DCIT, Circle -9, Kolkata, Kolkata V. M/s Suraksha Diagnostic & Eye Centre Pvt. Ltd., Kolkata

ITA 425/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3066 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 16-03-2012
• Court: TRIBUNAL
• Department Lawyers: NIRANJAN SATAPATI
• Assessee Lawyers: SUBASH AGARWAL ADVOCTE
• Keywords: Depreciation; Wrong claim; Difference of opinion
• Section: 148

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , !' ##$ %& ##$ %& ##$ %& ##$ %& ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI GEORGE MATHAN, JM] '( '( '( '( /ITA NO.425/KOL/2012 )&* !+,/ ASSESSMENT YEAR : 2004-05 (%. / APPELLANT ) - !& - ( 01%. /RESPONDENT) D.C.I.T., CIRCLE-9, -VERSUS- M/S.SURAKSHA DIAGNOST IC & EYE KOLKATA CENTRE PVT. LTD., KOLKATA (PAN: AAECS 6325 F) %. 2 3 / FOR THE APPELLANT: SHRI NIRANJAN SATAPATI, SR.DR 01%. 2 3 / FOR THE RESPONDENT: SHRI SUBASH AGARWAL, ADVOCTE. &!4 2 5 /DATE OF HEARING : 02.04.2013 6+ 2 5 /DATE OF PRONOUNCEMENT : 02.04.2013 7 / ORDER PER BENCH THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. C.I.T.(A)- XXXII, KOLKATA IN APPEAL NO.13/XXXII/11-12/R&T/CIR- 9/KOL DATED 27.12.2011 FOR THE ASSESSMENT YEAR 2004-05 AGAINST THE DELETION OF PENALTY LEVIED U/S 271(1)(C) OF THE I.T.ACT. 2. SHRI NIRANJAN SATAPATI, SR.DR REPRESENTED ON BE HALF OF THE REVENUE AND SHRI SUBASH AGARWAL, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LD. DR THAT IN THE ORIG INAL RETURN FILED BY THE ASSESSEE ON 17.10.2005 THE ASSESSEE HAD CLAIMED DEPRECIATION ON CERTAIN MACHINERY AT 40%. IT WAS THE SUBMISSION THAT IN RESPONSE TO NOTICE ISSUE D U/S 148 OF THE ACT THE ASSESSEE HAD FILED ITS RETURN ON 25.02.2008, IN RESPONSE TO THE NOTICE ISSUED U/S 148 DATED 28.01.2008 WHEREIN THE ASSESSEE HAD REVISED THE CLA IM OF DEPRECIATION IN RESPECT OF THE SAID MACHINERY TO 25%. IT WAS THE SUBMISSION TH AT ON ACCOUNT OF THAT WRONG CLAIM IT A NO.425/KOL/2012 2 OF THE DEPRECIATION THE ASSESSEE HAD FILED INACCURA TE PARTICULARS OF ITS INCOME AND ATTEMPTED TO CONCEAL ITS INCOME. IT WAS THE SUBMISS ION THAT THE AO HAD LEVIED PENALTY U./S 271(1)(C) OF THE IT ACT IN RESPECT OF THE EXCE SS DEPRECIATION AS CLAIMED BY THE ASSESSEE. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAD DELETED THE PENALTY BY HOLDING THAT THE ASSESSMENT HAD BEEN COMPLETED ON THE INCOM E THAT WAS RETURNED IN THE RETURN OF INCOME FILED IN RESPONSE TO 148 NOTICE AND AS TH ERE WAS NO DIFFERENCE IN THE RETURNED INCOME AND THE ASSESSED INCOME THERE WAS N O CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT WAS THE SUBMIS SION THAT IF THE NOTICE U/S 148 OF THE ACT HAD NOT BEEN ISSUED THE ASSESSEE WOULD HAVE GOT AWAY WITH THE CONCEALMENT. