MARICO INDUSTRIES LTD., MUMBAI V. DY.CIT., CENT.CIR.-35, MUMBAI

ITA 3363/MUM/2011

• Counselvise Citation: 336319914 RSA 2011
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-02-2013
• Assessment Year: 1995-1996
• Appeal Filed On: 27-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: NITESH JOSHI
• Keywords: Depreciation; Wrong claim; Valuation report

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND RAJENDRA (AM) . . , , ./I.T.A. NO.3363 AND 3371/MUM/2011 ( / ASSESSMENT YEARS : 1995-96 AND 1996-97) M/S MARICO INDUSTRIES LTD., RANG SHARDA, K C MARG, BANDRA (W), MUMBAI-400050 / VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-35, AAYKAR BHAVAN, M.K.ROAD, MUMBAI-400020. ( & / APPELLANT) .. ( ' & / RESPONDENT) ./ ./PAN/GIR NO. : AAACM7493G & / APPELLANT BY : SHRI NITESH JOSHI ' & * /RESPONDENT BY : SHRI M.L.PERUMAL * - / DATE OF HEARING : 3.2.2014 * - /DATE OF PRONOUNCEMENT : 7.2.2014 / O R D E R PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THESE TWO APPEALS FOR ASSE SSMENT YEARS 1995-96 AND 1996-97 AGAINST TWO SEPARATE ORDERS OF LD. COMMISS IONER OF INCOME TAX(A) BOTH DATED 22.2.2011 DISPUTING THE CONFIRMATION OF LEVY OF PENALTY U/S 271(1)( C ) OF THE INCOME TAX ACT, 1961 (THE ACT) OF RS.1,36,27,500/- IN EACH OF THE ASSESSMENT YEARS UNDER CONSIDERATION. 2. SINCE THE RELEVANT FACTS AND THE ISSUE INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, WE HAVE HEARD THESE APPEALS TOGETHER A ND DISPOSE OFF BY A COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 3. RELEVANT FACTS GIVING RISE TO THESE APPEALS ARE THAT THE ASSESSEE IN THE FINANCIAL YEAR 1994-95 RELEVANT TO THE ASSESSMENT YEAR 1995 -96 ENTERED INTO A SALE AND LEASE BACK AGREEMENT WITH RAJASTHAN STATE ELECTRICITY B OARD (TO BE REFERRED IN SHORT RSEB) RSEB FOR PURCHASE OF SHUNT CAPACITORS FROM RSEB WORTH RS.3.95 CRORES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED AS SESSEE TO FILE COMPLETE DETAILS, I.E. I.T.A. NO.3363 AND 3371/MUM/2011 2 DESCRIPTION OF ASSETS, THE DATES AND YEARS IN WHI CH THESE ASSETS WERE PURCHASED BY RSEB, THE DATES AND PLACES OF INSTALLATION, COPIES OF LEASE AGREEMENT ETC. ON PERUSAL OF DETAILS FILED BY ASSESSEE, AO FOUND THAT SUCH ASSETS WERE PURCHASED BY RSEB FROM BHARAT HEAVY ELECTRICALS LIMITED AND M.B. IN THE YEARS 1988 TO 1993 AND RSEB HAD CLAIMED 100% DEPRECIATION ON THESE ASSETS BEFORE S ELLING THEM TO ASSESSEE. THAT THE COST OF ASSETS TO RSEB WAS RS.3,02,23,846/- AND T HE SAME, AFTER USING THEM FOR A PERIOD OF 2 TO 7 YEARS, WERE SOLD TO THE ASSESSEE ON 25.3.1995 AT RS.395 LAKHS. THE ASSESSEE WAS ASKED TO FILE VALUATION REPORT WHICH W AS FILED BY THE ASSESSEE. IT WAS ALSO STATED THAT THE PHYSICAL INSPECTION OF THE ASSETS WAS CARRIED OUT BY RSEB AND THE VALUER M/S KOTAK MAHINDRA FINANCE LTD. AO AFTER CONSIDE RING THE TERMS OF AGREEMENT ENTERED INTO BETWEEN THE PARTIES STATED THAT IT WAS NOT A TRUE LEASE TRANSACTION