Rachna Overseas Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 5359/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7315 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 16-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRIYANKA MONGIA CAS
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.5359/DEL/2014 ASSESSMENT YEAR : 2010-11 RACHNA OVERSEAS PVT. LTD., 1010-11, 26, PRAGATI TOWER, RAJINDER PLACE, NEW DELHI. PAN: AAACR1565L VS. ITO, WARD-15(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRANSHU GOEL & MS PRIYANKA MONGIA, CAS DEPARTMENT BY : NONE DATE OF HEARING : 16.06.2016 DATE OF PRONOUNCEMENT : 16.06.2016 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A) ON 07.07.2014, UPHOLDING THE P ENALTY OF ITA NO.5359/DEL/2014 2 RS.89,549/- IMPOSED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961, IN RELATION TO THE ASSESSMENT YEAR 2010-11. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED RETURN DECLARING INCOME OF RS.23,71,800/-. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE SCHEDULE OF F IXED ASSETS AS PER THE COMPANIES ACT DIVULGED THAT THE ASSESSEE HAD SO LD PLANT AND MACHINERY AT RS.12,59,421/- AND VEHICLES AT RS.20,5 2,300/-, WHEREAS THE SCHEDULE OF FIXED ASSETS AS PER THE INCOME-TAX DID NOT REFLECT ANY SUCH SALE. THIS RESULTED IN TO EXCESS CLAIM OF DEPRECIAT ION. ON BEING CALLED UPON TO CLARIFY, THE ASSESSEE REVISED ITS DEPRECIAT ION CALCULATION TO RS.75,19,061/- FROM THE EARLIER FIGURE OF RS.78,08, 860/-. ALONG WITH THE SUBMISSION DATED 3.12.2012, THE ASSESSEE FILED A RE VISED COMPUTATION OF INCOME CLAIMING DEPRECIATION AS PER INCOME-TAX ACT AT RS.75,19,061/- AND A CHALLAN OF RS.1,19,510/- DATED 30.11.2012, BE ING THE TAX ON THE DIFFERENT AMOUNT OF DEPRECIATION AT RS.2,89,799/-, WAS ALSO ENCLOSED. THE AO MADE ADDITION OF RS.2,89,799/- AND, THEREAFT ER, IMPOSED PENALTY ON THIS AMOUNT. THE LD. CIT(A) CONFIRMED THE PENAL TY. ITA NO.5359/DEL/2014 3 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS CLEARLY ADMITTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE SOLD PLANT AND MACHINERY AT RS.12.59 LAC A ND VEHICLES AT RS.20.52 LAC, WHICH SALES WERE PROPERLY SHOWN IN T HE SCHEDULE OF FIXED ASSETS AS PER COMPANIES ACT. IT WAS ONLY IN THE SCH EDULE OF DEPRECIATION FOR INCOME-TAX PURPOSES THAT SUCH AMOUNT OF SALE WA S NOT SHOWN, WHICH LED TO THE CLAIM OF DEPRECIATION ON HIGHER SIDE BY RS.2,89,799/-. WHEN SUCH MISTAKE WAS POINTED OUT, THE ASSESSEE IMMEDIAT ELY REVISED ITS DEPRECIATION COMPUTATION AND PAID DUE TAX THEREON. THESE FACTS INDICATE THAT THE ASSESSEE DID NOT HAVE ANY INTENTION OF CON CEALING THE INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME BECAUSE THE FACTUM OF THE ASSESSEE HAVING SOLD THESE ASSETS WAS VERY MUCH AVA ILABLE IN THE SCHEDULE OF FIXED ASSETS AS PER COMPANIES ACT BEFOR E THE AO. IT WAS ONLY AN INADVERTENT MISTAKE COMMITTED IN CALCULATIN G THE AMOUNT OF DEPRECIATION UNDER THE INCOME-TAX ACT. THE HONBLE SUPREME COURT IN PRICEWATER HOUSE COOPERS PVT. LTD. VS. CIT (2012) 3 48 ITR 306 (SC ), HAS HELD THAT NO PENALTY U/S 271(1)(C) CAN BE IMPOS ED FOR A BONA FIDE MISTAKE OR A NORMAL HUMAN ERROR. IN THAT CASE, DIS ALLOWANCE WAS ITA NO.5359/DEL/2014 4 REPORTED IN THE TAX AUDIT REPORT, BUT, BY INADVERTE NCE, IT WAS NOT THERE IN THE RETURN OF INCOME. THE HONBLE SUPREME COURT HELD IT TO BE A BONA FIDE MISTAKE NOT ATTRACTING ANY PENALTY. THE FACTS OF T HE INSTANT CASE ARE QUITE CLOSE TO THOSE CONSIDERED AND DECIDE D BY THE HONBLE APEX COURT IN PRICEWATER HOUSE COOPERS PVT. LTD. (SUPRA). RESPECTFULLY FOLLOWING THE PRECEDENT, I ORDER FOR T HE DELETION OF THE PENALTY. 4. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 16.06.201 6. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 16 TH JUNE, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.