Goverdhan Creation Pvt.Ltd., Surat V. The Dy.CIT.,Circle-1, Surat

ITA 3299/AHD/2011

• Counselvise Citation: 329920514 RSA 2011
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 29-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Depreciation; Difference of opinion; Unabsorbed depreciation
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.3299/AHD/2011 ASSESSMENT YEAR :2008-09 GOVERDHANA CREATION PVT. LTD. G-1309, GROUND FLOOR, SURAT TEXTILE MARKET, RING ROAD, SURAT PAN NO.AACCG1242P V/S . DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, SURAT (APPELLANT) .. (RESPONDENT) /BY APPELLANT SHRI M.K. PATEL, AR /BY RESPONDENT SHRI VINOD TANWANI, SR-DR /DATE OF HEARING 28-02-2012 / DATE OF PRONOUNCEMENT 16-03-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, SURAT DATED 30-09-2011 FOR THE ASSESSMENT YEAR 2008-09, WHEREBY THE APPEAL OF THE ASSESSEE AGAINST THE PENA LTY ORDER HAS BEEN DISMISSED. 2. THE BRIEF FACTS THAT GAVE RISE TO FILING OF THIS APPEAL ARE THE ASSESSEE-COMPANY FILED ITS RETURN OF INCOME ON 30-09-2008 SHOWING TO TAL INCOME AT RS. NIL. THE CASE WAS TAKEN UP FOR SCRUTINY AND A NOTICE U/S 143(2) O F THE INCOME-TAX ACT, 1961 WAS ISSUED. IN RESPONSE TO THE NOTICE, AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FURNISHED THE DETAILS AS CALLED FOR AND THE PROCEEDINGS ITA NO.3299/AHD/2011 A.Y. 2008-09 GOVERDHAN CREATION PVT. LTD. V. DCIT, CIR-1, SRT PAGE 2 WERE COMPLETED VIDE ORDER DATED 22-12-2010. THE ASS ESSING OFFICER OBSERVED IN HIS ASSESSMENT ORDER AS UNDER:- 7. ON PERUSAL OF THE WORKING OF BOOK PROFIT U/S. 1 15JB OF THE I.T. ACT IT WAS NOTICED THAT FROM THE NET PROFIT AS PER PROFIT & LOSS ACCOUNT OF RS.9,56,872/- THE ASSESSEE HAS DEDUCTED UNABSORBED DEPRECIATION OF RS.17,06,906/- PERTAINING TO THE CURRENT YEAR I.E. A.Y. 2008-09 AS WORKED BY THE ASSESSEE IN THE COMPUTATION OF INCOME . CURRENT YEARS UNABSORBED DEPRECIATION IS NOT ALLOWABLE TO BE DEDU CTED FROM THE NET PROFIT FOR WORKING OUT THE BOOK PROFIT. AS PER THE PROVISIONS OF SECTION 115JB OF THE I.T. ACT NET PROFIT AS PER PROFIT & LO SS ACCOUNT IS TO BE REDUCED BY THE BROUGHT FORWARD UNABSORBED BUSINESS LOSS OR BROUGHT FORWARD UNABSORBED DEPRECIATION, WHICHEVER IS LESS. HERE IN THE INSTANT CASE, ON VERIFICATION OF THE CASE RECORDS, IT WAS N OTICED THAT THERE WAS NO BROUGHT FORWARD BUSINESS LOSS AS PER BOOKS. THER EFORE, THE BOOK PROFIT U/S 115JB OF THE I.T. ACT WORKED OUT BY THE ASSESSEE IS FOUND TO BE INCORRECT. IN VIEW OF THE ABOVE DISCUSSION, THE BOOK PROFIT U/S.115JB OF THE I.T. ACT IS WORKED OUT AS UNDER:- NET PROFIT AS PER PROFIT & LOSS ACCOUNT AS SHOWN R S.9,56,872 BOOK PROFIT RS.9,56,872 I.E. RS.9,56,872 ==== ===== PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T. ACT ARE BEING INITIATED FOR FURNISHING INACCURATE PARTICULARS AND CONCEALMENT O F INCOME. IN THE BACKGROUND A NOTICE U/S. 274 R.W.S. 271(1)(C ) OF THE INCOME-TAX ACT, 1961 ISSUED TO THE ASSESSEE IN RESPONSE THERETO ASSESSEE SUBMITTED AS UNDER:- THE ASSESSEE COMPLETELY FURNISHED ALL THE RELEVANT DETAILS IN THE BOOKS OF ACCOUNT AS WELL AS RETURN OF INCOME BASED ON THE SA ME THE LD. AO FOUND THAT AS ACCORDING TO PROVISIONS OF SECTION 115JB OF THE ACT THE NET PROFIT AS PER PROFIT AND LOSS ACCOUNT IS TO BE REDUCED BY THE BRO UGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION WHICHEVER IS LOWER AND I N CASE OF THE ASSESSEE PROFIT AS PER PROFIT AND LOSS ACCOUNT IS RS.9,56,87 2 AND UNABSORBED DEPRECIATION IS RS.17,06,906 AND HENCE THEE WAS NO BROUGHT FORWARD LOSS HENCE THE ASSESSEE SHOULD NOT LIABLE TO ALLOW UNABS ORBED DEPRECIATION. IN THE ABOVE MATTER THE ASSESSEE FURNISH ALL THE RELEVANT DETAILS TO THE TAX RETURN PREPARE AND DIFFERENCE OF OPINION IS ARISEN BETWEEN IT AUTHORITY AND TAX RETURN