN IN SCHEDULE-4 OF ITS STATEMENT OF ACCOUNTS FILED ALONG WITH RETURN OF INCOME. HE SUBMITTED THAT MERELY BECAUSE THE ASSESSEE HAS N OT TAKEN THE ISSUE BEFORE THE TRIBUNAL IN THE QUANTUM CASE OF THE ASSE SSEE, IT CANNOT BE SAID THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. HE RELIED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS P. LTD., 322 ITR 158 . THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE ASSESSEE. HE SUBMITTED THAT THE DECISION OF THE HO NBLE APEX COURT IN CIT VS. RELIANCE PETROPRODUCT P. LTD. (SUPRA) HAS B EEN DISCUSSED AND DISTINGUISHED BY THE CIT(A) IN HIS APPELLATE ORDER. HE SUBMITTED THAT THE ASSESSEE HAS CONDUCTED NO BUSINESS DURING THE YEAR AND ONLY SOME INVESTMENT IN LAND WAS MADE DURING THE YEAR, AND TH EREFORE, THE DISALLOWANCE WERE RIGHTLY MADE BY THE CIT(A) AND PE NALTY WAS ALSO LEVIED ON THE ASSESSEE. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). I FIND THAT THE ADMINISTRATIVE EXPENSES AND ITA NO.2742/AHD/2012 DEPRECIATION ON ASSETS WERE DISALLOWED BY THE AO ON THE ONLY GROUND THAT THE ASSESSEE HAS NOT CONDUCTED ANY BUSINESS DURING THE YEAR NOR THE ASSETS ON WHICH THE DEPRECIATION CLAIMED WERE PUT TO USE. THE ASSESSEE WAS ABLE TO SHOW THAT IT WAS VERY MUCH IN BUSINESS DURI NG THE PRECEDING AS WELL AS SUBSEQUENT YEARS AND WAS IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF RESIDENTIAL HOUSING UNITS. DURING THE RELEVANT YEAR ALSO THE ASSESSEE HAS MADE INVESTMENT IN PLOT OF LAND, W HICH IS SHOWN IN SCHEDULE-4 OF ITS STATEMENT OF ACCOUNT FILED ALONG WITH RETURN OF INCOME. THESE FACTS COULD NOT BE CONTROVERTED ON BEHALF OF THE REVENUE. I FIND THAT ASSESSEES BELIEF WAS MERELY BECAUSE THERE WAS A TEMPORARY LULL IN THE BUSINESS DURING THE RELEVANT YEAR, IT CANNOT BE SAID THAT THE ASSESSEE HAS STOPPED ITS BUSINESS, AND THEREFORE, NOT ENTITL ED TO THE DEDUCTION OF EXPENSES ETC. IN ANY CASE, ALL THE MATERIAL FACTS WERE DISCLOSED BY THE ASSESSEE AT THE TIME OF ITS ASSESSMENT AT THE LEVEL OF AO ITSELF. MERELY BECAUSE THERE WAS HONEST DIFFERENCE OF OPINION BETW EEN THE ASSESSEE AND THE REVENUE REGARDING ADMISSIBILITY OF CERTAIN EXPE NSES AND DEPRECIATION CLAIMED BY THE ASSESSEE, IT CANNOT BE SAID THAT THE ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTI CULARS OF INCOME. THE DECISION OF THE HONBLE APEX COURT IN CIT VS. RELIA NCE PETROPRODUCTS P. LTD. (SUPRA) APPLIES TO THE FACTS OF THE CASE OF TH E ASSESSEE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THA T IT WAS NOT A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, WHICH IS ACCORDINGLY CANCELLED AND THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- ( . .. . . .. . /G.C. GUPTA) /VICE-PRESIDENT