M/s. Moradabad Toll Road Company Ltd., New Delhi V. DCIT, New Delhi

ITA 3156/DEL/2014

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 7797 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO. 3156 /DEL/201 4 A.Y. : 20 0 7 - 08 M/S MORADABAD TOLL ROAD COMPANY LTD., G-5 & G-6, SECTOR-10, DWARKA NEW DELHI 110 075 C/O RAWLA & CO., CHARTERED ACCOUNTANTS, 504, SURYA KIRAN BUILDING, KASTURBA GANDHI MARG, NEW DELHI 11 0001 (PAN: AABCM9154B) VS. DCIT, CIRCLE 5(1), NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : MS. RASHMITA JHA, SR. DR. DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 24.09.2018 24.09.2018 24.09.2018 24.09.2018 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 2 22 27 77 7- -- -09 0909 09- -- -201 201 201 2018 88 8 ORDER ORDER ORDER ORDER PER PER PER PER K. K.K. K. NARASIMHA NARASIMHA NARASIMHA NARASIMHA CHARY, J.M. CHARY, J.M. CHARY, J.M. CHARY, J.M. THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE ORDER DATED 24.01.2014 IN APPEAL NO. 0166/2012-13 FOR ASSESSME NT YEAR 2007-08 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-VII I, NEW DELHI (IN SHORT LD. 2 CIT(A)) WHEREIN THE LD. CIT(A) HAS UPHELD THE PENA LTY OF RS. 2,41,56,197/- MADE BY THE AO U/S. 271(1)(C) OF THE INCOME TAX ACT , 1961 (IN SHORT ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN THIS CASE WAS COMPLETED U/S. 143(3) OF THE ACT ON 02.12.2009 AT LOSS OF (-) RS. 2,83,53,758/- AS AGAINST RETURNED LOSS OF (-) RS. 1 0,02,63,570/- AFTER MAKING ADDITIONS OF RS. 7,16,79,068/- ON ACCOU NT OF DEPRECIATION; RS. 86,224/- ON ACCOUNT OF INTERNAL AU DIT AND TAX AUDIT FEES AND RS. 1,44,510/- ON ACCOUNT OF LICENCE FEE / RENT FREE ACCOMMODATION TO EMPLOYEE. AGAINST THE ADDITIONS THE AS SESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) WHO VIDE HIS ORDER DATED 28.1.2011 CONFIRMED THE ADDITION OF RS. 7,16,79,06 8/- ON ACCOUNT OF DEPRECIATION AND RS. 86,224/- ON ACCOUNT OF INTER NAL AUDIT AND TAX AUDIT FEES AND DELETED THE ADDITION OF RS. 1,44,51 0/- ON ACCOUNT LICENCE FEE/ RENT FREE ACCOMMODATION. AGGRIEVED BY T HE DECISION OF THE LD. CIT(A), THE ASSESSEE APPEALED BEFORE THE ITAT WHO IN TURN UPHELD THE ORDER OF THE LD. CIT(A). THEREAFTER, PE NALTY PROCEEDINGS U/S. 271(1) OF THE ACT WERE INITIATED BY ISSUING NOTI CE ON 04.2.2013. IN RESPONSE THERETO, THE ASSESSEE FILED ITS REPLY DATED 17.10.2012. AFTER CONSIDERING THE RESPONSE OF THE A SSESSEE, THE AO OBSERVED THAT ASSESSEE HAS FURNISHED INACCURATE PARTIC ULARS WITHIN THE MEANING OF EXPLANATION 1 TO THE SUB SECTION (1) OF THE SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 AND HELD THAT ASSESSEE 3 DELIBERATELY EVADE THE TAX ON AMOUNT OF RS. 7,17,65,2 92/- (RS. 7,16,79,068/- + RS. 86224/) AND CONCEALED THE PARTI CULARS OF ITS INCOME AND FURNISHING OF INACCURATE PARTICULARS OF IT S INCOME. HENCE, HE LEVIED THE PENALTY OF RS. 2,41,56,197/- U/S. 271( 1)(C) OF THE ACT VIDE ORDER DATED 25.2.2013. 3. AGAINST THE ABOVE PENALTY ORDER DATED 25.2.2013 P ASSED BY THE ASSESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 24.1.2014 HAS HELD THAT SINCE THE QUANTUM APPEAL IS SUB-JUDICE IN DELHI HIG H COURT, HE CONFIRMED THE ORDER OF THE AO. 4. AGAINST THE ABOVE ORDER OF THE LD. CIT(A) DATED 2 4.1.2014, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE W AS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR ITS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTE R IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND T HE ISSUE INVOLVED IN THE PRESENT APPEAL, WE ARE OF THE VIEW THA T NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND A GAIN TO THE ASSESSEE, THEREFORE, WE ARE DECIDING THE PRESENT AP PEAL EXPARTE 4 QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS AVAILABLE. 