BUT WAS ONLY A FINANCIAL TRANSACTION. THAT THE ASSESSEE B EING IN THE BUSINESS OF LEASING, WOULD NOT, AS A PRUDENT BUSINESSMAN, LIKE TO PURCHASE THE MACHINERIES AT A RATE MUCH HIGHER THAN THE MARKET VALUE. THE ORIGINAL COST OF MACHI NERIES TO RSEB BEING SO LOW AND THERE WAS NO COMPULSION ON THE PART OF THE ASSESSEE TO BUY SUCH OLD MACHINERIES AT THE INFLATED PRICE OF RS.395 LAKHS. AO STATED THAT T HE ASSESSEE HAD TRIED TO GIVE COLOUR OF LEASE TRANSACTION SO AS TO CLAIM 100% DEPRECIATION ON INFLATED VALUE OF THE ASSETS IN ORDER TO REDUCE ITS TAX LIABILITY. THAT RSEB HAD ACCUMULATED LOSSES AND, THEREFORE, IT DID NOT NEED ANY DEPRECIATION. RSEB HAD ALREADY C LAIMED 100% DEPRECIATION. AO SATED THAT THE SAID TRANSACTION IS A KIND OF MORT GAGE OF ASSETS OF RSEB TO THE ASSESSEE WHICH IS GIVEN THEM AS SECURITY AGAINST T HE PAYMENT OF RS.395 LAKHS. BY DOING THIS, THE ASSESSEE ALSO GETS HUGE CLAIM OF DE PRECIATION TO REDUCE ITS TAXABLE PROFITS. CONSEQUENTLY, THE CLAIM OF DEPRECIATION OF RS.1,97,50,000/- WAS DISALLOWED, BEING 50%, AS THE SAID TRANSACTION HAD TAKEN PLACE IN THE SECOND HALF OF THE FINANCIAL YEAR. THE ASSESSEE FILED APPEAL BEFORE THE FIRST A PPELLATE AUTHORITY. 3.1 THE LD. CIT(A) VIDE HIS ORDER DATED 20.3.2002 ( COPY PLACED AT PAGES 38 TO 43 OF THE PAPER BOOK) HELD THAT THE ASSESSEE WAS ENTITL ED TO CLAIM DEPRECIATION AND THE ADDITION OF RS.1,97,50,000/- MADE BY AO WAS DELET ED. DEPARTMENT FILED APPEAL BEFORE THE TRIBUNAL BEING ITA NO.3373/MUM/2002 (A Y-1995-96) AND THE TRIBUNAL VIDE ORDER DATED 28.2.2007 (COPY PLACED AT PAGES 15 TO 37 OF THE PAPER BOOK) STATED THAT THE HONBLE APEX IN THE CASE OF SHAN FINANCE PVT LTD REPORTED IN 231 ITR 308, HELD THAT WHERE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LEASING, THEN THE LESSOR IS ENTITLED TO DEPRECIATION /INVESTMENT ALLOWANCE. H OWEVER, BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF ASEA BROWN BOVERI LTD V /S INDUSTRIAL FINANCE CORPORATION OF INDIA, (2006) 154 TAXMAN 512(SC) THERE IS A SEA CH ANGE, WHEREIN IT HAS BEEN HELD I.T.A. NO.3363 AND 3371/MUM/2011 3 THAT IN CASE OF FINANCE LEASE, IT IS THE LESSEE WH O, FOR ALL PRACTICAL PURPOSES, IS OWNER OF THE ASSETS AND NOT THE LESSOR. THUS, THE SAID PO SITION WOULD HAVE AN IMPACT ON THE CASE OF ASSESSEE BEFORE THE TRIBUNAL. THE TRIBUNAL , AFTER CONSIDERING, THE ABOVE DECISION OF THE HONBLE APEX COURT I.E. ASEA BROW N BOVERY LTD (SUPRA) AND THE TERMS AND CONDITIONS OF THE LEASE AGREEMENT HELD THAT LE ASE AGREEMENT REVEALS ALL THE FEATURES OF FINANCE LEASE. THEREFORE, THE ASSESSEE CANNOT BE TREATED AS OWNER OF THE PROPERTY AND CONSEQUENTLY IS NOT ENTITLED TO CLAIM DEPRECIATION IN RESPECT OF EQUIPMENTS WHICH ARE SUBJECT MATTER OF THE LEASE DEED. THUS, THE TRIBUNAL CONCLUDED THAT IT WAS A CASE OF FINANCE LEASE AND THE ASSESSEE COULD NOT BE TREATED AS OWNER AND THEREFORE, WAS NOT ENTITLED FOR DEPRECIATION. IT IS RELEVANT TO STATE THAT THE TRIBUNAL IN PARA 15 OF ITS ORDER STATED THAT WE DO NOT CONSIDER THE ARGUMENTS RAISED BEFORE THE TRIBUNAL THAT ASSESSEE HAD COLOURABLE DEVICE TO REDUCE IT S TAX LIABILITY. THAT THE TRIBUNAL PROCEEDED ON THE ASSUMPTIONS THAT AGREEMENT BETWEE N THE PARTIES WERE LEGAL. 