The ITO, Ward-12(1), Ahmedabad V. Shri Rasesh Gunvantlal Parikh, Ahmedabad

ITA 3266/AHD/2010

• Counselvise Citation: 326620514 RSA 2010
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 10-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: S N DIVATIA
• Keywords: Depreciation; Bonafide belief

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT (AZ) AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A. NO.3266/AHD/2010 ( / / / / ASSESSMENT YEAR : 2006-07) ITO WARD-12(1) AHMEDABAD / VS. SHRI RASHESH GUNVANTLAL PARIKH 2/B, ARVIND PARK BHAIRAVNATH ROAD MANINAGAR, AHMEDABAD ! ./'# ./ PAN/GIR NO. : ACCPP 5159 R ( $ / // / APPELLANT ) .. ( %&$ / RESPONDENT ) $ ' / APPELLANT BY : SHRI P.L. KUREEL, SR.D.R. %&$ ( ' / RESPONDENT BY : SHRI S.N. DIVATIA )* ( +,! / / / / DATE OF HEARING : 01/08/2013 -. ( +,! / DATE OF PRONOUNCEMENT : 3.9.13 / / O R D E R PER SHRI G.C.GUPTA, VICE PRESIDENT (AZ) : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LD.CIT(A)-XX, AHMEDABAD DATED 30/09/2010 FOR THE ASST.YEAR 2006- 07. THE ONLY EFFECTIVE GROUND OF REVENUE READS AS UNDER:- 1. THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.8,78,354/- LEVIED BY THE A.O. U/S.271(1)(C) OF THE I.T.ACT, 1961. ITA NO.3266/AHD /2010 ITO VS. SHRI RASHESH GUNVANTLAL PARIKH ASST.YEAR - 2006-07 - 2 - 2. THE LD.DR SUBMITTED THAT THE CARRIED FORWARD LOS S OF PARTNERSHIP- FIRM WAS CLAIMED BY THE ASSESSEE-INDIVIDUAL AND, TH EREFORE, THE ASSESSEE IS GUILTY IN FILING OF INACCURATE PARTICULARS OF I NCOME MAKING IT LIABLE FOR PENALTY U/S.271(1)(C) OF THE ACT. HE SUBMITTED THA T THE ASSESSEE HAS NOT SUBMITTED ANY REPLY BEFORE THE ASSESSING OFFICER. THE LD.DR SUBMITTED THAT THE ASSESSEE HAS EXPLAINED THAT IT HAS ACTED B ONAFIDELY ON THE ADVICE OF HIS CHARTERED ACCOUNTANT, BUT HAS FAILED TO EXPL AIN THE BASIS OF SUCH BELIEF OF THE ASSESSEE OR HIS CHARTERED ACCOUNTANT. HE RELIED ON THE DECISION(S) OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. ZOOM COMMUNICATION (P) LTD. REPORTED AT (2010) 327 ITR 510(DELHI), DECISION OF ITAT DELHI IN THE CASE OF TRINITY TOU CH (P) LTD. VS. ITO REPORTED AT (2011) 132 ITD 88 (DELHI)[TRIB] AND DE CISION OF ITAT DELHI PRONOUNCED IN THE CASE OF ASST.CIT VS. SHRI GOVIND AMBADY, IN ITA NO.3765/DELHI/2011 FOR AY 2007-08, DATED 25/10/2011 IN SUPPORT OF HIS ARGUMENTS. 3. THE LD.COUNSEL FOR THE ASSESSEE HAS OPPOSED THE SUBMISSIONS OF THE LD.DR. HE REFERRED TO THE RELEVANT PAGES OF THE PA PER-BOOK AND SUBMITTED THAT THE ASSESSEE HAS EXPLAINED ALL THE FACTUAL MAT RIX OF THE CASE AND MERELY BECAUSE THE CARRIED FORWARD LOSS WAS NOT ALL OWED TO THE ASSESSEE, THE ASSESSEE COULD NOT BE PENALIZED U/S.271(1)(C) O F THE ACT. HE SUBMITTED THAT THE RETURN WAS PREPARED BY THE ASSES SEES CHARTERED ACCOUNTANT WHO HAS ALSO FILED HIS CONFIRMATION TO T HE EFFECT THAT IT WAS UNDER HIS ADVICE THAT THE CLAIM OF DEDUCTION OF THE CARRIED FORWARD LOSS WAS MADE BY THE ASSESSEE. HE RELIED ON THE ORDER OF THE CIT(A). ITA