The ACIT, Circle-1, Surat V. M/s. Fairdeal Filaments Ltd., Surat

ITA 3565/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9948 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-08-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 27-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL, V.P.(AZ) & HON BLE SHRI T.K. SHARMA, J.M. ) I.T.A. NO. 3565/AHD./2008 ASSESSMENT YEAR : 2004-2005 ASSISTANT COMMISSIONER OF INCOME TAX, -VS.- M/S. FAIRDEAL FILAMENTS LTD., SURAT, CIRCLE-1, SURAT (PAN : AA ACF 3804 A) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN, SR. D.R. RESPONDENT BY : N O N E (WRITTEN SUBMISSION FILED) O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 21.08.2008 OF LEARNED COMMISSIONER OF INCOME TAX-I, SURAT CANCELLING THE PENALTY OF RS.41,87,345/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE IN COME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2004-05. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE C LAIMED DEPRECIATION @ 50% ON MACHINERIES PURCHASED UNDER THE SCHEME OF TUFF. THE ASSESSING O FFICER ALLOWED THE SAME @ 25% MAKING DISALLOWANCE OF RS.1,16,72,042/-. SUBSEQUENTLY VIDE ORDER DATED 28.03.2008, THE ASSESSING OFFICER LEVIED THE PENALTY OF RS.41,87,345/- ON DEP RECIATION DISALLOWED TO THE EXTENT OF RS.1,16,72,042/-. ON APPEAL, THE LEARNED COMMISSION ER OF INCOME TAX(APPEALS) CANCELLED THE PENALTY OBSERVING THAT BY CLAIMING HIGHER DEPRECIAT ION, THE ASSESSEE HAS NOT CONCEALED THE PARTICULARS OF INCOME BECAUSE HE WAS UNDER THE BONA FIDE BELIEF THAT SINCE THE BANK HAD ALLOWED PURCHASE OF THESE MACHINERIES UNDER TUF SCHEME BY G IVING LOANS, THEREFORE, DEPRECIATION WOULD ALSO BE AUTOMATICALLY AVAILABLE AT HIGHER RATE UNDE R TUF SCHEME. AGGRIEVED WITH THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CANCELL ING THE PENALTY OF RS.41,87,345/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 2 ITA NO. 3565/AHD/2008 3. ON THE DATE FIXED FOR HEARING, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, WRITTEN SUBMISSIONS WERE FILED, WHEREIN IT WAS MENT IONED THAT IN QUANTUM APPEAL, ITAT, B BENCH, AHMEDABAD IN ITA NO. 870/AHD/2007 VIDE ORDER DATED 23.04.2010 HELD THAT THE ASSESSEE IS ENTITLED TO DEPRECIATION @ 50% ON MACHI NERY PURCHASED UNDER TUF SCHEME. IN THE WRITTEN SUBMISSION, IT WAS CONTENDED THAT WHERE THE ADDITION MADE IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED IS DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT. THEREFORE, THE VIE W TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 4. ON THE OTHER HAND, SHRI K. MADHUSUDAN, LD. SR. D .R. APPEARING ON BEHALF OF THE REVENUE FAIRLY ADMITTED THAT THE ADDITION ON THE BASIS OF W HICH PENALTY UNDER SECTION 271(1)(C) WAS LEVIED HAS BEEN DELETED BY THE ITAT VIDE ORDER DATED 23.04 .2010 (SUPRA). 5. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW. IT IS PERTINENT TO NOTE THAT WHERE THE ADDITION MADE IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED IS DELETED, THERE REMAINS NO BASIS AT ALL FO R LEVYING PENALTY FOR CONCEALMENT AND, THEREFORE, IN SUCH A CASE NO PENALTY CAN SURVIVE. THEREFORE, W E ARE INCLINED TO UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CANCELLING THE PENALTY OF RS.41,87,345/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE IN COME TAX ACT, 1961. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 03.09.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 03/ 09 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT CONCERNED, (4) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR, ITAT, AHMEDABAD LAHA/SR.P.S.