ACIT, New Delhi V. M/s. Rockwell Automation India Pvt. Ltd., Delhi

ITA 6039/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5982 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 25-11-2016
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.6039/DEL/2016 ASSESSMENT YEAR: 2008-09 ACIT, CIRCLE-21(2), NEW DELHI. V. ROCKWELL AUTOMATION INDIA PVT. LTD., 131, FUNCTIONAL INDUSTRIAL ESTATE, PATPARGANJ, DELHI. TAN/PAN: AACCR 3791A (APPELLANT) (RESPONDENT) CO NO.97/DEL/2019 ASSESSMENT YEAR: 2008-09 ROCKWELL AUTOMATION INDIA PVT. LTD., 131, FUNCTIONAL INDUSTRIAL ESTATE, PATPARGANJ, DELHI. V. ACIT, CIRCLE-21(2), NEW DELHI. TAN/PAN: AACCR 3791A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SURENDER PAL, SR.D.R. RESPONDENT BY: SHRI K.M. MEHTA, CA DATE OF HEARING: 31 07 2019 DATE OF PRONOUNCEMENT: 31 07 2019 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE AGAINST THE IMPUGNE D ORDER DATED 28.09.2016, PASSED BY LD. COMMISSIONER OF INC OME TAX (APPEALS)-XXXVI, NEW DELHI IN RELATION TO THE PENAL TY I.T.A. NO.6039/DEL/2016 & CO NO.97/DEL/2019 2 PROCEEDINGS U/S.271(1)(C) FOR THE ASSESSMENT YEAR 2 008-09. THE REVENUE HAS CHALLENGED THE DELETION OF PENALTY OF RS.1,28,28,500/-. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSE HAD DEBI TED SUM OF RS.4,00,17,141/- ON ACCOUNT OF LEASEHOLD IMPROVEMENTS. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSE WAS ASKED TO JUSTIFY ALLOWABILITY OF 10 0% DEPRECIATION CLAIMED ON LEASEHOLD IMPROVEMENT. IN R ESPONSE IT WAS SUBMITTED THAT THE ASSESSE HAD INCURRED LEAS EHOLD EXPENDITURE IN THE NATURE OF INTERIOR AND ELECTRICA L WORKS IN LEASEHOLD OFFICE PREMISES. THE ASSESSEE CLAIMED THE SAID EXPENDITURE AS REVENUE IN NATURE AS THE COMPANY DID NOT OBTAIN ANY ENDURING BENEFIT AND SUCH EXPENSES WERE NOT IN THE NATURE OF CAPITAL EXPENSES. THE NATURE OF THESE EXPENDITURE IS OF REPAIRS OF INTERNAL LAYOUTS SUCH AS REPAIRING OF FLOORS, PLASTERING & PAINTING OF WALLS, REDOING OF ROOF PLASTERING & FALSE CEILING, AND TO IMPROVE THE INTE RNAL AESTHETICS AND AMBIENCE OF OFFICE PREMISES TAKEN ON RENT, SO THAT BUSINESS OFFICE SPACE BECOMES WORTHY OF BUSINE SS OCCUPANCY AND THEREBY PROVIDE SAFETY & PROPER WORKI NG CONDITION FOR EMPLOYEES. SUCH EXPENDITURE DOES NOT FALL WITHIN THE MEANING OF CAPITAL EXPENDITURE. THE DETA ILS OF LEASEHOLD IMPROVEMENTS DURING THE YEAR WERE FURNISH ED. AFTER CONSIDERING THE ENDURING BENEFIT AND THAT IMPROVEME NTS WERE ADDITION TO ASSET, THE EXPENDITURE WAS TREATED BY T HE AO AS CAPITAL EXPENDITURE AND DEPRECIATION WAS GRANTED @ 10% ON RS.54,86,620/- AND 5% ON RS.3,45,30,521/- WHICH COM ES TO I.T.A. NO.6039/DEL/2016 & CO NO.97/DEL/2019 3 RS.5,48,662/- AND RS.17,26,526/-, RESPECTIVELY. HEN CE, DEPRECIATION AMOUNTING TO RS.22,75,188/- WAS ALLOWE D AND ADDITION OF REMAINING RS.3,77,41,953/- WAS MADE. FO R THE ABOVE DISALLOWANCES MADE, THE PENALTY PROCEEDINGS U /S. 271(1)(C) WERE INITIATED. THE SAID ADDITION HOWEVER STOOD CONFIRMED BY THE ITAT. 3. BEFORE THE LD. CIT (A) IT WAS SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07, PRECISELY ON THE SAME ISSUE ON ACCOUNT OF SIMILAR ADDITION OF LEASEHOLD IMPROVEMENT WHICH WAS CLAIMED AS REVENUE EXPENDITURE AND TREATED AS CAPITAL IN NATUR E BY THE ASSESSING OFFICER HAS DELETED THE SAID PENALTY. LD. CIT (A) FOLLOWING THE SAID ORDER OF THE TRIBUNAL DATED 27.0 7.2012 HAS DELETED THE PENALTY. 