ITO, UDAIPUR V. M/s. S.M.t. International, UDAIPUR

ITA 393/JODH/2012

• Counselvise Citation: 39323314 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 31-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Depreciation; Difference of opinion

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 393/JODH/2012 (A.Y. 2005-06) THE I.T.O., VS. M/S S.M.T. INTERNATIONAL WARD 1(4), UDAIPUR 4 TH FLOOR INDRAPRASTHA COMPLEX SHASTRI CIRCLE, UDAIPUR. PAN NO. AAEFS5074I (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI N.A. JOSHI, D.R. ASSESSEE BY : NONE DATE OF HEARING : 06/12/2013. DATE OF PRONOUNCEMENT : 12/12/2013. O R D E R PER N.K. SAINI, A.M. THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 29.08.2012 OF LD. CIT(A), UDAIPUR FOR THE ASSESSMENT YEAR 2005 -06. 2. IN THIS APPEAL, THE ONLY GROUND RAISED BY THE D EPARTMENT RELATES TO DELETION OF PENALTY LEVELED BY THE ASSESSING OFFICE R U/S 271(1)(C) OF THE I.T. ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT) F OR RS. 4,63,379/-. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXPORT OF MARBLE BLOCK AND SLABS AND CL AIMED DEPRECIATION ON 2 HYDRAULIC EXCAVATOR @ 40% OF THE WRITTEN DOWN VALUE . HOWEVER, THE ASSESSING OFFICER ALLOWED DEPRECIATION @ 25%. THE S AID DISALLOWANCES WAS CONFIRMED BY THE LD. CIT(A) AND NO APPEAL WAS FILED BY THE ASSESSEE. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD CLAIME D THE DEPRECIATION ON HIGHER RATE THAN WHAT IT WAS ELIGIBLE FOR, WHICH PR OVED THAT THERE WAS CONCEALMENT ON THE PART OF THE ASSESSEE BY CLAIMING EXCESS DEPRECIATION. THE ASSESSING OFFICER HAD NOT ACCEPTED THE EXPLANAT ION OF THE ASSESSEE THAT THERE WAS DIFFERENCE OF OPINION BETWEEN THE ASSESSE E AND THE ASSESSING OFFICER. HE, THEREFORE, LEVIED THE PENALTY OF RS. 4 ,63,379/- U/ 271(1)(C) OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A ), WHO DELETED THE PENALTY BY OBSERVING THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT FALSE AND THE CLAIM WAS BASED ON THE DECISIONS OF VARIOUS AUTHORITIES AND THE ADVICE OF THE AUDITORS/EXPERTS. THEREFORE, THE PENA LTY U/S 271(1)(C) OF THE ACT WAS NOT LEVIABLE ON ACCOUNT OF EXCESS CLAIM OF DEDU CTION IN VIEW OF THE DECISION OF THE JURISDICTIONAL BENCH OF THE ITAT IN THE CASE OF ACIT VS. M/S KANDHARI RUBBER LTD. IN I.T.A. NO. 511/JU/2008 ORDE R DATED 13.04.2011 WHEREIN IT WAS HELD AS UNDER:- IT IS NOT THE CASE OF REVENUE THAT THE ASSESSEE HA D NOT FURNISHED COMPLETE DETAILS REGARDING THE CLAIM MADE BY IT AND, THEREFORE, MERE DISALLOWANCE OF EXCESS CLAIM MADE C OULD NOT BE TREATED AS CONCEALMENT OF INCOME. CONCEALMENT OF IN COME IMPLIES A DELIBERATE ACT ON THE PART OF THE ASSESSE E TO CONCEAL 3 SOMETHING FROM THE REVENUE BUT IN THE PRESENT CASE, ALL THE PARTICULARS WERE AVAILABLE BEFORE THE ASSESSING OFF ICER AND HE HAD ONLY RESTRICTED THE DISALLOWANCE UNDER SECTION 35D. MERE MAKING OF AN INCORRECT CLAIM, AS IS THE SETTLED LEGAL POSI TION IN VIEW OF HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF CIT V S. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC), CA NNOT BE VISITED WITH PENAL CONSEQUENCES UNDER SECTION 271( 1)(C) OF THE ACT. IN THIS CASE, HON'BLE SUPREME COURT WERE DEALI NG WITH A SITUATION IN WHICH A CLAIM FOR DEDUCTION WAS MADE W HICH WAS FOUND TO BE INADMISSIBLE IN LAW. THEIR LORDSHIPS WE RE CONCERNED WITH THE QUESTION WHETHER IN THIS CASE, AS A MATTE R OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. THEIR L ORDSHIPS NOTED THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DE TAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRE CT OR ERRONEOUS OR FALSE AND ADD THAT SUCH BEING THE CASE, THERE W OULD NOT QUESTION OF INVITING THE PENALTY UNDER SECTION 271( 1)(C) OF THE ACT AND THAT A MERE MAKING OF THE CLAIM WHICH IS NOT S USTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULAR REGARDING INCOME OF THE ASSESSEE. IN OUR CONSIDERE D VIEW, IT IS THE SAME SITUATION IN THE PRESENT CASE. IT IS NO BO DYS ALLEGATION THAT THERE HAS BEEN ANY CONCEALMENT OF PARTICULARS OR THAT THE CLAIMS ARE MADE IN LESS THAN TRANSPARENT MANNER. IN VIEW OF THE ABOVE, WE DECLINE TO INTERFERE WITH THE ORDER OF TH E LEARNED CIT(A) AND DISMISS THE GROUND OF APPEAL RAISED BY THE REVE NUE. NOW THE DEPARTMENT IS IN APPEAL. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D D.R. AND THE MATERIAL AVAILABLE ON THE RECORD. NO BODY WAS PRESE NT ON BEHALF OF THE ASSESSEE. IN THE PRESENT CASE, IT IS AN ADMITTED FA CT THAT THE ASSESSEE CLAIMED DEPRECIATION ON HYDRAULIC EXCAVATOR. THE SAID CLAIM WAS MADE ON THE BASIS OF THE ADVICE OF THE EXPERTS, HOWEVER, THE ASSESSING O FFICER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AND WAS OF THE VIEW THAT THE DEPRECIATION WAS ALLOWABLE 4 @ 25% INSTEAD OF 40% CLAIMED BY THE ASSESSEE. ON TH E BASIS OF SAID DISALLOWANCE, THE PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED. ON A SIMILAR ISSUE, THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) HAS HELD AS UNDER:- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C)WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPO SE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICU LARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACC URATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETA ILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT S USTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISH INACCURA TE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTI CULARS. 5 6. IN THE PRESENT CASE ALSO FOR THE CLAIM OF DEPREC IATION ALL THE DETAILS WERE FURNISHED BY THE ASSESSEE WHICH WERE NOT FOUND TO B E INCORRECT OR ERRONEOUS OR FALSE. THE CLAIM OF DEPRECIATION WAS MADE ON THE ADVICE OF THE EXPERTS AND THE VARIOUS DECISIONS, THEREFORE, MERELY ON THIS BA SIS THAT A CLAIM, WHICH WAS NOT SUSTAINABLE IN FULL, IT CANNOT BE SAID THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS. THEREFORE, IN VIEW OF THE RATIO LAID D OWN BY THE HON'BLE SUPREME COURT IN THE AFORESAID REFERRED TO CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC), PENALTY U/S 271(1)(C) OF THE ACT WAS NOT LEVIABLE IN THIS CASE AND THE LD. CIT(A) RIGHTLY DELETED THE SAME. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 7. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. (ORDER PRONOUNCED IN THE COURT ON 12/12/2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12/12/2013 RANJAN* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.