3.2 PURSUANT THERETO THE AO MADE ASSESSMENT GIVI NG EFFECT TO THE ORDER OF TRIBUNAL ON 26.12.2008 AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)( C ) OF THE ACT. AO VIDE ORDER DATED 30.6.2009 AFTER CONSIDER ING THE SUBMISSIONS OF THE ASSESSEE LEVIED PENALTY AT THE RATE OF 150% OF THE TAX SOUG HT TO BE EVADED ON RS.1,97,50,000/- WHICH WORKED TO RS.1,36,27,500/-. IT IS RELEVANT T O STATE THAT DURING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE STATED THAT THE PENALTY PROCEEDINGS ARE BARRED BY LIMITATION BECAUSE THE TRIBUNAL ORDER IS DATED 28 .02.2007 AND WHEREAS THE PENALTY ORDER IS DATED 30.6.2009 AND IT WAS CONTENDED THAT EVEN IF THE ORDER OF THE TRIBUNAL WAS RECEIVED BY COMMISSIONER OF INCOME TAX BY 31 .3.2007, THE PENALTY COULD BE IMPOSED ON OR BEFORE 30.9.2007. HOWEVER, THE AO DID NOT ACCEPT THE SAID CONTENTION OF THE ASSESSEE STATING THAT THE ASSESSMENT ORDER GIVING EFFECT TO THE ORDER OF TRIBUNAL WAS PASSED ON 26.12.2008 (WRONGLY MENTIONED IN THE PENALTY ORDER DATED 28.2.2007) AND THUS, THE PENALTY PROCEEDINGS WERE BARRED BY LI MITATION ONLY ON 30.6.2009 AND NOT ON 30.9.2007. 3.3 BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. LD. CIT(A) CONFIRMED THE ACTION OF AO THAT THE PENALT Y ORDER IS NOT BARRED BY LIMITATION; AND ALSO CONFIRMED THE LEVY OF PENALTY ON THE GROUN D THAT THERE WAS NO LEASE TRANSACTION AND IT WAS A FINANCE TRANSACTION. HENC E, THE CLAIM OF DEDUCTION OF DEPRECIATION WAS FACTUALLY WRONG. THUS, THE ASSESS EE MADE INCORRECT AND FALSE CLAIM IN THE RETURN. HENCE, ASSESSEE IS IN APPEAL BEFORE TH E TRIBUNAL. I.T.A. NO.3363 AND 3371/MUM/2011 4 4. SIMILAR ARE THE FACTS IN RESPECT OF APPEAL FOR T HE ASSESSMENT YEAR 1996-97 AS THE ASSESSEE CLAIMED 50% DEPRECIATION IN THE ASSESS MENT YEAR 1996-97 AMOUNTING TO RS.1,97,50,000/- WHICH WAS DISALLOWED AND CONSEQUE NTLY PENALTY AT THE RATE OF 150% OF THE TAX SOUGHT TO BE EVADED ON THE SAID AMOUNT W AS LEVIED WHICH WORKED OUT TO RS.1,36,27,500/-. LD. CIT(A) ALSO CONFIRMED THE SA ME. HENCE, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. AR SUBMITTED THAT THE PENALTY HAS BEEN IMPOS ED MERELY BECAUSE THE TRANSACTION HAS BEEN CONSIDERED AS FINANCE TRANSAC TION BUT THE GENUINENESS OF THE TRANSACTION ENTERED INTO BY ASSESSEE WITH RSEB IS N OT IN DISPUTE. LD. AR REFERRED PARA 15 OF THE ORDER OF ITAT IN QUANTUM APPEAL AND STATE D THAT THE TRIBUNAL HAS CATEGORICALLY STATED THAT THE AGREEMENT BETWEEN THE PARTIES ARE LEGAL IN RESPECT OF SAID TRANSACTIONS. LD. AR FURTHER SUBMITTED THAT ASSE SSEE FILED COMPILATION OF DECISIONS OF VARIOUS HIGH COURTS AS WELL AS TRIBUNAL AND ALSO T HE DECISION OF