The Assistant Comissioner of Income Tax, Circle-5, RAJKOT-GUJARAT V. M/s. Ajanta Ltd., Morbi

ITA 394/RJT/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1093 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ ITA NO.394/RJT/2013 / ASSTT. YEAR: 2007-08 ACIT, CIR.5 RAJKOT. VS M/S.AJANTA LTD. ORPAT INDUSTRIAL ESTATE RAJKOT MORVI HIGHWAY MORVI. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI AVINASH KUMAR, DR ASSESSEE BY : SHRI VIMAL DESAI, CA / DATE OF HEARING : 28/05/2015 / DATE OF PRONOUNCEMENT: 29/05/2015 / O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS AN APPEAL FILED BY THE REVENUE AGAINST ORDER OF THE CIT(A)-IV, AHMEDAB AD DATED 30.8.2013 ASSTT.YEAR 2007-08. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE I N THIS APPEAL IS THAT THE CIT(A) ERRED IN DELETING THE PENALTY OF RS .4,89,901/- LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUN T OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO DURING T HE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HA S CLAIMED DEPRECIATION ON GUEST-HOUSE AND LABOUR QUARTERS AT THE RATE OF 10% AS AGAINST THE APPLICABLE RATE OF 5%. THE AR OF THE A SSESSEE FAILED TO GIVE ANY PROPER EXPLANATION FOR THE SAME, THEREFORE, THE AO ALLOWED DEPRECIATION AT THE RATE OF 5% AND DISALLOWED THE B ALANCE AMOUNT OF ITA NO.394/RJT/2013 2 DEPRECIATION, AND THEREBY ADDED RS.14,55,441/- TO T HE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) SUSTAINED THE DISALLOWANCE OF RS.14,55,441/- ON GUEST-HOUSE AND LABOUR QUARTERS. THEREAFTER, THE AO LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT F OR RS.4,89,901/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME B THE A SSESSEE. 5. ON APPEAL, THE CIT(A) DELETED THE PENALTY BY OBS ERVING THAT THE DISALLOWANCE OUT OF THE CLAIM OF DEPRECIATION WAS A TECHNICAL DISALLOWANCE AND CANNOT SAID TO BE IN NATURE OF CON CEALMENT. 6. BEFORE US, THE AR OF THE ASSESSEE SUBMITTED THAT IN THE ASSTT.YEAR 2006-07, THE ASSESSEE CLAIMED DEPRECIATION AT THE R ATE OF 10% ON GUEST-HOUSE AND LABOUR QUARTERS, WHICH WAS ALLOWED BY THE AO IN THE ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT. H E FILED BEFORE US A COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME TOGETHE R WITH COMPUTATION OF INCOME AND OTHER ANNEXURES WITH COPY OF ASSESSMENT ORDER DATED 31.12.2008 FOR THE ASSTT.YEAR 2006-07, WHICH ARE PLACED AT PAGE NOS.66 TO 81 OF THE PAPER BOOK. 7. WE, THUS, FIND THAT THE AO HIMSELF HAS ALLOWED D EPRECIATION TO THE ASSESSEE ON GUEST-HOUSE AND LABOUR QUARTERS AT THE RATE OF 10% IN THE ASSTT.YEAR 2006-07, AND THE RETURN OF INCOME FOR TH E ASSTT.YEAR 2006- 07 WAS FILED BY THE ASSESSEE ON 18.12.2006. THEREF ORE, THE ASSESSEE CLAIMED DEPRECIATION AT THE RATE OF 10% ON GUEST-HO USE AND LABOUR QUARTERS ON THE BASIS OF THE RETURN FIELD BY HIM IN THE EARLIER ASST.YEAR 2006-07, UNDER BONA FIDE BELIEF THAT THE SAME WAS ALLOWABLE AT THE RATE OF 10%. THEREFORE, WE ARE OF THE CONSIDERED VIEW T HAT A MERE MAKING OF CLAIM, WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF , WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING INCO ME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN OF INCOME CANNOT AM OUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. OUR ABOVE VIEW FINDS SUPPORT FROM ITA NO.394/RJT/2013 3 THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF CIT VS. RELIANCE PETROPRODUCTS P. LTD., (2010) 322 ITR 158 (SC). WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A), AND DIS MISS THIS GROUND OF APPEAL OF THE REVENUE. 8. IN THE RESULTS, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 29 TH MAY, 2015 AT RAJKOT. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER