EVERBLUE APPAREL LTD, MUMBAI V. DCIT 2(1), MUMBAI

ITA 5618/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93199 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 04-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR D R
• Keywords: Depreciation

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI A.D. JAIN, JM AND SHRI N.K. BILLAIYA, A M .. , . . , ./ I.T.A. NO. 5618 /MUM/2013 ( / ASSESSMENT YEAR : 2006-07 EVERBLUE APPAREL LIMITED, NEW HIND HOUSE, NAROTTAM MORARJEE MARG, BALLARD ESTATE, MUMBAI 400 001. / VS. THE DY. COMMISSIONER OF INCOME TAX (2)(1), AAYAKAR BHAVAN, M.K. ROAD, 5 TH FLOOR, MUMBAI 400 020. ./ PAN : AABCR4194C ( ! / APPELLANT ) .. ( '# ! / RESPONDENT ) A PPELLANT BY SHRI NITESH JOSHI R E SPONDENT BY : SHRI C.W. ANGOLKAR (D.R.) $ % & ' ( ) / DATE OF HEARING : 15-07-2015 *+,- ' ( ) / DATE OF PRONOUNCEMENT : 15-07-2015 [ . / O R D E R PER A.D. JAIN, J.M . : .. , THIS IS ASSESSEES APPEAL FOR A.Y. 2006-07, AGAINST THE ACTION OF THE LD. CIT(A) IN UPHOLDING THE LEVY OF CONCEALMENT PENALTY OF RS. 1 LAC. 2. AS PER THE ASSESSMENT ORDER DATED 29-12-2008, EX CESSIVE DEPRECIATION CLAIMED BY THE ASSESSEE COMPANY IN ITS HELIPAD WAS DISALLOWED ON THE BASIS THAT THE ASSESSEE HAD NOT PUT THE HELIPAD TO BUSINE SS USE DURING THE YEAR. THIS DISALLOWANCE WAS CONFIRMED UP TO THE SECOND AP PELLATE STAGE BEFORE THE TRIBUNAL. THE ASSESSEE DID NOT PREFER ANY FURTHER APPEAL. ITA 5618/M/13 2 3. IN THE PENALTY PROCEEDINGS, IT WAS HELD THAT THE ASSESSEE HAD CONCEALED ITS INCOME WHILE FURNISHING INACCURATE PARTICULARS THEREOF. THE MINIMUM PENALTY LEVIABLE ON THE EXCESSIVE CLAIM OF DEPRECIA TION AMOUNTING TO RS. 2,49,396/- WAS CALCULATED AT RS. 83,123/-. HOWEVER , THE PENALTY OF RS. 1 LAC WAS ULTIMATELY LEVIED ON THE ASSESSEE. BY VIRTUE O F THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE LEVY OF PENALTY. 4. BEFORE US, ON BEHALF OF THE ASSESSEE, IT HAS BEE N CONTENDED THAT THE ASSESSEE HAS NEITHER CONCEALED ITS INCOME, NOR HAS FURNISHED ANY INACCURATE PARTICULAR THEREOF. THE CLAIM FOR DEPRECIATION ON THE HELIPAD WAS DISALLOWED AND THIS DISALLOWANCE WAS CONFIRMED UP TO THE STAGE OF THE TRIBUNAL. THE MATTER RESTS THERE, SINCE THE ASSESSEE DID NOT FILE ANY FURTHER APPEAL. THE DISALLOWANCE WAS ORDERED, SINCE THE ASSESSEE FAILED TO ADDUCE ANY EVIDENCE TO SUBSTANTIATE ITS CLAIM OF DEPRECIATION BY ESTABLISH ING THAT THE HELIPAD WAS USED BY THE ASSESSEE FOR ITS BUSINESS PURPOSES DURI NG THE YEAR UNDER CONSIDERATION. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT IT IS ON RECORD THAT THE HELIPAD WAS USED DURING THE YEAR, O N 24/25 TH JULY, 2005; THAT M/S SILVER SPARK APPAREL LTD., A FELLOW SUBSIDIARY OF THE ASSESSEE COMPANY, HAD HIRED THE SERVICES OF M/S DECCAN AVIATION ON TH ESE DATES AND A HELICOPTER WAS USED AT THE FACTORY PREMISES, ON THE HELIPAD IN QUESTION; THAT COPIES OF THE BILL RAISED BY M/S DECCAN AVIATION, BILL NO. DA PL/43/2005-06, DATED 26 TH JULY, 2005, FOR HELICOPTER CHARGES AND HELIPAD ACTI VATION CHARGES, (ASSESSEES PAPER BOOK PAGE NO. 4), CONFIRMATION FROM M/S DECCA N AVIATION REGARDING HIRING AND LANDING OF HELICOPTER AT HELIPAD ON 24 TH /25 TH JULY, 2005, (ASSESSEES PAPER BOOK PAGE NO. 5), ADVANCE RECEIPT FROM BANGALORE FIRE BRIGADE FOR ARRANGING A FIRE TENDER, FOR STANDBY OF A FIRE TENDER IN CONNECTION WITH THE ARRIVAL AND DEPARTURE OF THE HELICOPTER, ( ASSESASEES PAPER BOOK PAGE NOS. 6 & 7), RECEIPT FROM BANGALORE FIRE BRIGADE CO NFIRMING ARRANGEMENT OF A FIRE TENDER AT THE HELIPAD ON 24 TH /25 TH JULY, 2005 (ASSESSEES PAPER BOOK PAGE 7) WERE DULY SUBMITTED BEFORE THE LD. CIT(A) I N THE PENALTY APPEAL ITA 5618/M/13 3 PROCEEDINGS; THAT HOWEVER, THE LD. CIT(A) HAS ILLEG ALLY NOT TAKEN ANY OF THIS DOCUMENTARY EVIDENCE INTO CONSIDERATION. 5. THE LD. D.R., ON THE OTHER HAND, HAS PLACED STRO NG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT IT REMA IN UNDISPUTED THAT THE ASSESSEE COULD NOT ESTABLISH THE USE OF THE HELIPAD DURING THE YEAR UNDER CONSIDERATION AND, THEREFORE, SINCE THE EXCESSIVE C LAIM ON DEPRECIATION WAS DECLINED ON THIS VERY BASIS, WHICH DECISION OF WAS NEVER APPEALED AGAINST AFTER HAVING BEEN CONFIRMED BY THE TRIBUNAL, EVIDEN TLY THERE IS NO FORCE IN THE PRESENT PENALTY APPEAL OF THE ASSESSEE. 6. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. IT IS TRUE THAT THE CLAIM OF DEPRECIATION WAS DISALLOW ED AS EXCESSIVE. THIS DISALLOWANCE STANDS CONFIRMED UP TO THE STAGE OF TH E TRIBUNAL. THE ORDER OF THE TRIBUNAL HAS BEEN ACCEPTED BY THE ASSESSEE. HOW EVER, IT IS WELL SETTLED THAT PENALTY PROCEEDINGS ARE DIFFERENT FROM ASSESSM ENT PROCEEDINGS. CONCEALMENT/AND OR FURNISHING INACCURATE PARTICULAR S HAS TO BE ESTABLISHED BY THE DEPARTMENT INDEPENDENTLY. IN THE PRESENT CAS E, THE EVIDENCE BROUGHT ON RECORD BY THE ASSESEE, IN THE SHAPE OF INVOICE N O. DAPL/43/2005-06 DATED 26 TH JULY, 2005 OF M/S DECCAN AVIATION RAISED ON THE AS SESSEE IS REGARDING FLYING CHARGES OF THE HELICOPTER BELL 206 VT-DAK. THIS INVOICE OF RS. 4,50,834/- COMPRISES OF FERRY CHARGES, HYDERABAD-BA NGALORE-HYDERABAD (RS. 1 LAC), HELIPAD ACTIVATION, FUEL TRANSPORTATION AND OVERNIGHT CHARGES (RS. 21,500/-), BESIDES THE FLYING CHARGES FOR THE TWO D AYS. M/S DECCAN AVIATION HAVE TENDERED THEIR CONFIRMATION, WHICH READS AS UN DER:- THIS IS TO CERTIFY THAT OUR HELICOPTER BELL 206 V T - DAK' WAS HIRED BY SILVER SPARK APPAREL LTD. (A RAYMOND GROUP COMPANY) BANGALORE. THE HELICOPTER HAD LANDED AT THE HELIPAD AT EVERBLUE AP PAREL LTD, D1 & D2, APPAREL PARK, KIADB IND. AREA, DODDABALLAPUR, BANGA LORE 561 203 ON 24 & 25 JULY 2005. OUR INVOICE NO. DAPL/43/2005-06 DATED 26 - 07 - 2005 RAISED FOR RS. 4,50,834/- INCLUDES ABOVE HELIP AD ACTIVATION CHARGES OF RS. 21,500/-. ITA 5618/M/13 4 KINDLY GET IN TOUCH WITH THE UNDERSIGNED FOR ANY FU RTHER CLARIFICATION. IN ORDER TO FACILITATE THE LANDING AND TAKEOFF OF T HE HELICOPTER ON AND FROM THE HELIPAD IN QUESTION, ON 24/25 TH JULY, 2005, A FIRE TENDER WAS ARRANGED BY THE ASSESSEE FROM THE BANGALORE FIRE BRIGADE. THE ABOVE RECEIPT IN THIS CONCERN READS AS FOLLOWS:- RECEIVED A SUM OF RS. 5,000/- (RUPEES FIVE THOUSAN D ONLY) BEING THE STATUTORY CHARGES TOWARDS ARRANGEMENT OF STANDBY OF A 'FIRE TENDER' WITH STAFF FROM 24-07-2005 TO 25-07-2005 IN CONNECT ION WITH ARRIVAL & DEPARTURE OF AN HELICOPTER AT THE PREMISES OF EVER BLUE APPAREL LTD., PLOT NO. DL & D2, APPAREL PARK, KIADB INDUSTRIAL AR EA, DODDABALLAPURA SUBURB & TALUK, 3ANGALORE RURAL DISTRICT - 561203 F OR THE CONVEYANCE OF TO & FRO JOURNEY OF SHRI HARISINGHANIA, THE. CHAIR MAN OF RAYMONDS GROUP FROM MUMBAI TO DODDABALLAPURA IN FULL SETTLEM ENT. 7. IN VIEW OF THE ABOVE DOCUMENTARY EVIDENCE, THE ACTU AL USER OF THE HELIPAD IN QUESTION DURING THE YEAR UNDER CONSIDERA TION STANDS CLEARLY ESTABLISHED. THE LD. CIT(A) HAS ERRED IN NOT TAKING INTO CONSIDERATION ALL THESE EVIDENCES. THE IMPUGNED ORDER IS, THUS, A RESULT O F COMPLETE MISREADING AND NON READING OF MATERIAL COGENT DOCUMENTARY EVIDENCE BROUGHT ON RECORD. 8. IN VIEW OF THE ABOVE, WE DO NOT FIND THE PENALTY UNDER CONSIDERATION TO BE SUSTAINABLE IN THE EYE OF LAW. THE SAME IS, THE REFORE, CANCELLED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY, 2015 . ' *+,- $ /0 1 2 15-07-2015 + ' 3& SD/- SD/- (N.K. BILLAIYA) (A.D. JAIN ) ACCOUNTANT MEMBER /J UDICIAL MEMBER / $ & MUMBAI ; 1 DATED 22-07-2015 [ %.../ R.K. R.K. R.K. R.K. , SR. PS ITA 5618/M/13 5 ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $ E( () / THE CIT(A)- 32, MUMBAI 4. $ E( / CIT- CITY-= 21, MUMBAI 5. H%I 3 '(JK , ) JK- , / $ & / DR, ITAT, MUMBAI G BENCH 6. 3 L M & / GUARD FILE. ! ( / BY ORDER, # H( '( //TRUE COPY// )/(* + ( DY./ASSTT. 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