M/s Agrahari Builders Pvt. Ltd., Kanpur V. DY. Commissioner of Income Tax-VI, Kanpur

ITA 523/LKW/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1152 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Wrong claim

Judgement Text

I.T.A. NO.523/LKW/2016 ASSESSMENT YEAR:2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.523/LKW/2016 ASSESSMENT YEAR:2012-13 M/S AGRAHARI BUILDERS PVT. LTD., 128/594, K BLOCK, KIDWAI NAGAR, KANPUR. PAN:AABCA 2228A VS. DY.C.I.T., RANGE-VI, KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 26/07/2016. 2. THE ONLY GRIEVANCE RAISED BY THE ASSESSEE IS THE ACTION OF LEARNED CIT(A) BY WHICH HE HAS CONFIRMED THE PENALTY IMPOSE D BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 3. LEARNED A. R. SUBMITTED THAT THE ASSESSING OFFIC ER HAS IMPOSED PENALTY U/S 271(1)(C) OF THE ACT ON ACCOUNT OF DISA LLOWANCE OF DEPRECIATION AMOUNTING TO RS.2,57,677/- ON THE GROUND THAT NO BU SINESS INCOME WAS EARNED DURING THE YEAR UNDER ASSESSMENT. IN THIS RESPECT IT WAS SUBMITTED THAT THOUGH THE ASSESSEE DID NOT CONTEST THE ADDITI ON BUT LEVY OF PENALTY U/S APPELLANT BY SHRI ASHISH JAISWAL, ADVOCATE RESPONDENT BY S HRI AJAY KUMAR, D. R. DATE OF HEARING 08/01/2018 DATE OF PRONOUNCEMENT 11 / 01 /201 8 I.T.A. NO.523/LKW/2016 ASSESSMENT YEAR:2012-13 2 271(1)(C) WAS NOT WARRANTED AS THE ASSESSEE HAD FIL ED COMPLETE DETAILS INCLUDING PARTICULARS OF ASSETS ON WHICH DEPRECIATI ON WAS CLAIMED. IT WAS SUBMITTED THAT THOUGH THE ASSESSEE HAD RIGHTLY CLAI MED THE DEPRECIATION BUT EVEN IF THE CLAIM WAS WRONG, EVERY WRONG CLAIM BY T HE ASSESSEE CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P.) LTD. [2010] 189 TAXMAN 322 (SC). 4. LEARNED D. R., ON THE OTHER HAND, HEAVILY PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND FROM THE COPY OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT PLACED AT PAGES 1 TO 3 OF THE PAPER BOOK TH AT ASSESSEE HAD FILED COMPLETE PARTICULARS WITH RESPECT TO ASSETS ON WHIC H DEPRECIATION WAS CLAIMED. THE ASSESSEE HAS ALSO FILED CHART OF FIXE D ASSETS PLACED AT PAGE NO. 3 OF THE PAPER BOOK SHOWING CLAIM OF THE SAID D EPRECIATION. FROM THE ABOVE DOCUMENTS ITSELF, THE ASSESSING OFFICER HAS O BSERVED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION TO THE EXTENT OF RS.2,57,677/- AND THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAD CONCEALED INCOME OR HAD FURNISHED WRONG PARTICULARS OF INCOME. EVEN IF IT IS PRESUMED THAT ASSESSEE WAS NOT ELIGIBLE FOR ALLOWANCE OF DEPRECIATION EVEN THEN THE PENALTY U/S 271(1)(C) CANNOT BE IMPOSED AS HELD BY HON'BLE SUPR EME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P.) LTD. (SUPRA ) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT EVERY WRONG CLAIM MADE BY THE ASSESSEE CANNOT TANTAMOUNT TO FURNISHING OF WRONG PARTICULAR S OF INCOME OR CONCEALMENT OF INCOME. THE HON'BLE SUPREME COURT H AS HELD AS UNDER: I.T.A. NO.523/LKW/2016 ASSESSMENT YEAR:2012-13 3 A GLANCE OF PROVISION OF SECTION 271(L)(C ) WOULD SUGGEST THAT IN ORDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY , THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE INSTANT CASE WAS NOT THE CASE OF CONCEA LMENT OF THE INCOME. THAT WAS NOT THE CASE OF THE REVENUE EI THER. IT WAS AN ADMITTED POSITION IN THE INSTANT CASE THAT NO IN FORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR IN ACCURATE. IT WAS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPP LIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, P RIMA FACIE, THE ASSESSEE COULD NOT BE HELD GUILTY OF FURNISHING INA CCURATE PARTICULARS. THE REVENUE ARGUED THAT SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME. SUCH CANNOT BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORD S ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAG INATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS. [PARA 7] THEREFORE, IT MUST BE SHOWN THAT THE CONDITIONS UND ER SECTION 271(1)(C ) EXIST BEFORE THE PENALTY IS IMPOSED. THE RE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETUR N FILED, BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESS EE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. [PARA 8] THE WORD 'PARTICULARS' MUST MEAN THE DETAILS SUPPLI ED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORREC T, NOT ACCORDING TO TRUTH OR ERRONEOUS. IN THE INSTANT CAS E, THERE WAS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSE E IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. S UCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVIT ING THE PENALTY UNDER SECTION 271(L)(S). A MERE MAKING OF T HE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOU NT TO THE INACCURATE PARTICULARS. [PARA 9] THE REVENUE CONTENDED THAT SINCE THE ASSESSEE HAD C LAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY WERE INCORRE CT, IT AMOUNTED TO CONCEALMENT OF INCOME. IT WAS ARGUED TH AT THE I.T.A. NO.523/LKW/2016 ASSESSMENT YEAR:2012-13 4 FALSEHOOD IN ACCOUNTS CAN TAKE EITHER OF THE TWO FO RMS: FT) AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY; (I\ ) AN ITEM OF EXPENDITURE MAY BE FALSELY (OR IN AN EXAGGERATED AM OUNT) CLAIMED, AND BOTH TYPES ATTEMPT TO REDUCE THE TAXAB LE INCOME AND, THEREFORE, BOTH TYPES AMOUNT TO CONCEALMENT OF PARTICULARS OF ONE'S INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. SUCH CONTENTION COULD NOT BE ACCEPTED AS TH E ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE N OT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT O F INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAI MED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NO T ACCEPTABLE TO THE REVENUE, THAT, BY ITSELF, WOULD N OT ATTRACT THE PENALTY UNDER SECTION 27!(L)(C). IF THE CONTENTION OF THE REVENUE WAS ACCEPTED, THEN IN CASE OF EVERY RETURN WHERE TH E CLAIM MADE WAS NOT ACCEPTED BY THE ASSESSING OFFICER ANY REASON, THE ASSESSEE WOULD INVITE PENALTY UNDER SECTION 271 (1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. [ PARA 10] THEREFORE, THE APPEAL FILED BY THE REVENUE HAD NO M ERITS AND WAS TO BE DISMISSED. 5.1 FOLLOWING THE ABOVE JUDICIAL PRONOUNCEMENT, WE SET ASIDE THE ORDER OF CIT(A) AND ALLOW THE APPEAL FILED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 11/01/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:11/01/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. R EGISTRAR