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(A) IS LIABLE TO BE REVERSED. 5. IN REPLY THE LD. AR DREW OUR ATTENTION TO PAGE 9 OF THE PAPER BOOK WHICH WAS A COPY OF DEPRECIATION STATEMENT. THE LD. AR POINTED OUT THAT IN THE DEPRECIATION STATEMENT A NUMBER OF ITEMS HAD BEEN SHOWN UNDER TH E HEAD LIFE SAVING MEDICAL EQUIPMENT. IT WAS THE SUBMISSION THAT LIFE SAVING MEDICAL EQUIPMENTS ARE ENTITLED TO DEPRECIATION AT 40%. IT WAS THE SUBMISSION THAT SUBSEQUENTLY IT WAS NOTICED THAT SOME OF THE EQUIPMENT WHICH WAS MENTIONED AS LIFE S AVING MEDICAL EQUIPMENT COULD NOT BE SPECIFICALLY IDENTIFIED AS PER THE DEP RECIATION SCHEDULE PROVIDED UNDER THE ACT. IT WAS THE SUBMISSION THAT BECAUSE THE SAID IT EMS WERE NOT SPECIFIED IN THE DEPRECIATION SCHEDULE THE ASSESSEE WHEN FILING THE RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT HAD REMOVED THE SAID ITEMS FROM THE HEAD LIFE SAVING EQUIPMENT AND CONSEQUENTLY CLAIMED DEPRECIATION AT 25% WHICH WAS THE RATE OF DEPRECIATION FOR PLANT AND MACHINERY. IT WAS THE SUBMISSION THAT AS THE SA ID ITEMS WERE NOT COVERED UNDER THE LIFE SAVING MEDICAL EQUIPMENT THE ASSESSEE HAD CLAIMED THE SAID EQUIPMENT AS BEING ELIGIBLE UNDER THE GENERAL BLOCK OF ASSETS BE ING MACHINERY AND PLANT OTHER THAN THOSE COVERED BY SUB-ITEMS (2),(3) AND (8). IT WAS THE SUBMISSION THAT THERE WAS ALSO A DIFFERENCE OF OPINION WITH THE EXPERTS IN RE GARD TO TREATING THE SAID EQUIPMENT AS LIFE SAVING MEDICAL EQUIPMENTS OR NOT. IT WAS THE S UBMISSION THAT NONE OF THESE EQUIPMENTS CAN FUNCTION ON A STAND ALONE BASIS. IT WAS THE SUBMISSION THAT IT WAS BECAUSE OF THIS REASON THE ASSESSEE HAD ORIGINALLY INCLUDED ALL THE EQUIPMENTS UNDER THE LIFE SAVING MEDICAL EQUIPMENT. IT WAS THE FURTH ER SUBMISSION THAT THERE WAS NO IT A NO.425/KOL/2012 3 DISPUTE THAT THE EQUIPMENT IN RESPECT OF WHICH THE DEPRECIATION HAD BEEN CLAIMED WERE MEDICAL EQUIPMENTS. IT WAS THE SUBMISSION THAT BEIN G BONA FIDE MISTAKE THE LD. CIT(A) HAD RIGHTLY DELETED THE PENALTY. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE SCHEDULE TO THE REPORT AS FILED BY THE ASSESSEE SPECIFYING THE MACH INERY ON WHICH THE DEPRECIATION HAS BEEN CLAIMED CLEARLY SHOWS THAT THE MACHINERY ARE M EDICAL EQUIPMENTS. A PERUSAL OF THE DEPRECIATION CHART SPECIFYING THE RATE OF DEPRE CIATION UNDER THE ACT SHOWS THAT SOME OF THE EQUIPMENTS AS CLAIMED BY THE ASSESSEE A S LIFE SAVING MEDICAL EQUIPMENTS ARE SPECIFIED IN PART A III SUB-ITEMS (3)(XIA). SOME OF THE ITEMS AS MENTIONED BY THE ASSESSEE IN ITS DEPRECIATION SCHED ULE DO NOT FIND PLACE IN THE ACT UNDER THE DEPRECIATION TABLE. HOWEVER, AS EXPLAINED BY THE ASSESSEE THE LIFE SAVING MEDICAL EQUIPMENTS ON WHICH THE ASSESSEE HAS CLAIME D DEPRECIATION AT 40% EVEN IN THE RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT WOULD NOT BE ABLE TO FUNCTION INDEPENDENTLY WITHOUT THE OTHER MEDICAL EQUIPMENTS. IN THE CIRCUMSTANCES THE BONA FIDE CLAIM OF THE ASSESSEE WOULD HAVE TO BE ACCEPTE D IN SO FAR AS THE ASSESSEE HAS SHOWN ALL THE EQUIPMENTS IN RESPECT OF ITS ACTIVITI ES INVOLVING THE MEDICAL SERVICES. IN ANY CASE THE CLAIM OF THE ASSESSEE THAT THE LIFE SA VING MEDICAL EQUIPMENTS OWNED BY THE ASSESSEE AND AS SPECIFIED IN THE SCHEDULE AND I N THE DEPRECIATION CHART WOULD NOT BE ABLE TO FUNCTION WITHOUT THE OTHER MEDICAL EQUIP MENTS AS CLAIMED BY THE ASSESSEE, ENTERS INTO AN AREA OF DEBATE. ONCE THE ISSUE ENTER S INTO AN AREA OF DEBATE THE DISALLOWANCE IN THIS AREA OF DEBATE WOULD NOT LEAD TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. FURTHER, A PERUSAL OF THE PENALTY ORDER AS PASSED BY THE AO ALSO SHOWS THAT THE AO HAS A DOUBT IN REGARD TO THE ISSUE IN SO FAR AS THE AO IN HIS ORDER USED THE WORD OPINION. AN OPINION OF THE AO WOULD NOT BE A GROUND FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. NO SPECIFIC CONCEALMENT HAS B EEN PROVED AGAINST THE ASSESSEE. IN THE CIRCUMSTANCES IN VIEW OF THE DECISION OF THE HO NBLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETRO PRODUCTS (P) LTD 322 ITR 158 (SC) AS ALSO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF PRICE WATERHOU SE COOPERS PVT. LTD. 348 ITR 308 WE ARE OF THE VIEW THAT THE PENALTY AS LEVIED B Y THE AO IS LIABLE TO BE CANCELLED AND WE DO SO. HERE WE MAY SPECIFICALLY MENTION THAT WE ARE NOT GOING INTO THE IT A NO.425/KOL/2012 4 FINDINGS OF THE LD. CIT(A) THAT WHEN A RETURN IS FI LED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT AND THE INCOME OFFERED IS ACCEPTED NO PE NALTY IS LEVIABLE. HOWEVER, ON THE GROUND THAT THE ISSUE GIVING RISE TO THE ENHANCEMEN T OF THE INCOME BEING A DEBATABLE ISSUE AND ON ACCOUNT OF A BONA FIDE MISTAKE OF THE ASSESSEE THE PENALTY AS CANCELLED BY THE LD. CIT(A) STANDS CONFIRMED. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT ON 02.04.2013. SD/- SD/- [ .., ] [ .##$ %& , ] [K.K.GUPTA] [ GEO RGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (5 5 5 5) )) ) DATE: 02.04.2013. R.G.(.P.S.) 7 2 0))8 98+:- COPY OF THE ORDER FORWARDED TO: 1. M/S.SURAKSHA DIAGNOSTIC & EYE CENTRE PVT. LTD., P-1 18, CIT ROAD SCHEM-VIM, KOLKATA-700054. 2 THE D.C.I.T., CIRCLE-9, KOLKATA. 3 . CIT KOLKATA 4. CIT(A)- XXXII, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA 18 0)/ TRUE COPY, 7&/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES