ASST CIT CIR 6(1), MUMBAI V. BALKRISHNA INDUSTRIES LTD, MUMBAI

ITA 5858/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9702 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 03-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT & SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5858/MUM/2013 ASSESSMENT YEAR : 2005 06 ASSISTANT CIT, CIRCLE 6(1) MUMBAI VS. BALKRISHNA INDUSTRIES LTD 418, CREATIVE INDL. ESTATE, SITARAM MILL COMPOUND, 72 N M JOSHI MARG, MUMBAI 400 011 PAN AAACB3333J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUMAN KUMAR RESPONDENT BY : SHRI RAJESH P SHAH DATE OF HEARING : 12.09 .2017 DATE OF PRONOUNCEMENT : 12 .0 9 .2017 O R D E R PER P K BANSAL, VICE-PRESIDENT: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) 14, MUMBAI, DATED 18.07.2013, FOR A.Y.2005 -06, WHEREBY THE CIT(A) HAS DELETED THE PENALTY LEVIED ON THE ASSESS EE U/S. 271(1)(C) OF THE I.T.ACT. 2. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING TH ROUGH THE ORDERS OF THE TAX AUTHORITIES BELOW, WE NOTED THAT IN THIS CASE, THE ASSESSING OFFICER LEVIED PENALTY ON THE ASSESSEE AMOUNTING TO ` 50,12,798/- FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS THE ASSESSEE HA S CLAIMED DEDUCTION IN ITA NO.5858/MUM/2013 BALKRISHNA INDUSTRIES LTD 2 RESPECT OF DEPRECIATION ON TRANSFORMERS AND BOILERS . ON APPEAL THE CIT(A) CONFIRMED THE DISALLOWANCE BUT DELETED THE PENALTY LEVIED ON THE ASSESSEE U/S. 271(1)(C) BY RELYING ON THE DECISION OF HONBL E BOMBAY HIGH COURT IN THE CASE OF SOMANY EVERGREEN KNITS LTD. IN ITA NO.1332 OF 2011 DATED 21.03.2013. THE LEARNED CIT(A) HAS OBSERVED AS UND ER: 10. FACTS OF THE CASE, ORDER OF THE AO AND SUBMISS ION OF THE LD. AR AND VARIOUS JUDICIAL PRONOUNCEMENTS HAVE BEEN CO NSIDERED CAREFULLY. IT IS NOT IN DISPUTE THAT THE ADDITION MADE IS LEGAL IN NATURE. THEREFORE THE ADDITION MADE DOES NOT TANTA MOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANYTHING ON RECORD TO SAY THAT ASSESSEES EXPLANATION LACKS BON AFIDES. THEREFORE, THIS IS A CASE, IN MY CONSIDERED OPINION , WHERE PENALTY FOR CONCEALMENT U/S. 271(1)(C) OF THE ACT CANNOT BE LEVIED. HENCE, PENALTY LEVIED OF ` 1,50,38,394 IS HEREBY DIRECTED TO BE DELETED. 3. BEFORE US THE LEARNED DR VEHEMENTLY CONTENDED TH AT THE ASSESSEE HAS CLAIMED DEPRECIATION AS IT HAD PURCHASED THE TRANSF ORMER ON 31.01.2005, IN SUPPORT OF WHICH IT FILED THE INVOICE OF THE SUPPLI ER BUT FAILED TO PRODUCE THE DELIVERY CHALLAN. EVEN DURING THE ASSESSMENT PROCE EDINGS THE ASSESSEE DID NOT PRODUCE THE DELIVERY CHALLANS THOUGH THE ASSESS ING OFFICER HAD CALLED FOR PRODUCTION OF THE SAME. THIS IMPLIES THAT THE TRAN SFORMER WAS NOT AT ALL DELIVERED IN THE PREMISES OF THE ASSESSEE BEFORE 31 .03.2015 AND AS SUCH THE ASSESSEE HAS FILED INACCURATE PARTICULARS BY CLAIMI NG DEPRECIATION ON SUCH TRANSFORMER, WHICH ATTRACTS PENALTY U/S. 271(1)(C) OF THE I.T.ACT. 4. THE LEARNED AR, ON THE OTHER HAND, SUBMITTED COP Y OF THE PAPER-BOOK FILED BEFORE THE TRIBUNAL IN ITA NO.3163/MUM/2010 R ELATING TO THE QUANTUM ITA NO.5858/MUM/2013 BALKRISHNA INDUSTRIES LTD 3 PROCEEDINGS AND DREW OUR ATTENTION TO PAGES 28 PA GE 31 THEREOF. HE CONTENDED THAT THE ASSESSEE HAS NOT ONLY FILED THE COPY OF INVOICE BUT ALSO THE COPY OF THE DELIVERY