NO.3266/AHD /2010 ITO VS. SHRI RASHESH GUNVANTLAL PARIKH ASST.YEAR - 2006-07 - 3 - 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND HAVE GONE THROUGH THE ORDERS OF THE AO AND CIT(A). WE FIND T HAT THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS RELEVANT FOR ITS A SSESSMENT BEFORE THE AO. THE ASSESSEE HAS GIVEN THE RELEVANT NOTE ALONG WI TH ITS COMPUTATION OF INCOME. MOREOVER, WE FIND THAT THERE IS A BASIS F OR THE BONAFIDE BELIEF THAT THE DEDUCTION OF UNABSORBED LOSS OF THE EARLIE R YEARS OF THE PARTNERSHIP-FIRM WAS ALLOWABLE TO THE ASSESSEE FOR THE REASON THAT THE UNABSORBED LOSS PERTAINS TO M/S.ASHRAY INDUSTRIES I N WHICH THE ASSESSEE WAS A PARTNER AND THIS FIRM WAS DISSOLVED AND ITS E NTIRE BUSINESS WAS TAKEN OVER BY THE ASSESSEE ALONGWITH ITS LOCK, STOC K AND BARREL. THE ASSESSEE HAS CLAIMED THAT SINCE IT HAS TAKEN OVER T HE ENTIRE RUNNING BUSINESS OF THE FIRM, IT ENTERTAINED A BELIEF THAT EVEN THE UNABSORBED LOSS WOULD BE ADMISSIBLE TO THE PARTNER TAKING OVER OF T HE SAID FIRM ON THE BASIS OF THE HONBLE APEX COURT DECISION RENDERED I N THE CASE OF SAKTHI TRADING CO. (250 ITR 871)[SC]. WE FIND THAT THIS P LEA OF THE ASSESSEE ESTABLISHES THE BASIS FOR THE BONAFIDE BELIEF OF TH E ASSESSEE OR HIS CHARTERED ACCOUNTANT WHO MAKES THE CLAIM OF DEDUCTI ON OF THE UNABSORBED LOSS, WHICH WAS POSSIBLE IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE HAS CLAIME D THAT ITS RETURN OF INCOME WAS PREPARED BY HIS TAX CONSULTANT WITH THE HELP OF THE SOFTWARE AND THE SOFTWARE ITSELF TAKEN INTO WORKING THE UNAB SORBED LOSS AND DEPRECIATION IN COMPUTING THE TOTAL INCOME AND THAT THE CHARTERED ACCOUNTANT OF THE ASSESSEE HAS CONFIRMED THAT IT H AS ON HIS ADVICE THAT THE DEDUCTION WAS CLAIMED. IN THESE FACTS OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT NO CASE OF CONCEALMENT OF I NCOME OR FILING OF INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) ITA NO.3266/AHD /2010 ITO VS. SHRI RASHESH GUNVANTLAL PARIKH ASST.YEAR - 2006-07 - 4 - OF THE ACT COULD BE MADE OUT BY THE REVENUE AND, TH EREFORE, THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED AND THE GROUN D OF APPEAL OF THE REVENUE IS DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- ( A.K.GARODIA ) ( G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESID ENT (AZ) AHMEDABAD; DATED 03/ 09 /2013 0,.., .../ T.C. NAIR, SR. PS / ( %+1 2 1+ / ( %+1 2 1+ / ( %+1 2 1+ / ( %+1 2 1+/ COPY OF THE ORDER FORWARDED TO : 1. $ / THE APPELLANT 2. %&$ / THE RESPONDENT. 3. + )3 / CONCERNED CIT 4. )3() / THE CIT(A)-XX, AHMEDABAD 5. 167 %+ , , / DR, ITAT, AHMEDABAD 6. 78 9* / GUARD FILE. /) /) /) /) / BY ORDER, &1+ %+ //TRUE COPY// : :: :/ // / ' ' ' ' ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 1.8.13 (DICTATION-PAD 9 P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.03.09.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 03.09.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER .. 10. DATE OF DESPATCH OF THE ORDER