DCIT 3(1)(1), MUMBAI V. ALD AUTOMOTIVE P.LTD, MUMBAI

ITA 3302/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3949 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 01-06-2015
• Court: TRIBUNAL
• Department Lawyers: K MOHANDA S
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ./ ITA NO. 3302 / MUM/20 1 5 ( / ASSESSMENT YEAR : 20 07 - 2008 DCIT - 3(1)(1), MU MBAI - 400020 VS. ALD AUTOMOTIVE PVT. LTD., 13 TH FLOOR, MAKER CHAMBER, IV NARIMAN POINT, MUMBAI - 400021 ./ ./ PAN/GIR NO. : A A FCA 0924 K ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI K.MOHAND AS /ASSESSEE BY : NONE / DATE OF HEARING : 01/08 /2016 / DATE OF PRONOUNCEMENT 01 / 0 8 /201 6 / O R D E R THIS IS AN APPEAL FILED B Y THE REVENUE AGAINST THE ORDER OF CIT(A) - MUMBAI, FOR THE AS SESSMENT YEAR 20 07 - 200 , IN THE MATTER OF PENALTY IMPOSED U/S. 271(1)(C) OF I.T.ACT. 2. NO BODY APPEARED ON BEHALF OF THE ASSESSEE EVEN AFTER SERVICE OF NOTICE, THE BENCH, THEREFORE, DECIDED TO DISPOSE OF THE APPEAL AFTER CONSIDERING THE SUBMISSION OF LD. DR AND MATERIAL PLACED ON RECORD. 3. FROM THE RECORD WE FOUND THAT THE AO ALSO LEVIED PENALTY U/S.271(1)(C ) WITH REGARD TO THE ADDITION OF DEFERRED MAINTENANCE CHARGES. THE AO COMPLETED THE ASSESSMENT U/S. 143(3) ON 30.12.2009 DETERMINING THE TOTAL INCOME AT RS. 4,38,15,930/- AFTER MAKING AN ADDITION OF RS.49,77,206/ - ON ACCOUNT OF DEFERRED MAINTENANCE RESERVE OF RS. 49,77,206/ - AND DISALLOWING DEPRECIATION ON VEHI CLES OF RS. 10,33,33,337/ - . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) ITA NO. 3302 /1 5 2 AGAINST THE ORDER PASSE D BY AO. THE CIT(A) DELETED THE DISALLOWANCE OF DEPRECIATION ON VEHICLES AND CONFIRMED THE ADDITION OF DEFERRED MAINTENANCE CHARGES OF RS.49,77,206/ - . 4. BY THE IMPUGNED ORDER, THE CIT(A) DELETED THE PENALTY AFTER OBSERVING AS UNDER : - 5. THE ISSUE RELATES TO THE LEVY OF PENALTY OF RS. 15,23,025/ - BY THE AO U/S. 271(1)(C) ON DISALLOWANCE OF DEFERRED MAINTENANCE RESERVE OF RS.49,77,206/ - . I FIND FROM THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2007 FILED BY THE ASSESSEE DURING THE COURSE OF ASSESS MENT PROCEEDINGS BEFORE THE AO AND ALSO DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE ME THAT AT SCHEDULE 13; NOTES TO ACCOUNTS IT HAS MENTIONED THE FOLLOWING : - '2(G) REVENUE RECOGNITION MAINTENANCE RESERVE IS CREATED AGAINST THE FLEET MANAGEMENT CHARGES RECOGNIZED AS REVENUE IN PROPORTION TO THE ESTIMATED FUTURE MAINTENANCE COSTS OVER THE PERIOD OF LEASE. PROVISIONS DEFERRED MAINTENANCE RESERVE OPENING BALANCE 1,971,208 ADD: ADDITION DURING THE YEAR 4,977,206 1,971,208 LESS: USED DURING THE YEAR CLOSING BALANCE 6,948,414 1,971,208 THUS, THERE IS NO SUPPRESSION OF INFORMATION IN RESPECT OF DEFERRED MAINTENANCE RESERVE OF RS. 49,77,206/ - BY THE ASSESSEE. IN THE CASE OF CIT V S RELIANCE PETROPRODUCTS PUT. LTD. 322 ITR 158, THE HON'B LE SUPREME COURT HELD THAT PENALTY CANNOT BE IMPOSED ON ACCOUNT OF DIFFERENT VIEWS TAKEN ON THE SAME SET OF FACTS. IN THE CASE OF SESA RESOURCES LTD. US AC IT (2013) 38 TAXMANN.COM 224 THE HON'BLE BOMBAY HIGH COURT HELD THAT SINCE THE ASSESSEE HAS DISCLOSED ALL FACTS RELATING TO CLAIM AND MERELY BECAUSE CLAIM FOR SUCH DEDUCTION WAS DENIED, THE ASSESSEE COULD NOT BE SUBJECTED TO PENALTY U/S. 271(1)(C). IN THE CASE OF BENNETT COLEMAN AND CO VS. ACIT, IT WAS HELD BY THE !TAT MUMBAI B' BENCH THAT PENALTY CANNOT BE IMPOSED WHEN DEBATABLE AND ARGUABLE ISSUE IS DECIDED AGAINST THE ASSESSEE AND THE ASSESSEE HAD DISCLOSED FULL AND CORRECT FACTS IN THE RETURN OF INCOME. IN VIEW OF THE ABOVE POSITION OF LAW, THE PENALTY OF RS. 15,23,025/- IMPOSED BY AO U/S. 271 (1)(C) I S DELETED. 6. IN THE RESULT, THE APPEAL IS ALLOWED. ITA NO. 3302 /1 5 3 IT IS CLEAR FROM THE FINDINGS SO RECORDED BY CIT(A) THAT AS PER THE MATERIAL FILED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THERE WAS NO SUPPRESSION OF ANY INFORMATION IN RESPECT OF DE FERRED REVENUE MAINTENANCE RESERVE OF RS.49.77 LAKHS BY THE ASSESSEE. AFTER APPLYING THE JUDICIAL PRONOUNCEMENTS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. AND HONBLE BOMBAY HIGH COURT IN THE CASE OF SESA RESOUR CES LTD. VS. ACIT (2013) 38 TAXMANN.COM 224, THE CIT(A) HAS DELETED THE PENALTY. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). 5 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 01/08 / 201 6 . SD/ - ( R.C.SHARM A ) / ACCOUNTANT MEMBER MUMBAI ; DATED 01/08 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//