PREPARED. HENCE, IT SHOULD NOT BE CONSIDERED AS CON CEALMENT OF THE FACT OR FURNISHING INACCURATE PARTICULARS ON THE SIDE OF TH E ASSESSEE. THE AS ACCEPTED WHAT ADDITION MADE BY THE DEPARTMENT AND TAX ON THE SAME ADJUSTED IN THE AMOUNT OF REFUND DUE FOR A.Y 2009-10 THE ASSESSING OFFICER WAS NOT SATISFIED WITH EXPLAN ATION AS OFFERED BY ASSESSEE AND LEVIED A PENALTY OF RS.98,558/- U/S 271(1)(C) OF T HE ACT BEING 100% OF TAX SOUGHT TO BE AWARDED. AGGRIEVED AGAINST THE ORDER OF THE ASSE SSING OFFICER THE ASSESSEE FILED ITA NO.3299/AHD/2011 A.Y. 2008-09 GOVERDHAN CREATION PVT. LTD. V. DCIT, CIR-1, SRT PAGE 3 APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER PERUSING THE RECORDS AND SUBMISSIONS MADE BY THE REPRESENTATIVE OF THE ASSES SEE DISMISSED THE APPEAL. IN THIS BACKGROUND, THE ASSESSEE HAS FILED PRESENT APP EAL RAISING FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN L EVYING PENALTY OF RS.98,558/- U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITION M AY PLEASE BE DELETED AS LEARNED MEMBERS OF THE TRIBUNAL MAY DEEM IT PROPER. 3. BEFORE US THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS ARGUED THAT THIS IS THE MATTER WHERE THE DIFFERENCE BETWEEN THE ASSESSING OFFICER AND THE INCOME TAX RETURN PREPARED OF THE ASSESSEE. THE ASSESSEE I S NOT GUILTY OF FURNISHING INACCURATE PARTICULARS OF OR CONCEALMENT OF THE INC OME. THE LD. AR FURTHER RELIED UPON THE CASE LAW IN THE CASE OF CIT V. RELIANCE PETROPRODUCT PVT. LTD. (2010) 322 ITR 174 (SC). LD. AR FURTHER REQUESTED THAT A LIBER AL VIEW MAY BE TAKEN IN THE PRESENT MATTER. ON THE CONTRARY, LD. SR-DR RELIED U PON THE ORDERS PASSED BY THE AUTHORITIES BELOW AND THE JUDGMENT PASSED BY THE HO NBLE DELHI HIGH COURT IN THE CASE OF CIT V. ZOOM COMMUNICATION (P)LTD. (2010) 327 ITR 510 (DEL). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS AVAILABLE ON THE RECORD. ADMITTEDLY, THE ASSESSEE W HILE COMPUTING THE BOOK PROFIT U/S 115JB OF THE ACT HAS DEDUCTED UNABSORBED DEPRECIATI ON OF RS.17,06,906/- PERTAINING TO THE A.Y. 2008-09 AND THE CURRENT YEARS UNABSORB ED DEPRECIATION IS NOT ALLOWABLE TO BE DEDUCTED FROM THE NET PROFIT FOR WORKING OUT THE BOOK PROFIT. IT IS NOTEWORTHY THAT PROFIT AS PER PROFIT AND LOSS ACCOUNT OF RS.9,56,87 2/- IS AFTER DEDUCTING DEPRECIATION AS PER BOOKS FOR THE CURRENT YEAR OF RS.48,87,721/- . UNABSORBED DEPRECIATION FOR THE CURRENT YEAR IS THE EXCESS OF DEPRECIATION ALLOWABL E AS PER I.T. ACT. OVER AND ABOVE, THE DEPRECIATION AS PER COMPANIES ACT, DEBITED TO P ROFIT AND LOSS ACCOUNT. THERE IS NO CLAUSE IN EXPLANATION TO SECTION 115JB, UNDER WH ICH SUCH DEDUCTION CAN BE CLAIMED. THE ASSESSEE IS A LIMITED COMPANY HAVING P ROFESSIONAL ASSISTANCE AND HENCE THIS CLAIM OF THE ASSESSEE IS NOT A BONA FIDE CLAIM. IN OUR VIEW, BY DOING SO, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F THE INCOME. THE JUDGMENT AS ITA NO.3299/AHD/2011 A.Y. 2008-09 GOVERDHAN CREATION PVT. LTD. V. DCIT, CIR-1, SRT PAGE 4 RELIED UPON BY THE LD. AR IN THE CASE OF RELIANCE PETROPRODUCT PVT. LTD. (SUPRA) IS NOT APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF TH E PRESENT CASE BECAUSE THE CLAIM OF THE ASSESSEE IS NOT A BONA FIDE CLAIM. RESPECTFU LLY FOLLOWING THE RATIO AS LAID IN THE CASE OF ZOOM COMMUNICATION (P) LTD. (SUPRA). WE DO NOT FIND ANY MERIT IN THE APPEAL, SAME IS HEREBY DISMISSED. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON 16/03 /2012 SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP - 16/03/2012 ()* + ,- ,- ,- ,- ../ ../ ../ ../ 0/ 0/ 0/ 0/ / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. *.2 , ,3 / CONCERNED CIT 4. , ,3- / CIT (A) 5. /67 ...2, , .2 , ()* / DR, ITAT, AHMEDABAD 6. 79: ;< / GUARD FILE. BY ORDER/ ,- , /TRUE COPY/ =/ ( > , .2 , ()* +