Uttaranchal Jal Vidhyut Nigam Ltd., Dehradun V. DCIT, Dehradun

ITA 3650/DEL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6996 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 26-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 12-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Keywords: Depreciation; Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3650/DEL/2012 AY: 20 05-06 UTTARANCHAL JAL VIDYUT NIGAM LIMITED, VS DCIT, UJJWAL, GMS ROAD, CIRCLE 2, MAHARANI BAGH, DEHRADUN. DEHRADUN. (PAN: AAACU6672R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GUPTA, FCA SHRI SOMIL AGARWAL, CA RESPONDENT BY : SHRI O.P. MEENA, SR. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THIS PRESENT APPEAL PREFERRED BY THE ASSESSEE ARISE S OUT OF THE ORDER DATED 3.2.2012 PASSED BY THE LD. CIT(A)- I, DEHRADUN WHEREIN THE ASSESSEE HAS DISPUTED THE CONFIRMATION OF THE IMPOSITION OF PENALTY U/S 271(1)( C) OF INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) AMOUNTING TO RS.77,0 1,000/-. 2. THE ASSESSEE IS A STATE GOVERNMENT OWNED CORPORA TION ENGAGED IN THE BUSINESS OF GENERATION OF HYDRO-ELEC TRICITY. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR ASSESSM ENT YEAR 2005- 06 ON 31.10.2005 DECLARING A NET LOSS OF RS.3,22,05 ,196/-. THE I.T.A. NO. 3650/DEL/2012 ASSESSMENT YEAR 2005-06 2 ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.29,72,4 9,029/-. PENALTY WAS IMPOSED U/S 271(1)(C) OF THE ACT WITH R EFERENCE TO DISALLOWANCE OF RS.2,10,44,890/- PERTAINING TO DEPR ECIATION CLAIMED BY THE ASSESSEE ON ASSETS ACQUIRED OUT OF G RANT AND SUBSIDIES RECEIVED FROM THE STATE GOVERNMENT. IT I S AN ACCEPTED FACT THAT THE ASSESSEE WITHDREW THE GROUND OF APPEA L RELATING TO THE IMPUGNED ADDITION BEFORE THE LD. CIT(A). 3. LD. AR SUBMITTED THAT THE ASSESSEE HAD RECEIVED GRANT FROM THE STATE GOVERNMENT FOR THE DEVELOPMENT AND MODERN IZATION OF LARGE AND SMALL HYDRO POWER PROJECTS IN THE STATE A ND THE GRANT WAS UTILISED TO CREATE ASSETS ON WHICH DEPRECIATION WAS CLAIMED. HE SUBMITTED THAT THIS FACT WAS NOT KNOWN AT THE TI ME OF FILING OF RETURN AND, THEREFORE, THERE WAS NO MISSTATEMENT OF FACTS OR CONCEALMENT OF INCOME ON THIS GROUND. HE SUBMITTED THAT THE WRONG CLAIM OF DEPRECIATION WAS NEITHER MALA FIDE N OR INTENTIONAL. HE SUBMITTED THAT TWO VIEWS ON THE ACCOUNTING TREAT MENT OF THE GRANT WERE POSSIBLE. HOWEVER, THE ASSESSEE WAS OF THE VIEW THAT THE GRANT RECEIVED WAS IN THE NATURE OF CAPITAL REC EIPT AND ACCORDINGLY THE DEPRECIATION WAS FULLY ALLOWABLE AN D THE ENTIRE AMOUNT OF GRANT WAS SHOWN AS CAPITAL RESERVE IN THE BALANCE SHEET. HE RELIED ON THE DECISION OF THE HON'BLE AP EX COURT IN THE I.T.A. NO. 3650/DEL/2012 ASSESSMENT YEAR 2005-06 3 CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 (HON'BLE SUPREME COURT) AND ALSO ON THE FOLLOWING D ECISIONS OF THE COORDINATE BENCHES OF THE TRIBUNAL :- I) DCIT VS GUJARAT STATE FOREST DEVELOPMENT CORPORATI ON LTD. IN I.T.A. NO. 3294/AHMEDABAD/2009 II) ITO VS TWINKLE TECHPLAST PVT. LTD. IN I.T.A. NO. 22 08 & 2209/AHMEDABAD/2012 III) NL ENGINEERING PVT. LTD. VS DCIT IN I.T.A. NO. 1340/CHANDIGARH/2012 4. LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE PENALTY U/S 271(1)( C ) HAS BEEN CORRECTLY LEVIED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. PENALTY UND ER SECTION 271(L)(C) IS LEVIABLE IN CASES WHERE THE ASSESSEE H AS EITHER CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTIC ULARS OF INCOME. MERELY BECAUSE THE CLAIM OF THE ASSESSEE HA S NOT BEEN ACCEPTED, DOES NOT IP-SO-FACTO WARRANT LEVY OF PENA LTY UNDER SECTION 271(L)(C) OF THE ACT. I.T.A. NO. 3650/DEL/2012 ASSESSMENT YEAR 2005-06 4 6. