Doshi Chemicals Pvt. Ltd., Ahmedabad V. The Dy. CIT, (OSD), Range-1, Ahmedabad

ITA 3161/AHD/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5406 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 06-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER DOSHI CHEMICALS PVT. LTD. 6 JASMIT DUPLEX, 22 PATEL SOCIETY, GULBAI TEKRA, ELLISBRIDGE, AHMEDABAD - 360015 PAN: AAACD5490I (APPELLANT) VS THE ACIT (OSD) , RANGE - 1, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI LALIT P. JAIN , SR. D . R. ASSESSEE BY: SHRI HARDIK VORA, A.R. DATE OF HEARING : 27 - 09 - 2 018 DATE OF PRONOUNCEMENT : 28 - 09 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT M EMBER : - THIS ASSESSEE S APPEAL FOR A. Y. 2006 - 07 , ARI SES FROM ORDER OF T HE CIT(A) - 1, AHMEDABAD DATED 28 - 08 - 2 015 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS FILED RETURN OF INCOME ON 29 TH DECE MBER, 2006 DECLARING LOSS AT RS. - 54 , 16 , 786/ - . THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF I T A NO . 3161 / A HD/20 1 5 A SSESSMENT YEAR 200 6 - 07 I.T.A NO. 3161 /AHD/20 15 A.Y. 2006 - 07 PAGE NO DOSHI CHEMICAL PVT. LTD. VS. ACIT 2 THE ACT AND TOTAL LOSS WAS DETERMINED AT RS. - 16 , 33 , 503/ - AFTER MAKING DISALLOWANCE OF RS. 37 , 83 , 283/ - BEING DEPRECIATION OF BUILDING PLANT AND MACHINERY AND MOTOR CAR. ACCORDINGLY, PENALTY PROCEEDINGS WERE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN RESPECT OF CLAIM OF DEPRECIATION. THE ASSESSEE HAS EXPLAINED THAT CLAIM OF DEPRECIATION OF PLANT AND MACHINERY AND BUILDING PERTAINED TO THE ANKLESHW AR UNIT IN WHICH MANUFACTURING ACTIVITIES WAS CLOSED DUE TO SOME LEGAL DISPUTE. IT WAS ALSO SUBMITTED THAT THERE WAS NO FACT RELATING TO THE CLAIM OF DEPRECIATION WHICH WAS NO T DISCLOSED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE A SSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND LEV IED PENALTY OF RS. 1273454/ - . U/S 271(1)(C)OF THE ACT ON THE GROUND THAT NO MANUFACTURING ACTIVITY WAS CARRIED OUT AT THE ANKLESHWAR UNIT DURING THE ASSESSMENT YEAR UNDER CONSIDERATIO N. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. COUNSEL HAS CONTENDED THAT DEPRECIATION IS ALLOWABLE TO THE ASSESSEE IN RESPECT OF BLOCK OF ASSETS AT SUCH PERCENTAGE ON WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED. HE HAS CONTENDED THAT ONLY ONE UNIT AT ANKLESHWAR WAS CLOSED BECAUSE OF LEGAL DISPUTES AND LITIGATION WAS PENDING AT VARIOUS STAGES AND ALL THE MATERIAL FACTS WERE DISCLOSED THEREFORE LEVYING OF PENALTY WAS NOT CORRECT IN THE CASE OF THE ASSESSE. ON THE OTHER HAND, LD. DEPARTMENTA L REPRESENTATIVE HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. WE HAVE NOTICED THAT THE ASSESSEE HAS DISCLOSED THE COMPLETE MATERIAL FACT IN RESPECT OF ITS IMPUGNED CLAIM OF DEP RECIATION. IT HAS DISCLOSED THAT THE SAID UNIT WAS CLOSED BECAUSE OF LEGAL DISPUTES AND EARLIER IT HAD USED THE ASSETS OF ANKLESHWAR UNIT IN ITS MANUFACTURING ACTIVITIES. IN THE LIGHT OF THE ABOVE FA C TS AND CIRCUMSTANCES WE ARE NOT INCLINED WITH THE DECIS ION OF THE LD.CIT(A) AS THE ASSESSEE HAS DISCLOSED ALL THE RELEVANT MATERIAL FACTS RELATED TO ITS CLAIM OF DEPRECIATION, THEREFORE THE APPEAL OF THE ASSESSEE IS ALLOWED. I.T.A NO. 3161 /AHD/20 15 A.Y. 2006 - 07 PAGE NO DOSHI CHEMICAL PVT. LTD. VS. ACIT 3 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 28 - 09 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 28 /09 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,