The Botad Peoples Co.Op.Bank Ltd., Bhavnagar V. The ACIT.,Circle-2, Bhavnagar

ITA 560/AHD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0709 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 24-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 560/AHD/2014 (ASSESSMENT YEAR: 2008-09) THE BOTAD PEOPLE CO-OP. BANK LTD. SARDAR SAHAKAR BHAWAN, HAVELI CHOWK, PALIYAD ROAD, BOTAD- 364710 V/S ASSTT. CIT, CIRCLE-2, BHAVNAGAR (APPELLANT) (RESPONDENT) PAN: AAAAS3897C APPELLANT BY : SHRI S. N. DIVETIA, AR RESPONDENT BY : SHRI SANJAY KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 30 -08-201 6 DATE OF PRONOUNCEMENT : 05 -09-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-XX, AHMEDABAD DATED 20.01.2014 PERTAINING TO A.Y. 2008-09. ITA NO.560/A HD/2014 . A.Y. 2008-09 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN UPHOLDING THE PENALTY OF RS. 14,32,215/- LEVIED BY THE A.O. U/S. 271(1)(C) OF THE ACT IN RESPECT OF ADDITION OF RS. 45 LACS. 3. THE ASSESSEE IS A CO-OPERATIVE BANK DULY REGISTERED UNDER GUJARAT SOCIETIES ACT AND GOVERNED BY THE RULES AND REGULAT IONS FRAMED BY RBI RELATING TO THE BANKING BUSINESS. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 31,92,600/- WHICH INCLUDED DEPRECIATION IN THE VALUE OF GOVERNM ENT SECURITIES AT RS. 25,00,000/-. THE A.O FURTHER FOUND THAT THE ASS ESSEE HAS MADE PROVISION TOWARDS DIMINUTION IN VALUE OF SECURITIES AGGREGATING TO RS. 45 LACS DURING THE FINANCIAL YEARS 2002-03 TO 2005- 06. WHEN QUESTIONED, THE ASSESSEE REPLIED THAT THE PROVISION OF RS. 45 LACS WAS ALREADY ADDED BACK IN THE RETURN OF INCOME FOR THE RESPECTIVE YEARS. HOWEVER, THE A.O. WAS OF THE OPINION THAT SINCE THE ASSESSEE HAS TAKEN THE BENEFIT OF DEDUCTION U/S. 80P IN EARLIER YEARS, THEREFORE BY NOT CLAIMING DEPRECIATION ON SECURITIES IN THOSE YE ARS, THE ASSESSEE HAS INFLATED PROFIT FOR THE PURPOSE OF SECTION 80P. 5. THE ADDITIONS MADE BY THE A.O. TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 18.05.2016 IN ITA NO. 157 9/AHD/2011 CONFIRMED THE DISALLOWANCE OF PROVISION OF EARLIER YEARS. THE A.O. INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT. A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO EXPLAIN WHY PE NALTY SHOULD NOT BE LEVIED. THE ASSESSEE FILED A DETAILED REPLY CLAIMIN G THAT THERE IS NEITHER ANY CONCEALMENT OF INCOME NOR THERE IS ANY FILING O F INACCURATE PARTICULARS. THEREFORE PENALTY SHOULD NOT BE LEVIED . ITA NO.560/A HD/2014 . A.Y. 2008-09 3 6. THE SUBMISSIONS OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE A.O. WHO WAS OF THE OPINION THAT BY CLAIMING DEDUCTION U/S. 80P, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALED INCOME TO THE TUNE OF RS. 45 LACS. ACCORDINGLY, PENALTY OF RS. 14,32,215/- WAS LEVIED U/S.271(1)(C) OF THE ACT. 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 8. AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE FACT UAL MATRIX, WE FIND THAT ALTHOUGH THE ASSESSEE HAS CLAIMED DEPRECIATION IN RESPECT OF DIMINUTION IN VALUE OF GOVERNMENT SECURITIES BUT AT THE SAME TIME, THE PROVISIONS SO MADE WERE ADDED BACK IN THE RESPE CTIVE FINANCIAL YEARS. WHILE LEVYING THE PENALTY, THE EMPHASIS OF T HE A.O. IS THAT THE ASSESSEE HAS ALSO AVAILED THE BENEFIT OF SECTION 80 P OF THE ACT. 9. BE AS IT MAY, WE FAIL TO UNDERSTAND HOW THE REVENUE AUTHORITIES CAN ALLEGE THAT THE ASSESSEE HAS FILED INACCURATE PARTI CULARS OF THE INCOME. THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 SQUAR ELY APPLY ON THE FACTS OF THE PRESENT CASE AND THE SAME READS AS UND ER:- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INOCME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY , THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORK PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PEN ALTY, UNLESS THE CASE IS STRICTLY ITA NO.560/A HD/2014 . A.Y. 2008-09 4 COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAM OUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THA T EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EX ACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THE RE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 10. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE H ONBLE SUPREME COURT (SUPRA), WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALTY OF RS. 14,32, 215/- LEVIED U/S. 271(1)(C) OF THE ACT. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 05 - 09- 20 16. SD/- SD/- (R.P. TOLANI) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT.