Shri Anand Jain , Bhilwara V. ITO,Ward-4, Bhilwara

ITA 295/JODH/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6302 (ITAT-JODHPUR)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 08-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI A K DAS
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH (SMC), JODHPUR BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 295/JODH/2018 (ASSESSMENT YEAR-2008-09 SHRI ANAND JAIN, E-151, ANAND SPINNERS, RIICO PHASE I & II, RIICO INDUSTRIAL AREA, BHILWARA VS THE INCOME TAX OFFICER, WARD-4, BHILWARA (APPELLANT) (RESPONDENT) PAN: AAZPJ3120D ASSESSEE BY SHRI HEMANT CHHAJED (CA) REVENUE BY SHRI SHRI A. K. DAS (JCIT) DR DATE OF HEARING 17/07/2018 DATE OF PRONOUNCEMENT 19/07/2018 O R D E R PER: R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), AJMER DATED 16/04/2018 FOR THE A.Y. 200 8-09 IN THE MATTER OF IMPOSITION OF PENALTY U/S 271(1)(C) OF TH E INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT, FO R SHORT]. THE GROUNDS RAISED BY THE ASSESSEE IN APPEAL ARE REPROD UCED AS UNDER: 1. THE IMPUGNED PENALTY OF RS. 46,200 MADE IN THE AO ORDER U/S 271(1)(C) AND CONFIRMED BY CIT IN HIS ORDER DATED 16.04.2018 FOR THE ALLEGED DEPRECIATION CLAIMS OF RS. 74,603 I.E. 10% OF RS. 7 ,46,025 FROM FACTORY BUILDING BUYING COST OF RS. 23,59,842/- WHICH INCLU DES NOTIONAL PRICE OF 2 ITA 295/JODH/2018 SHRI ANAND JAIN, BHILWARA VS. ITO THE LAND AT RS. 7,46,025/-, IS BAD IN LAW AND ON FA CTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME KINDLY BE DELETED. 2. THE IMPUGNED PENALTY DOES NOT ATTRIBUTE TO FURNI SHING INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. MA KING OF CLAIMS WHICH IS NOT SUSTAINABLE IN LAW WOULD NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. 3. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO A DD, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE TH E DATE OF HEARING. 2. IN THIS APPEAL, ASSESSEE IS AGGRIEVED FOR LEAVIN G PENALTY IN RESPECT OF CLAIM OF DEPRECIATION ON FACTORY LAND AN D BUILDING. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. THE FACTS IN BRIEF ARE THAT THE DURING THE YEAR UNDER C ONSIDERATION, THE ASSESSEE HAS PURCHASED LAND & BUILDING. IN RETU RN OF INCOME HE CLAIMED DEPRECIATION ON ENTIRE VALUE OF SUCH LAN D AND BUILDING. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER DISALLOWED PROPORTIONATE CLAIM OF DEPRECIATION BY ESTIMATING THE VALUE OF LAND COMPRISING IN THE S ALE DEED. WITH RESPECT TO THE DISALLOWANCE OF DEPRECIATIONS, THE ASSESSING OFFICER ALSO LEVIED PENALTY U/S 271(1)(C) OF THE IN COME-TAX ACT. 4. BY THE IMPUGNED ORDER, THE LD CIT(A) HAS CONFIRM ED THE ACTION OF THE ASSESSING OFFICER AGAINST THE ASSESSE E IS IN FURTHER APPEAL BEFORE ME. 3 ITA 295/JODH/2018 SHRI ANAND JAIN, BHILWARA VS. ITO 5. I HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM T HE RECORD, I FOUND THAT THE ASSESSEE HAS PURCHASED FACTORY BUILD ING. THE ASSESSEE CLAIMED DEPRECIATION ON THE VALUE SO PAID FOR ACQUIRING FACTORY BUILDING. HOWEVER, IN THE PURCHASE DEED, TH ERE WAS NO BIFURCATION ANY AMOUNT ATTRIBUTABLE TO LAND AND BUI LDING. THERE WAS A COMPOSITE AMOUNT OF THE PROPERTY SO ACQUIRED BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER ESTIMATED VALUE OF THE LAND AND OBSERVED THAT ASSESSEE IS NOT ELIGIBLE FOR CLAIM OF DEPRECIATION ON THE AMOUNT ATTRIBUTABLE TO THE COST OF SUCH LAND. ACCORDINGLY, HE DECLINED PROPORTIONATE CLAIM OF DEPRECIATION AND ALSO LEVIED PENALTY U/S 271(1)(C) OF THE I.T. ACT. I FOUND THAT THERE WAS FULL DISCLOSURE OF FACT S IN THE RETURN OF INCOME. IT IS NOT THE CASE OF THE ASSESSING OFFI CER THAT THE ASSESSEE HAS PAID SEPARATE AMOUNT FOR THE LAND AND BUILDING NOR ANY AMOUNT WAS STATED IN THE PURCHASE DEED AS ATTRI BUTABLE TO THE LAND. THERE WAS A COMPOSITE AMOUNT FOR PURCHASE OF FACTORY LAND AND BUILDING. THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROL PRODUCTS 322 ITR 158 BY ORDER DATED 23 RD MARCH, 2010 HELD THAT MERE DECLINE OF CLAIM OF ASSESSEE WI LL NOT LEAD TO 4 ITA 295/JODH/2018 SHRI ANAND JAIN, BHILWARA VS. ITO LEVY OF PENALTY U/S 271(1)(C). IT WAS PRECISELY OBS ERVED BY THE HONBLE SUPREME COURT THAT BY NO STRETCH OF IMAGINA TION CAN THE MAKING OF AN INCORRECT CLAIM IN LAW TANTAMOUNT TO F URNISHING INACCURATE PARTICULARS. A MERE MAKING OF CLAIM, WHI CH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING INCOME OF ASSESSEE . THE SUPREME COURT FURTHER OBSERVED THAT IF THE CONTENTI ON OF REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WH ERE THE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON THE ASSESSEE WILL INVITE PENALTY U/S 271(1)( C). THIS IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. IN T HIS CASE, THE HONBLE SUPREME COURT HAS DULY CONSIDERED THE LAW L AY DOWN IN THE CASE OF DILIP SHAROF 291 ITR 519 AND DHARMENDRA TEXTILE 306 ITR 277. 6. RESPECTIVELY FOLLOWING THE PROPOSITION OF LAW L AID DOWN BY HONBLE SUPREME COURT IN CASE OF RELIANCE PETRO PRO DUCTS (SUPRA) AND APPLYING THE SAME TO THE FACTS OF INSTA NT CASE, I DO NOT FIND ANY MERIT FOR LEVY OF PENALTY WITH RESPECT TO THE PROPORTIONATE DISALLOWANCE OF CLAIM OF DEPRECIATION . 5 ITA 295/JODH/2018 SHRI ANAND JAIN, BHILWARA VS. ITO IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/07/2018 . SD/- [R.C. SHARMA] ACCOUNTANT MEMBER DATED : 19/07/2018 *GANESH KR. COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 6. GUARD FILE (ITA NO. 295/JODH/2018) ASSISTANT REGISTRAR JODHPUR BENCH