HONBLE APEX COURT IN THE CASE OF SHAN FINANCE PVT LTD (SUPRA) WHEREIN IT WAS HELD THAT IF THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LEASING, THE LESSOR IS ENTITLED TO DEPRECIATION IF THE ASSETS ARE USED EVEN BY LESSEE FOR THE PURPOSE OF ITS BUSINESS. HE REFERRED PARA 9 OF THE ORDER OF ITAT IN THE QUANTUM APPEAL AND SUBMITTED THAT THE TRIBUNAL HAS CONFIRMED THE DISALLOWANCE OF DEPRECIATION IN VIEW OF THE D ECISION OF HONBLE APEX COURT IN THE CASE OF ASEA BROWN BOVERI LTD V/S INDUSTRIAL FIN ANCE CORPORATION OF INDIA (SUPRA), WHEREIN THE TRIBUNAL ITSELF HAS MENTIONED THAT THE RE IS A SEA CHANGE TAKEN PLACE BY DELIVERY OF THE JUDGMENT BY THE HONBLE APEX COURT IN THE CASE OF ASEA BROWN BOVERI LTD V/S INDUSTRIAL FINANCE CORPORATION OF INDIA (S UPRA) THAT IN THE CASE OF FINANCE LEASE, IT IS THE LESSEE WHO IS THE OWNER OF THE ASSETS A ND NOT A LESSOR. THEREFORE, LESSOR CANNOT CLAIM DEPRECIATION. LD. AR FURTHER SUBMIT TED THAT SIMILAR ISSUE HAD BEEN CONSIDERED BY ITAT, MUMBAI IN THE CASE OF CABLE C ORPORATION OF INDIA IN ITA NOS.2366, 2416 AND 3433/MUM/2000 (AY-1996-97) ORDER DATED 29. 10.2007 (COPY PLACED ON FILE) AND TRIBUNAL ON SIMILAR TYPE OF TRANSACTION OF PU RCHASE AND LEASE BACK OF THE ASSETS TO APSEB ALLOWED DEPRECIATION EVEN AFTER CONSIDERING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF ASEA BROWN BOVERY LTD (SUPRA ). LD. AR SUBMITTED THAT IT WAS A DEBATABLE ISSUE BEFORE GIVING DECISION BY HONBLE A PEX COURT IN THE CASE OF ASEA BROWN BOVERY LTD (SUPRA) AND THE HONBLE BOMBAY HIG H COURT HAS ALSO ADMITTED THE APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF TRIBU NAL TO DISALLOW DEPRECIATION AND REFERRED PAGES 64-65 OF THE PAPER BOOK WHICH IS A COPY OF INTERIM ORDER PASSED BY HONBLE JURISDICTIONAL HIGH COURT DATED 10.7.200 8 IN INCOME TAX APPEAL NO.999 OF 2007 IN MARICO LTD V/S DCIT, ADMITTING THE APPEAL OF THE ASSESSEE ON THE FOLLOWING QUESTIONS OF LAW : I.T.A. NO.3363 AND 3371/MUM/2011 5 (A) WHETHER THE ASSESSEE IS ENTITLED TO DEPRECIATI ON OF RS.179,50,000/- ON SHUNT CAPACITORS PURCHASED FROM THE THEREAFTER LEAS ED TO, RAJASTHAN STATE ELECTRICITY BOARD (RSEB) BY THE ASSESSEE? (B) WHETHER, FOR THE PURPOSE OF THE ACT, IN THE CAS E OF A FINANCE LEASE TRANSACTION THE LESSOR/APPELLANT, WHO IS THE LEGAL OWNER OF THE LEASED ASSET, CAN BE PRESUMED OR HELD NOT TO BE THE OWNER THEREOF IN THE ABSENCE OF ANY SPECIFIC ENABLING PROVISIONS IN THE ACT AND CONSEQUENTLY, W HETHER THE APPELLANT ASSESSEE CAN BE DENIED THE RIGHT TO CLAIM DEPRECIATION ALLO WANCE IN RESPECT OF SUCH ASSET LEASED BY HIM? (C) WHETHER, FOR THE PURPOSE OF THE ACT, IN THE CA SE OF A FINANCE LEASE TRANSACTION, THE LESSEE, WHO IS NOT THE LEGAL OWNER OF THE LEASED ASSETS, CAN BE PRESUMED OR HELD TO BE THE OWNER THEREOF IN THE ABS ENCE OF ANY SPECIFIC ENABLING PROVISIONS IN THE ACT AND BASED ON SUCH AN ANALOG Y, WHETHER THE APPELLANT OWNER/LESSOR OF THE LEASED ASSET CAN BE DENIED THE DEPRECIATION ALLOWANCE IN RESPECT OF SUCH LEASED ASSET? HE SUBMITTED THAT THE APPEAL IS PENDING BEFORE THE HONBLE HIGH COURT AND IS YET TO BE DISPOSED OFF. LD. AR SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY WRONG PARTICULARS OF INCOME AND THE CLAIM OF DEPRECIATION HAS BEEN DISAL LOWED IN VIEW OF ABOVE DECISION OF THE HONBLE APEX COURT AND THEREFORE LEVY OF PENAL TY U/S 271(1)( C ) OF THE ACT ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE LEAS ED ASSET IS NOT JUSTIFIED. 6. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS O F AUTHORITIES BELLOW. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD. REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF AUTHORITIES BELOW. WE AG REE WITH THE LD. AR THAT BEFORE THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF ASEA BROWN BOVERY LTD (SUPRA) THE ISSUE AS TO WHETHER THE ASSESSEE IS ENTITLED TO D EPRECIATION IN RESPECT OF TRANSACTION OF PURCHASE FROM AND LEASE BACK OF SAME ASSETS TO TH E SELLER WAS A DEBATABLE ISSUE AS TO WHETHER SUCH TRANSACTIONS ARE LEASE TRANSACTIONS OR FINANCE TRANSACTIONS, AND WHO IS ENTITLED TO CLAIM DEPRECIATION. HOWEVER, THE HONB LE APEX COURT BY ITS ABOVE ORDER HAS HELD THAT IN CASE OF FINANCE LEASE IT IS A LESSEE , WHO FOR ALL PRACTICAL PURPOSES, IS THE OWNER OF THE ASSETS AND NOT THE LESSOR AND THEREFOR E THE LESSOR IS NOT ENTITLED TO CLAIM DEPRECIATION. WE OBSERVE THAT IN THE CASE BEFORE US, THE ASSESSEE ENTERED INTO A PURCHASE AGREEMENT WITH RSEB TO PURCHASE SHUNT CA PACITORS AND THEREAFTER ENTERED INTO ANOTHER AGREEMENT TO LEASE THEM OUT. THE TR IBUNAL HAS HELD THAT SAID TRANSACTION IS A FINANCE TRANSACTION ON CONSIDERING THE TERMS AND CONDITIONS OF THE AGREEMENTS ENTERED INTO. IT IS RELEVANT TO STATE THAT THE T RIBUNAL WHILE CONSIDERING THE CLAIM OF THE ASSESSEE OF DEPRECIATION HAS STATED IN PARA 15 AS UNDER : I.T.A. NO.3363 AND 3371/MUM/2011 6 15. BEFORE PARTING WITH THIS ISSUE, WE MAY MENTIO N THAT ARGUMENTS WERE RAISED TO THE EFFECT THAT ASSESSEE ADOPTED A COLOUR ABLE DEVICE IN ORDER TO REDUCE ITS TAX LIABILITY. THESE ARGUMENTS ARE NOT BEING D EALT WITH BY US SINCE WE HAVE PROCEEDED ON THE ASSUMPTION THAT AGREEMENTS BETWEEN THE PARTIES WERE LEGAL. THE ISSUE WHETHER THERE WAS A COLOURABLE DEVICE OR NOT HAS BECOME ACADEMIC AND THEREFORE NEED NOT BE DECIDED THEREFORE, IT IS EVIDENT THAT THE TRIBUNAL HAS N OT ACCEPTED THAT THE ASSESSEE HAS ADOPTED COLOURABLE DEVICE IN ORDER TO REDUCE ITS TA X LIABILITY AND HAS STATED THAT THE AGREEMENT ENTERED INTO BETWEEN THE PARTIES, I.E A SSESSEE AND RSEB WERE LEGAL. WE ALSO OBSERVE THAT THE TRIBUNAL IN PARA 9 HAS ALSO HELD THAT THERE A SEA CHANGE HAS TAKEN PLACE BY DELIVERY OF THE JUDGMENT OF THE HON BLE APEX COURT IN THE CASE OF ASEA BROWN BOVERY LTD (SUPRA) IN RESPECT OF FINANCE LEA SE AND TO ALLOW DEPRECIATION TO THE LESSEE AND NOT TO THE LESSOR. THEREFORE, THE ISSUE AS