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT, AHEMDABAD VS. RELIANCE PETROPRODUCTS PVT. LTD . (SUPRA), WHILE REFERRING TO THE WORD PARTICULARS I N INACCURATE PARTICULARS OF INCOME, OBSERVED, AS P ER LAW 'LEXICON, THE MEANING OF WORD PARTICULAR IS A DETAIL OR DETAILS, THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD PARTICULARS' USED IN SECTION 271 (L)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT WAS FURTHER HELD AS UNDER:- WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTICULARS IN THE EARLIER PART OF THIS JUDGEMENT . READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TR UTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THE CASE, THERE IS NO FINDING THAT ANY DETAILED SUPPLIE D BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING TH E CASE THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LA W, BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO INACCURATE PARTICULARS. I.T.A. NO. 3650/DEL/2012 ASSESSMENT YEAR 2005-06 5 7. THE HON'BLE SUPREME COURT IN CIT, AHEMDABAD VS. RELIANCE PETROPRODUCTS PVT. LTD (SUPRA) FURTHER NOT ED THAT IN THE FACTS OF THE CASE BEFORE IT, THERE WERE NO FINDINGS THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN OF INCOME WERE INCORRECT OR ERRONEOUS OR FAL SE NOR ANY STATEMENT MADE OR ANY DETAILS SUPPLIED WAS FOUN D TO BE FACTUALLY INCORRECT. THE COURT THUS HELD THAT ME RELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, ATTRACT PENALTY UNDER SECTION 271 (L)(C) OF THE ACT. IT WAS ALSO LAID DOW N BY THE COURT THAT THE INTENDMENT OF THE LEGISLATURE IS NOT TO LEVY PENALTY U/S 271 (L)(C) OF THE ACT IN CASE OF E VERY NON ACCEPTANCE OF CLAIM MADE BY THE ASSESSEE IN THE RET URN OF INCOME. 8. THE HON'BLE SUPREME COURT IN CIT VS RELIANCE PETROPRODUCTS P. LTD. (SUPRA) FURTHER HELD AS UNDER : READING THE WORDS 'INACCURATE' AND 'PARTICULARS' IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. IN TH IS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRE CT I.T.A. NO. 3650/DEL/2012 ASSESSMENT YEAR 2005-06 6 OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THE RE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER S. 271(L)(C). A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT O F INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY BECAU SE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT ATTRACT THE PENAL TY UNDER S. 271(1)(C). IF THE CONTENTION OF THE REVENU E IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLA IM MADE IS NOT ACCEPTED BY AO FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER S. 27I(L)(C). TH AT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. THE TRIBUNAL, AS WELL AS, THE CIT(A) AND THE HIGH COURT HAVE CORRECTLY REACHED THIS CONCLUSION. 9. ADMITTEDLY IN THE CASE BEFORE US, THE ASSESSEE W AS IN RECEIPT OF CAPITAL SUBSIDY WHICH HAD TO BE ADJUSTED AGAINST THE COST OF ASSETS PURCHASED DURING THE YEAR AND TH E DEPRECIATION ON SUCH ASSETS HAD TO BE ALLOWED ON RE DUCED VALUE. THE ASSESSEE HAD DECLARED THE COMPLETE INFOR MATION IN RESPECT OF THE SAID TRANSACTION IN THE RETURN OF INCOME. HOWEVER, UNDER BONA FIDE IMPRESSION, THE DEPRECIATI ON ON ASSETS HAD BEEN CLAIMED AT A HIGHER VALUE BUT THAT ITSELF WOULD NOT ESTABLISH THAT THE ASSESSEE HAD FURNISHED I.T.A. NO. 3650/DEL/2012 ASSESSMENT YEAR 2005-06 7 INACCURATE PARTICULARS OF INCOME. THE CLAIM MADE BY THE ASSESSEE WAS BONA FIDE. WHERE THE ASSESSEE HAD SUBM ITTED COMPLETE INFORMATION AND MERELY BECAUSE THE CLAIM O F DEPRECIATION HAD BEEN MADE ON A HIGHER FIGURE, DOES NOT MAKE THE ASSESSEE EXIGIBLE TO LEVY OF PENALTY UNDER SECTION 271(1 )(C) OF THE ACT. 10. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCE S, WE FIND NO MERIT IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE PENALTY FOR CONCEALMENT UNDER SECTION 271(L)(C) OF THE ACT. ACCORDINGLY, WE DIREC T THE ASSESSING OFFICER TO DELETE THE SAME. THE GROUNDS O F APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLO WED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11/02/ 2016. SD/- SD/- (J. SUDHAKAR REDDY) (SUDHANSHU SRIVAS TAVA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 11TH OF FEBRUARY, 2016 GS I.T.A. NO. 3650/DEL/2012 ASSESSMENT YEAR 2005-06 8 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSTT. REGISTRAR