The ITO, Ward-4(1), Ahmedabad V. GMD Services India Pvt. Ltd., Ahmedabad

ITA 2764/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6309 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANTONY PARIATH
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 2764/AHD/2013 (ASSESSMENT YEAR: 2009-10) THE INCOME-TAX OFFICER, WARD-4(1), AHMEDABAD V/S GMD SERVICES INDIA PVT. LTD. 212 TO 214, PLATINUM PLAZA, JUDGES BUNGLOW ROAD, BODAKDEV, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AACCG5969K APPELLANT BY : SHRI ANTONY PARIATH, SR. D.R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 24 -03-201 7 DATE OF PRONOUNCEMENT : 03-04-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)- VIII, AHMEDABAD DATED 14.08.2013 PERTAINING TO A.Y. 2009-10. ITA NO. 2764 /AHD/2013 . A.Y. 2009-10 2 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE PENALTY OF RS. 10.85 LACS LEVIED U/S. 271(1)(C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 30.09.2011 FRAMED U/S. 143(3) OF THE ACT. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS AND ON VERIFICATION OF THE DETAILS FILED IN RESPECT OF CLA IM OF DEPRECIATION. THE A.O. NOTICED THAT THE ASSESSEE HAD SOLD AN EXISTING OFFI CE BUILDING FOR AN AMOUNT OF RS. 60 LACS, THE WDV OF WHICH WAS RS. 24,46,405/ -. THE A.O. FURTHER NOTICED THAT THE ASSESSEE HAS PURCHASED ANOTHER OFF ICE BUILDING FOR AN AMOUNT OF RS. 52.90 LACS. THE A.O. FOUND THAT AFTER REDUCING THE SALE VALUE OF RS. 60 LACS ON BLOCK OF ASSETS. THE ASSESSEE HAS CLAIMED DEPRECIATION ACCORDINGLY. THE A.O. WAS OF THE OPINION THAT THE O LD PROPERTY WAS NEVER PART OF THE NEW ASSETS PURCHASED DURING THE YEAR ON WHICH DEPRECIATION HAS BEEN CLAIMED. THE A.O. ISSUED A SHOW CAUSE NOTICE T O THE ASSESSEE TO EXPLAIN WHY AN AMOUNT OF RS. 26,47,592/- SHOULD NOT BE TREATED AS PROFIT ON SALE OF ASSETS. 5. THE ASSESSEE CONTENDED THAT THE PROFIT ON SALE OF O FFICE WILL NOT BE INCLUDED IN INCOME AS IT FORMS BLOCK OF ASSETS AS DURING THE YEAR, THE ASSESSEE HAS PURCHASED ONE OFFICE AND DISPOSED THE PREVIOUS OFFI CE FOR RS. 60 LACS. 6. THE A.O. DID NOT ACCEPT THIS SUBMISSION OF THE ASSE SSEE. THE A.O. WAS OF THE FIRM BELIEF THAT NO DEPRECIATION IS ALLOWABLE O N ANY ASSETS WHICH IS SOLD ITA NO. 2764 /AHD/2013 . A.Y. 2009-10 3 DURING THE PREVIOUS YEAR. THE A.O. OPINED THAT THE NEW ASSET PURCHASED BY THE ASSESSEE WAS NEVER PART OF THE ASSETS ALREADY S OLD BY THE ASSESSEE. THEREFORE, THE ASSESSEE WAS NOT ENTITLED TO CLAIM D EPRECIATION ON THE ASSETS SOLD. THE A.O. ACCORDINGLY WORK OUT THE PROF IT U/S. 41(2) OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSES SEE. 7. PENAL PROCEEDINGS WERE SIMULTANEOUSLY INITIATED BY THE A.O. FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE PENAL PROC EEDINGS, THE ASSESSEE REITERATED WHAT HAS BEEN STATED DURING THE COURSE O F THE ASSESSMENT PROCEEDING, THE A.O. WAS NOT CONVINCED AND PROCEEDE D BY LEVYING A PENALTY OF RS. 10.85 LACS. 8. ASSESSEE CARRIED THE MATTER BEFORE THE LD . CIT(A) AND VEHEMENTLY OBJECTED THE LEVY OF PENALTY. IT WAS STRONGLY CONTENDED THAT ASSESSEE WAS UNDER A BONA FIDE BELIEF THAT DEPRECIATION IS ALLOWABLE ON THE BLOCK OF ASSETS. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) WAS OF THE OPINION THAT THERE IS NO FURNISHING INACCURATE PARTICULARS. THE CLAIM OF THE ASSESSEE WAS MADE UNDER A BONA FIDE BELIEF WHICH HAS NOT BEE N ACCEPTED BY THE A.O. THE LD. CIT(A) DIRECTED THE A.O. TO DELETE TH E PENALTY SO LEVIED DRAWING SUPPORT FROM THE DECISION OF THE HONBLE SU PREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158. 9. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. THE LD . D.R. RELIED UPON THE FINDINGS OF THE A.O. ITA NO. 2764 /AHD/2013 . A.Y. 2009-10 4 10. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE; THEREFORE, WE DECIDED TO PROCEED EX PARTE. 11. HAVING HEARD THE CONTENTION OF THE LD. D.R., WE HA VE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE RELEVANT ASSESSMENT ORDER. 12. THERE IS NO DISPUTE THAT DURING THE YEAR, THE ASSES SEE HAS SOLD OLD OFFICE BUILDING AND HAS PURCHASED ANOTHER OFFICE BUILDING. UNDER THE CONCEPT OF BLOCK OF ASSETS, THE ASSESSEE HAS CLAIMED DEPRECIAT ION ON THE BLOC OF ASSETS AS PER THE PROCEDURE GIVEN IN THE RELEVANT PROVISIO NS OF THE ACT. IT APPEARS THAT THE CLAIM OF DEPRECIATION WAS UNDER A BONA FID E BELIEF AND ALL THE DETAILS WERE FURNISHED ALONG WITH THE RETURN OF INC OME. THEREFORE, IN OUR CONSIDERED OPINION, THERE IS NO CASE OF FURNISHING ANY INACCURATE PARTICULARS OF INCOME. RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) I S WELL FOUNDED. WE, THEREFORE, DECLINE TO INTERFERE. 13. APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 03 - 04- 20 17 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 03 /04/2017 RAJESH