TO WHETHER IT WAS A FINANCE LEASE OR IT WAS AN OPERATING LEASE BETWEEN THE ASSESSEE AND RSEB WAS A DEBATABLE ISSUE. THAT THE RELEVANT FACTS HAVE BEEN DISCLOSED IN TH E RETURN FILED BY THE ASSESSEE BUT AFTER CONSIDERING THE RELEVANT DOCUMENTS IT WAS FOU ND AND HELD THAT THE AGREEMENT BETWEEN THE ASSESSEE AND RSEB WAS IN THE NATURE OF FINANCE LEASE. THUS THE ASSESSEE IS NOT ENTITLED FOR DEPRECIATION ON THE LEASE ASSE TS. THERE IS NO DISPUTE TO THE FACT IF THE ASSESSEE MADE A CLAIM BONAFIDE AND ALSO OFFERE D EXPLANATION WHICH HAS NOT BEEN ACCEPTED BUT IT IS NOT FALSE OR IS NOT OF THE N ATURE THAT THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE ITS EXPLANATION, THE PROVISIONS OF S ECTION 271(1)( C ) OF THE ACT IS NOT ATTRACTED. MERELY BECAUSE, THE CLAIM MADE BY ASS ESSEE IS NOT ACCEPTED BUT AT THE TIME OF MAKING THE CLAIM IT WAS A DEBATABLE ISSUE AND POSSIBLE VIEW COULD BE TAKEN IN FAVOUR OF ASSESSEE, WE ARE OF THE CONSIDERED VIEW T HAT IN SUCH A CASE IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF INCOME AND/ OR THE ASSESSEE HAS CONCEALED ITS INCOME. SUCH AN ISSUE HAS ALSO BEEN CONSIDERED BY HONBLE APEX COURT IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS (P.) LTD. [2010] 322 ITR 158(SC), WHEREIN THE HONBLE APEX COURT HAS HELD THAT MEREL Y BECAUSE THE CLAIM OF THE ASSESSEE HAS NOT BEEN ACCEPTED BUT THE ASSESSEE HAS MADE THE BONAFIDE CLAIM, THE PROVISIONS OF SECTION 271(1)( C ) OF THE ACT ARE NOT ATTRACTED. MOREOVER, IT IS ALSO OBSERVED THAT THE APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF TRI BUNAL DISPUTING THE CONFIRMATION OF DISALLOWANCE OF DEPRECIATION TO THE ASSESSEE HAS BE EN ADMITTED BY HONBLE JURISDICTIONAL HIGH COURT (SUPRA), IT FORTIFIES THE CONTENTION OF THE LD. AR THAT THE ISSUE INVOLVING CLAIM OF DEPRECIATION WAS A DEBATABLE ISSUE. THERE FORE, WE HOLD THAT THE LEVY OF PENALTY ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IS NOT JUSTIFIED. HENCE, WE DELETE THE PENALTY FOR BOTH THE ASSESSMENT YEARS UN DER CONSIDERATION BY ALLOWING GROUND NO.2 OF BOTH THE APPEALS TAKEN BY ASSESSEE. I.T.A. NO.3363 AND 3371/MUM/2011 7 8. IN RESPECT OF GROUND NO.1 IN BOTH THE APPEALS TH AT THE PENALTY ORDER IS BARRED BY LIMITATION U/S 275(1)(A) OF THE ACT, SINCE THE RE WAS NO SUBMISSIONS MADE BEFORE US, WE DO NOT PROPOSE TO GO INTO ABOVE ISSUE. HENCE, THE SAID GROUND IS REJECTED IN BOTH THE APPEALS. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED IN PART. THE ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY, 2014. 1 2 7TH FEBRUARY, 2014 * SD SD ( / RAJENDRA) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: ON THIS 7TH DAY OF FEBRUARY, 2014 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. & / THE APPELLANT 2. ' & / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- CONCERNED 4. 6 / CIT CONCERNED 5. 7 '9 , - 9 , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) - 9 , /ITAT, MUMBAI