The ACIT, 4(1), Indore V. M/s Rita Trading & Marketing Ltd., Indore

ITA 423/IND/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1497 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 03-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: SHRI; S N AGRAWAL
• Keywords: Depreciation; Wrong claim; Unabsorbed depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.423/IND/2012 A.Y. 2003-04 ASSISTANT COMMISSIONER OF INCOME TAX 4(1), INDORE :: APPELLANT VS M/S RITA TRADING & MARKETING LTD. INDORE PAN AACCR 9442E :: RESPONDENT APPELLANT BY SHRI R.A. VERMA RESPONDENT BY SHRI S.N. AGRAWAL AND SHRI PANKAJ MOGRA DATE OF HEARING 11.02.2013 DATE OF PRONOUNCEMENT 11.02.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS AGGRIEVED BY THE ORDER DATED 16 TH APRIL, 2012 PASSED BY THE LEARNED FIRST APPELLATE 2 AUTHORITY DELETING THE PENALTY IMPOSED U/S 271(1)(C ) OF THE ACT. 2. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE PENALTY WHEREAS THE LEARNED COUNS EL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE DECLARED LOSS OF RS.12,60,550/- IN ITS RETURN FILED ON 3 RD OCTOBER, 2003. THE CASE WAS REOPENED U/S 147/148 OF THE ACT AND THUS THE REQUIRED NOTICES WE RE ISSUED TO THE ASSESSEE. THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED DETAILS. IN ITS INCOME AND EXPENDITURE ACCOUNT, THE ASSESSEE CLAIMED DEPRECIAT ION OF RS. 12,15,220/-. THE ASSESSING OFFICER OBSER VED THAT SINCE THE ASSESSEE WAS NOT DOING ANY BUSINESS/MANUFACTURING ACTIVITIES AND ONLY INTER EST INCOME OF RS.12,490/- WAS OFFERED FOR TAX ATION. 3 AND CLAIMED DEPRECIATION OF RS.12,50,220/- ON COMPU TER, OFFICE EQUIPMENT, PLANT AND MACHINERY, SUCH DEPRECIATION IS NOT ALLOWABLE AS THE ASSET WAS NOT PUT TO USE. THE UNABSORBED DEPRECIATION WAS HELD TO BE WRONGLY CLAIMED AND THUS PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED. THE PENALTY O F RS.3,75,066/- WAS IMPOSED. THE LEARNED CIT(A) DELET ED THE SAME AGAINST WHICH THE REVENUE IS IN APPEAL BEF ORE THE TRIBUNAL. UNDER THESE FACTS, EVEN IF IT IS ADMI TTED THAT THE ASSET WAS NOT PUT TO USE FOR BUSINESS PURP OSES AND WRONG CLAIM OF DEPRECIATION WAS MADE, WHETHER T HE PENALTY IS LEVIABLE U/S 271(1)(C). WE ARE OF THE VI EW THAT FOR IMPOSING PENALTY U/S 271(1)(C) EITHER THERE MUS T BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF. IN ITS RETURN THE ASSESSEE MA DE THE CLAIM. IF THE ASSESSING OFFICER IS NOT SATISFIED W ITH SUCH CLAIM, HE IS AT LIBERTY TO DISALLOW THE SAME BUT ME RE MAKING A WRONG CLAIM IN ITSELF DOES NOT TANTAMOUNT TO CONCEALMENT OF INCOME AS WAS HELD BY THE HONBLE AP EX 4 COURT IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD.; 322 ITR 158 BY HOLDING THAT MERE MAKING A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING INCOME OF THE ASSESSEE. THE RATIO LAID DOWN IN CIT VS. AJAYAB SI NGH & COMPANY; 253 ITR 630 (P&H) FURTHER SUPPORTS THE CAS E OF THE ASSESSEE. IN VIEW OF THESE FACTS AND JUDICIA L PRONOUNCEMENTS, THE STAND OF THE LEARNED CIT(A) IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 11.2.2013. SD SD (R.C.SHARMA) (JOGIN DER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11.2.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-1111 5