6. LD. DR STRONGLY RELIED UPON THE ORDERS OF THE AUTH ORITIES BELOW. 7. ON CAREFUL CONSIDERATION OF THE MATTER, WE FIND THA T ASSESSMENT WAS COMPLETED AT LOSS OF RS. 2,83,53,768/- AGAINST THE RETURNED LOSS OF RS. 10,02,63,570/- BY DISALLOWING T HE DEPRECIATION TO THE TUNE OF RS. 7,16,79,068/- ON ACCOUNT OF EXCES SIVE DEPRECIATION AND RS. 86224/- ON ACCOUNT OF INTERNAL AND TAX AUDIT FEES FOR NON DEDUCTION OF TDS U/S. 40(A) OF THE ACT AND AO IMPOSED THE PENALTY OF RS. 2,41,56,197/- U/S. 271(1)(C) OF T HE ACT. WE FIND THAT THERE IS ONLY THE APPLICATION OF LAW AS TO THE DEP RECIATION AND OTHER DISALLOWANCE ON WHICH NO PENALTY SHOULD BE MAI NTAINED. WE FURTHER NOTE THAT INSTEAD OF CARRY FORWARD LOSS THE ACTI ON OF THE AO ALLOWS THE CARRY FORWARD OF THE DEPRECIATION. THEREF ORE, ALL THE PARTICULARS ON WHICH THE ASSESSEE CLAIMED THE DEPRECI ATION WERE FURNISHED ALOGNWITH RETURN OF INCOME AND IT IS NOT THE CASE OF THE REVENUE THAT ANY NEW FACTS WERE UNEARTHED DURING T HE ASSESSMENT PROCEEDINGS SO THAT A REASONABLE CONCLUSI ON COULD BE DRAWN THAT THE ASSESSEE EITHER CONCEALED INCOME OR FU RNISHED INACCURATE PARTICULARS OF INCOME. IT IS ONLY A QUESTI ON OF ALLOWING THE DEPRECIATION IN THIS YEAR OR NEXT YEAR. AS A MATTER OF FACT IF THE 5 DEPRECIATION IS NOT ALLOWED THIS YEAR THE SAME WILL BE CARRIED FORWARD AND IF DEPRECIATION IS ALLOWED, THE LOSS WIL L BE CARRIED FORWARD. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSID ERED OPINION, THAT THERE IS NO ELEMENT OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THE ASSESSEE DO ES NOT STAND THE GAIN BY CLAIMING DEPRECIATION AT A HIGHER RATE THIS YEAR. WE FURTHER FIND THAT AS REGARDS FURNISHING OF INACCURAT E PARTICULARS, NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORR ECT OR INACCURATE. WE FURTHER FIND THAT SECTION 271(1)(C) PO STULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PA RTICULARS AND CONCEALMENT OF INCOME. THEREFORE, THE ASSESSEE HAS NO T AT ALL CONCEALED ANY PARTICULARS OF SUCH INCOME AND HAS AL SO NOT FURNISHED INACCURATE PARTICULARS OF INCOME. TO THESE FACTS, THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODU CTS PVT. LTD. (2010) 322 ITR-158 (SC) IS DIRECTLY APPLICABLE HERE WHEREIN, THE HON'BLE SUPREME COURT HAS HELD THAT MERELY BECAUSE T HE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCE PTED OR WAS NOT ACCEPTABLE TO THE REVENUE THAT BY ITSELF WOULD NOT ATTRACT THE PENALTY UNDER SECTION 271 (1)(C). 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AN D RESPECTFULLY FOLLOWING THE PRECEDENT, AS AFORESAID, W E ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS NEITHER CONCEALED THE INCOME 6 NOR FURNISHED INACCURATE PARTICULARS OF INCOME AND T HERE ARE NO FINDINGS OF THE ASSESSING OFFICER AND THE CIT (APPEAL S) THAT THE DETAILS FURNISHED BY THE ASSESSEE IN HIS RETURN ARE F OUND TO BE INCORRECT OR ERRONEOUS OR FALSE. UNDER THESE CIRCUMS TANCES, IN OUR VIEW THE PENALTY IN DISPUTE IS TOTALLY UNWARRANTED AND DESERVES TO BE DELETED. ACCORDINGLY, WE DELETE THE PENALTY OF RS. 2,41,56,197/- MADE U/S. 271(1)(C) OF THE I.T. ACT A ND QUASHED THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE S TANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/09/2018. SD/- SD/- [ [[ [G.D. AGRAWAL] G.D. AGRAWAL] G.D. AGRAWAL] G.D. AGRAWAL] [ [[ [K.N K.NK.N K.NARASIMHA CHARY ARASIMHA CHARY ARASIMHA CHARY ARASIMHA CHARY] ]] ] PRESIDENT PRESIDENT PRESIDENT PRESIDENT JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 27/09/2018 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY ASSISTANT REGISTRAR, ITAT, DELHI BENCHES