CHALLAN, WHICH WE ALSO PER USED. WE ALSO NOTED THAT THIS TRIBUNAL WHILE DEALING THE QUANTUM APPEAL, VID E ITS ORDER DATED 13.06.2013, HAS OBSERVED AS UNDER: 7. WE HAVE PERUSED THE RECORDS AND CONSIDERED MATT ER CAREFULLY. THE DISPUTE RAISED IS REGARDING ALLOWAB ILITY OF DEPRECIATION IN CASE OF TRANSFORMER AND BOILERS. I N CASE OF TRANSFORMER THE ASSESSEE CLAIMED INSTALLATION AND U SE ON 30.3.2005. HOWEVER, THE TRANSFORMER HAD BEEN TAKEN ON LOAN ON 26.8.2005 I.E. IN THE NEXT. THEREFORE, IN OUR OPINION DISALLOWANC E OF DEPRECIATION IN THIS YEAR IS JUSTIFIED. HOWEVER, AO WILL ALLOW DEPRECIATION IN THE NEXT YEAR ON THE ACTUAL COST OF TRANSFORMER WITHOUT DEDUCTING ANY DEPRECIATION CLAIMED BY THE ASSESSEE IN THIS YEAR I N THE BOOKS. SIMILAR IN THE CASE OF THE TRANSFORMER WHICH CAME T O BE INSTALLED AND PUT TO USE ON 31.3.2005. THE DISALLOWANCE OF D EPRECIATION IN THIS YEAR IS CONFIRMED BUT IN THE NEXT YEAR AO WILL COMPUTE THE DEPRECIATION ON THE BASIS OF ACTUAL COST OF BOILER AND NOT ON THE BASIS OF WDV OF ASSET SHOWN BY ASSESSEE IN THE BOOK S. AS REGARD THE OTHER BOILER, CIT(A) HAS ALREADY ALLOWED DEPREC IATION AT THE RATE OF 50% WHICH IN OUR VIEW ON THE FACTS OF THE CASE I S JUSTIFIED. THE DISALLOWANCE OF DEPRECIATION IN THIS YEAR IS THEREF ORE UPHELD. 8. IN THE RESULT APPEAL OF ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. FROM THIS FINDING OF THE TRIBUNAL, IT IS APPARENT T HAT THE TRIBUNAL HAS DULY ACCEPTED THAT THE ASSESSEE GOT THE TRANSFORMER AND BOILERS DURING THE IMPUGNED ASSESSMENT YEAR. HOWEVER, THE TRANSFORMER HAD BEEN TAKEN ON LOAD ONLY ON 26.08.2005 I.E. IN THE NEXT ASSESSMENT YEAR. THEREFORE, THE TRIBUNAL CONFIRMED THE DISALLOWANCE OF DEPRECIATION DURING THE IMPUGNED ASSESSMENT YEAR AND DIRECTED THE ASSESSING OFFICER TO ALLOW DEPRECIATION TO ITA NO.5858/MUM/2013 BALKRISHNA INDUSTRIES LTD 4 THE ASSESSEE IN SUCCEEDING ASSESSMENT YEAR ON THE A CTUAL COST OF THE TRANSFORMER WITHOUT DEDUCTING ANY DEPRECIATION CLAI MED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. THIS FINDING OF THE TRIBUNAL ITSELF PROVES THAT IT IS NOT A CASE WHERE IT CAN BE SAID THAT THE ASSE SSEE HAS FILED INACCURATE PARTICULARS OF ITS INCOME BUT IT IS A CASE WHERE TH E ASSESSEE HAS MADE A CLAIM ON THE BASIS OF THE EVIDENCE FILED BY IT AND THE CL AIM HAS NOT BEEN ACCEPTED. NON-ACCEPTANCE OF THE CLAIM, IN OUR OPINION, CANNOT BE REGARDED TO BE A CASE WHERE THE ASSESSEE HAS FILED INACCURATE PARTICULARS FOR PENALTY TO BE LEVIED. HOBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANC E PETROPRODUCTS PVT. LTD. 322 ITR 158 (SC) HAS CLEARLY LAID DOWN THAT A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOU NT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTI CULARS. IN OUR OPINION, THE CASE OF THE ASSESSEE IS DULY COVERED BY THE SAID DE CISION OF THE HONBLE SUPREME COURT, THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A) DELEING THE PENALTY LEVIED BY THE ASSESSING OFFICER. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (PAWAN SINGH) (P K BANSAL) JUDICIAL MEMBER VICE-PRESIDENT MUMBAI; DATED: 14 TH SEPTEMBER, 2017 SA ITA NO.5858/MUM/2013 BALKRISHNA INDUSTRIES LTD 5 COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, B BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI