BAPUSAHEB N. DHUMAL, MUMBAI V. DCIT 22(2), MUMBAI

ITA 4294/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2101 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 11-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 29-05-2013
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Assessee Lawyers: ANIL J SATHE
• Keywords: Depreciation; Bonafide belief; Wrong claim; Bonafide mistake

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A M & SHRI SANDEEP GOSAIN , J M ./ ITA NO . 4294 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 7 - 20 0 8 ) BAP USAHEB NANASAHEB DHUMAL, SHRAM SAFALYA BLDG., 1 ST FLOOR, ROOM NO.2, PLOT NO.E - 1, WADALA TRUCK TERMINAL, MUMBAI - 400037 VS. DCIT - 22(2), VASHI, NAVI MUMBAI ./ ./ PAN/GIR NO. : A A BPD 9282 A ( / APPELLANT ) .. ( / RESPOND ENT ) /ASSESSEE BY : SHRI ANIL J. SATHE /REVENUE BY : SHRI VIVEK BATRA / DATE OF HEARING : 15 / 09 / 2015 / DATE OF PRONOUNCEMENT 30/11 /2015 / O R D E R PER R.C.SHA RMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), DATED 18 - 3 - 201 FOR THE ASSESSMENT YEAR 200 7 - 08 , IN THE MATTER OF IMPOSITION OF PENALTY U/S. 271(1)(C) OF THE I.T.ACT . 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. D URING THE COURSE OF ASSESSMENT, T HE AO DISALLOWED ASSESSEES CLAIM OF DEPRECIATION ON TANKERS BY OBSERVING THAT R ATE OF DEPRECIATION ALLOWABLE DURING THE YEAR UNDER CONSIDERATION IS 30% IN PLACE OF 40% CLAIMED BY THE ASSESSEE. THE CONTENTION OF ASSESSEE WAS THAT ASSESSEE WAS CONSISTE NT LY CLAIMING DEPRECIATION AT 40% , THEREFORE, HE WAS HAVING BONAFIDE BELIEF THAT R ATE OF DEPRECIATION ON TANKERS IN THE YEAR ALSO IS AT 40%. THE AO OBSERVED THAT RATE OF DEPRECIATION ON TANKERS DURING ITA NO. 4294 /M/1 3 2 THE YEAR IS ALLOWA BLE AT 30% , THERE IS EXCESS CLAIM OF DEPRECIATION. FOR SUCH EXCESS CLAIM THE ASSESSEE AGREED AT THE TIME OF ASSESSMENT AND DID NOT FILE ANY APPEAL, HOWEVER, THE AO HAS LEVIED PENALTY U/S. 271(1)(C) OF THE ACT, WHICH WAS CONFIRMED BY THE CIT(A). 3. LD. AR RE LIED ON THE DECISION OF HON BLE M.P. HIGH COURT IN THE CASE OF SKYLINE AUTO PRODUCTS (P) LTD., 271 ITR 335 IN SUPPORT OF THE PROPOSITION THAT BONAFIDE MISTAKE IN CLAIM OF DEPRECIATION DOES NOT ATTRACT PENALTY U/S.271(1)(C) OF THE ACT. HON BLE GUJARAT HI GH COURT IN THE CASE OF GLOW TECH STEELS (P) LTD., 280 ITR 133 HELD THAT WHERE THE ASSESSEE HAS MADE WRONG CLAIM FOR EXTRA - SHIFT DEPRECIATION ONLY DUE TO OVERSIGHT BEING BASED ON APPRECIATION OF FACTS AND THE SCHEME OF DEPRECIATION ENVISAGED BY THE RELEVAN T PROVISIONS, NO PENALTY SHALL BE IMPOSABLE. HON BLE BOMBAY HIGH COURT IN THE CASE OF SOMANY EVERGREE KNITS LTD., 352 ITR 592 OBSERVED THAT BONAFIDE INADVERTENT MISTAKE OF CA WHILE FILING OF RETURN OF INCOME WILL NOT AMOUNT TO FURNISHING OF INACCURATE PAR TICULARS OF INCOME. ACCORDINGLY, PENALTY WAS NOT LEVIABLE. HONBLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. , 348 ITR 306 OBSERVED THAT IMPOSITION OF PENALTY WOULD BE UNWARRANTED IN CASE WHERE ASSESSEE HAS COMMITTED INADVERTENT AND BONAFDIE ERROR AND NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCOME OR FURNISH INACCURATE PARTICULARS. 4. APPLYING THE PROPOSITION OF LAW DISCUSSED BY VARIOUS HON BLE HIGH COURTS AND HONBLE SUPREME COURT AS DISCUSSED ABOVE, TO THE FACTS OF THE P RESENT CASE, IMPOSITION OF PENALTY IS NOT WARRANTED FOR INADVERTENT CLAIM OF DEPRECIATION DUE TO BONAFIDE REASONS. ITA NO. 4294 /M/1 3 3 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 30/11 / 201 5 . SD/ - SD/ - ( SANDEEP GOSAIN ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 30/11 /201 5 . . /PKM , . / PS / COPY OF THE ORDE R FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//