4. AFTER HEARING BOTH THE PARTIES, WE FIND THAT PRE CISELY ON THE SAME REASONING PENALTY HAS BEEN DELETED IN A SSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 BY THE TRI BUNAL IN THE FOLLOWING MANNER: WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT ASSESSEE HAD FURNISHED ALL THE PARTICULA RS OF INCOME AND SPECIFICALLY TO COVER UP THE POINT OF RE VENUE OR CAPITAL EXPENDITURE, THE ASSESSEE VIDE POINT NO.9 O F NOTES TO COMPUTATION OF INCOME HAD BROUGHT THE FACT BEFORE A O. THE EXPENDITURE CLAIMED BY THE ASSESSEE AS REVENUE EXPE NDITURE AND HELD BY AO AS CAPITAL EXPENDITURE IS A MATTER O F OPINION AND COURTS HAD GIVEN DIFFERENT OPINIONS IN RESPECT OF SUCH I.T.A. NO.6039/DEL/2016 & CO NO.97/DEL/2019 4 ITEMS AT DIFFERENT OPINIONS IN RESPECT OF SUCH ITEM S AT DIFFERENT TIMES. SO WE CAN SAY WITH CERTAINLY THAT EXPENSES C LAIMED BY THE ASSESSEE AS REVENUE EXPENDITURE WAS BASED UPON THE NATURE OF EXPENSES AND ASSESSEE HAD RELIED UPON VAR IOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF ITS CLAIM AND FROM ANY ANGLE IT CANNOT BE SAID THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. THE FACTS OF THE CASE LAW RELIED UPON BY CIT(A) RELATING TO CIT V. ZOOM COMMU NICATION PVT. LTD. (SUPRA) ARE NOT COMPARABLE WITH THE FACTS OF PRESENT CASE AS IN THAT CASE THERE WAS NO DIFFERENCE OF OPI NION WITH REGARD TO AMOUNTS DEBITED BY THE ASSESSEE IN ITS P& L A/C WHICH WERE INCOME TAX & EQUIPMENT WRITTEN OFF AND W HICH WERE NOT CLEARLY ALLOWABLE WHEREAS IN THE PRESENT C ASE IT WAS A CLEAR CASE OF DIFFERENCE OF OPINION WITH RESPECT TO CLAIM OF ASSESSEE. MERE NON FILING OF APPEAL BY ASSESSEE AGA INST THE ADDITIONS MADE BY AO CANNOT BE SAID TO BE ADMISSION BY ASSESSEE OF HAVING SUBMITTED WRONG CLAIM. IN VIEW O F THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT PENALT Y IMPOSED BY AO AND UPHELD BY THE LD. CIT (A) IS NOT JUSTIFIE D. 5. SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, FOLLOWING THE SAME PRECE DENCE, WE CONFIRM THE DELETION OF PENALTY AND ACCORDINGLY, RE VENUES APPEAL IS DISMISSED. 6. IN CROSS OBJECTION, THE ASSESSE HAS CHALLENGED T HE PENALTY ON TECHNICAL GROUNDS THAT ASSESSING OFFICER IN THE SHOW-CAUSE NOTICE HAS NOT SPECIFIED THE CHARGE UNDE R WHICH LIMB HE IS INITIATING PENALTY PROCEEDINGS. SINCE HE HAS ALREADY DELETED THE PENALTY, THEREFORE, THE GROUNDS RAISED IN THE CROSS I.T.A. NO.6039/DEL/2016 & CO NO.97/DEL/2019 5 OBJECTION HAVE BECOME PURELY ACADEMIC AND SAME IS T REATED AS INFRUCTUOUS. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTION OF THE ASSESSE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2019. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST JULY, 2019 PKK