IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT DB - II I ), E BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI R AM LAL NEGI , JM ITA NO. 5576 /MUM/ 2018 ( ASSESSMENT YEAR : 2014 - 15 ) M/S. EMCO DYESTUFF PVT.LTD. UNIT NO.304, WESTERN EDGE W.E. HIGHWAY DATTAPADA ROAD BORIVALI (E) MUMBAI 400 066 VS. C OMMISSIONER OF INCOME TAX( A) - 20, 5 TH FLOOR, EARNEST HOUSE, NARIMAN POINT MUMBAI - 400021 PAN/GIR NO. AAACE1167D (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI K. GOPAL REVENUE BY SHR I AMIT PRATAP SINGH DATE OF HEARING 24 / 08 /2020 DATE OF PRONOUNCEMENT 28 / 08 /2020 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 5576/MUM/2018 FOR A.Y. 2014 - 15 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) - 20 , MUMBAI IN APPEAL DATED 30/08/2018 (LD. CIT(A) IN SHORT) IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 . ITA NO . 5576 /MUM/ 2018 M/S. EMCO DYESTUFF PVT. LTD., 2 2. THE ONLY ISSUE TO BE DECIDED IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT AMOUNTING TO RS.92,716/ - IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN T RADING OF CHEMICALS, DYES AND INTERMEDIATES. THE ASSESSEE ALSO ACTS AS A COMMISSION AGENT. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y.2014 - 15 ON 26/11/2014 DECLARING TOTAL INCOME OF RS.2,19,41,810/ - COMPRISING OF INCOME FROM HOUSE PROPERTY AND INC OME FROM BUSINESS. THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 26/12/2016 DETERMINING TOTAL INCOME AT RS.3,30,50,210/ - . IN FIRST APPEAL, THE INCOME OF THE ASSESSEE WAS ENHANCED BY THE LD. CIT(A) TO THE EXTENT OF RS.2,72,775/ - . 3.1. WE FIND THAT DURING THE YEAR UNDER APPEAL, ASSESSEE HAD LET OUT FIVE OFFICE PREMISES AND INCOME EARNED FROM THE SAME HAD BEEN OFFERED TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THESE PROPERTIES WERE PURCHASED BY THE ASSESSEE IN THE EARLIER YEAR S AND WAS USED AS OFFICE PREMISES FOR THE PURPOSE OF ITS BUSINESS. THESE DETAILS WERE DULY PROVIDED BY THE ASSESSEE BEFORE THE LD. AO AS FAR AS BEFORE THE LD. CIT(A). THE PURCHASE OF THESE PROPERTIES DULY FORMED PART OF FIXED ASSETS IN THE BALANCE SHEET OF THE ASSE SSEE A ND ALSO IN THE BLOCK OF ASSETS FOR THE PURPOSE OF CLAIMING DEPRECIATION UNDER THE INCOME TAX ACT. THE ASSESSEE CLAIMED DEPRECIATION O N THESE PROPERTIES U/S.32 OF THE ACT. WE FIND THAT THERE IS NO DISPUTE WITH REGARD TO THE TREATMENT OF RENTAL INCOME GETT ING TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE ONLY DISPUTE BEFORE US IS WHETHER THE ASSESSEE IS ENTITLED FOR DEPRECIATION ON PROPERTIES WHICH WERE LET OUT , INCOME FROM WHICH IS TAXED UNDER THE HEAD ITA NO . 5576 /MUM/ 2018 M/S. EMCO DYESTUFF PVT. LTD., 3 INCOME FROM HOUSE PROPERTY. WE FIND THAT TH E ASSESSEE HAD PLEADED THAT THE SAID PROPERTIES FORMED PART OF BLOCK OF ASSETS WHICH CANNOT BE IDENTIFIED ONCE ASSET ENT ERS INTO THE BLOCK AND HENCE, THERE IS NO QUESTION OF DISALLOWANCE OF DEPRECIATION OF THOSE PROPERTIES BY IDENTIFYING THE VALUE FROM THE BLOCK. IT WAS THE PLEA OF THE ASSESSEE THAT ONCE THE ASSET ENT ERS INTO THE BLOCK, IT LOSES ITS IDENTITY. HOWEVER, DESPITE THIS, THE ASSESSEE TOOK EFFORTS IN FURNISHING THE PURCHASE COST OF THE RESPECTIVE PROPERTIES AND THE WRITTEN DOWN VALUE BEFORE THE LO WER AUTHORITIES. THIS ENABLE D THE LD. CIT(A) TO ACTUALLY IDENTIFY THE WRITTEN DOWN VALUE OF RESPECTIVE PROPERTIES THAT WERE LET OUT AND CALCULATE THE DEPRECIATION AMOUNT AT RS.8,81,137/ - . THE LD. CIT(A) HAD DISALLOWED THE SAID DEPRECIATION ON THE GROUND TH AT SINCE THE RENTAL INCOME DERIVED FROM THOSE PROPERTIES WERE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ASSESSEE WOULD BE ENTITLED FOR STATUTORY DEDUCTION @30% TOWARDS REPAIRS ALONE AND NO FURTHER DEDUCTION IS PERMISSIBLE UNDER THE HEAD INCOM E FROM HOUSE PROPERTY. WE FIND THAT THIS TRIBUNAL WHILE DISPOSING OFF THE QUANTUM APPEAL , UPHELD THE ACTION OF THE LD. CIT(A) IN PRINCIPLE, IN DISALLOWING THE DEPRECIATION THEREON. 3. 2 . WE FIND FROM THE PENALTY NOTICE ISSUE D U/S.274 R.W.S. 271(1) (C) O F THE ACT DATED 26/12/2016, THE OFFENCE C OMMITTED BY THE ASSESSEE IS MENTIONED AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE FIND THAT THERE IS NO SATISFACTION RECORDED BY THE ASSESSING OFFICER IN THE QUANTUM ASSESSMENT ORDER FRAMED U/S.143(3) OF THE ACT DATED 26/12/2016 SPECIFYING THE OFFENCE COMMITTED BY THE ASSESSEE. HOWEVER, WE FIND THAT THE PENALTY MADE U/S.271(1)(C) OF THE ACT HAS BEEN ULTIMATELY LEVIED BY THE LD. CIT(A) - 20, MUMBAI FOR CONCEALMENT OF INCOME. WE FIND THAT THE PENALTY NOTICE H AS BEEN ISSUED BY THE LD. DCIT WHILE COMPLETING THE ASSESSMENT PROCEEDINGS FOR FURNISHING OF INACCURATE ITA NO . 5576 /MUM/ 2018 M/S. EMCO DYESTUFF PVT. LTD., 4 PARTICULARS OF INCOME. ULTIMATELY, THE PENALTY HAS BEEN LEVIED BY THE LD. CIT(A) ONLY FOR THE ENHANCED PORTION OF INCOME OF RS.2,72,775/ - AND THE TAX SO UGHT TO BE EVADED THEREON AMOUNTING TO RS.92,716/ - ON THE GROUND THAT ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME. HENCE, IT COULD BE SAFELY CONCLUDED THAT THIS IS A CASE WHERE PENALTY HAS BEEN INITIATED ON ONE LIMB OF THE OFFENCE AND PENALTY LEVIED U LTIMATELY ON A DIFFERENT LIMB OF THE OFFENCE. IN TH ESE TYPE OF CASES, THE HONBLE JURISDICTIONAL HIGH COURT HAD HELD THAT WHEN THERE IS NO SATISFACTION RECORDED BY THE LD. AO IN THE QUANTUM ASSESSMENT ORDER AND PENALTY INITIATED ON ONE LIMB AND ULTIMATELY LEVIED ON DIFFERENT LIMB O F THE ASSESSEE , THEN IN SUCH CASES, THE PENALTY LEVIED DESERVED TO BE CANCELLED. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAMSON PERINCHERY REPORTED IN 392 ITR 4 (BOM). SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE RECENT DECISION IN THE CASE OF VENTURA TEXTILES LTD., VS. CIT DATED 12/06/2020 REPORTED IN 117 TAXMAN.COM 182(BOM). RESPECTFULLY FOLLOWING THE AFORESAID DECISION, WE H OLD THAT THE PENALTY LEVIED IN THE INSTANT CASE AMOUNTING TO RS.92,716/ - IS NOT SUSTAINABLE IN THE EYES OF LAW. 3. 4 . EVEN OTHERWISE ON MERITS, WE FIND THAT IT WAS THE ASSESSEE WHICH HAS ACTUALLY PROVIDED ALL THE DETAILS IN RESPECT OF VALUE OF PROPERTIES W HICH WERE PURCHASED FROM FINANCIAL YEAR 1990 - 91 ONWARDS AND THE RESPECTIVE WRITTEN DOWN VALUE AT THE END OF EACH YEAR BEFORE THE LOWER AUTHORITIES. IT WAS THE VERY SAME DETAILS THAT WERE FURNISHED BY THE ASSESSEE WHICH WAS PLACED RELIANCE BY THE LD. CIT(A) WHILE LEVYING THE PENALTY. HENCE, THERE CANNOT BE ANY CONCEALMENT OF PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. WHEN ALL THE INFORMATION AVAILABLE FOR DETERMINING THE INCOME OF THE ASSESSEE IS PLACED ON RECORD VOLUNTARILY BY THE ASSESSEE E ITHER IN THE RETURN OR BEFORE THE AUTHORITIES A T THE TIME OF ASSESSMENT OR ITA NO . 5576 /MUM/ 2018 M/S. EMCO DYESTUFF PVT. LTD., 5 APPELLATE PROCEEDINGS, THEN THERE CANNOT BE ANY CONCEALMENT OF PARTICULARS OF INCOME THAT CAN BE ATTRIBUTED ON THE ASSESSEE. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF PRICE WATER COOPERS (P) LTD., VS. CIT REPORTED IN 348 ITR 306. WE ALSO FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD., REPORTED IN 322 ITR 1 5 8 HAD OBSERVED WITH REGARD TO FURNISHIN G OF INACCURATE PARTICULARS OF INCOME AS UNDER: - 9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DIC TIONARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS : 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTICULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT A NY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUS TAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. 3. 5 . HENCE, IN VIEW OF THE AFORESAID OBSERVATIONS AND RESPEC TFULLY FOLLOWING THE AFORESAID JUDICIAL PRECEDENTS , EVEN ON MERITS , WE FIND THAT THE PENALTY LEVIED IN THE SUM OF RS.92,716/ - DESERVES TO BE CANCELLED. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. ITA NO . 5576 /MUM/ 2018 M/S. EMCO DYESTUFF PVT. LTD., 6 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 28 / 08 /2020 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( RAM LAL NEGI ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 28 / 08 / 2020 KARUNA , SR.PS COPY OF THE ORDER 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//