M/s. D.N.P. Infrastructure Pvt.Ltd., Ahmedabad V. Dy.CIT, Circle-1(1)(2), Ahmedabad

ITA 3298/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6125 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 27-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 3298/AHD/2015 (ASSESSMENT YEAR: 2010-11) M/S DNP INFRASTRUCTURE PVT. LTD. E/5, OJAS APARTMENT, NR. NIRMA CIRCLE, AMBAWADI, AHMEDABAD-380015 V/S DCIT, CIRCLE-1(1)(2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAPPT0319Q APPELLANT BY : SHRI HARDIK VORA, AR RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. ( )/ ORDER DATE OF HEARING : 07 -02-201 8 DATE OF PRONOUNCEMENT : 12 -02-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-1, AHMEDABAD DATED 29.10.2015 PERTAINING TO A.Y. 2010- 11. ITA NO. 3298 /AHD/2015 . A.Y. 2010-1 1 2 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS AGAINST T HE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT AMOUNTING TO RS. 2,35,668/-. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A PPELLANT COMPANY WAS CONVERTED FROM PARTNERSHIP FIRM W.E.F. 16.09.2009 A ND ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. THE APPELLANT IN ITS RETURN FOR THE YEAR UNDER CONSIDERATION CLAIMED DEPRECIATION OF RS. 18.58 LAC S. THE ASSESSEE ALSO CLAIMED DEPRECIATION ON THE ASSETS RECEIVED FROM THE FIRM F OR THE REMAINING PERIOD ON THE BASIS OF DAYS FOR WHICH ASSETS HAVE BEEN USED A S PER SCHEDULE-XIV OF THE COMPANIES ACT. THE ASSESSMENT WAS COMPLETED U/S. 14 3(3) OF THE ACT VIDE ORDER DATED 08.03.2003. 4. SUBSEQUENTLY THE A.O. REALIZED THAT DEPRECIATION HA S BEEN ALLOWED ON THE ASSETS WHICH WERE TRANSFERRED FROM THE FIRM ON CONVERSION AND EXCESS DEPRECIATION HAS BEEN ALLOWED TO THAT EXTENT. 5. NOTICE U/S. 148 WAS ISSUED AND IN ITS RETURN OF INC OME FIELD IN RESPONSE TO THE NOTICE, THE ASSESSEE RECTIFIED ITS MISTAKE AND THE EXCESS DEPRECIATION CLAIMED IN THE ORIGINAL RETURN WAS WITHDRAWN. IN THE PENAL PRO CEEDINGS, THE A.O. WAS NOT SATISFIED AND PROCEEDED BY LEVYING PENALTY U/S. 271 (1)(C) OF THE ACT FOR FILING INACCURATE PARTICULARS OF INCOME AND LEVIED PENALTY OF RS. 2,35,668/-. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT INADVERTENTLY, THE ASSESSEE CLAIMED DEPRECIATION ON THE ASSETS TAK EN FROM THE PARTNERSHIP FIRM ON CONVERSION INTO A PRIVATE LTD. COMPANY. IT IS TH E SAY OF THE LD. COUNSEL THAT ITA NO. 3298 /AHD/2015 . A.Y. 2010-1 1 3 WHEN THE ASSESSEE REALIZED ITS INADVERTENT ERROR IN THE RETURN FILED IN PURSUANCE TO THE NOTICE U/S. 148 OF THE ACT. THE ASSESSEE IMM EDIATELY WITHDREW THE EXCESS CLAIM OF DEPRECIATION. THE LD. COUNSEL CONCL UDED BY SAYING THAT THE MISTAKE WAS ERRONEOUS AND UNINTENTIONAL. THEREFORE, NO PENALTY SHOULD BE LEVIED. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IT IS TRUE THAT PARTNERSHIP FIRM WAS CONVERT ED INTO A PRIVATE LTD. COMPANY WITH EFFECT FROM 16.09.2009. IT IS EQUALLY TRUE THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON THE ENTIRE ASSETS. WHEN THE MISTAKE WAS REALIZED IN THE RETURN FILED PURSUANT TO NOTICE U/S. 148 OF THE ACT , THE ASSESSEE IMMEDIATELY WITHDREW THE CLAIM OF EXCESS DEPRECIATION. IN OUR C ONSIDERED OPINION, A GENUINE MISTAKE HAS HAPPENED DUE TO ARITHMETICAL CA LCULATION OF DEPRECIATION. THE MISTAKE WAS IMMEDIATELY RECTIFIED AND THE MATTE R ENDED THEN AND THERE. IN OUR UNDERSTANDING OF THE FACTS, THIS IS NOT A FIT C ASE FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. WE DRAW SUPPORT FROM THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158. IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE SUP REME COURT, WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO D ELETE THE IMPUGNED PENALTY. APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 12 - 02- 20 18 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 12 /02/2018