VIDIEO SILK MILLS P.LTD, MUMBAI V. ITO 4(3)(3), MUMBAI

ITA 6183/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3026 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 15-10-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 09-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Revision of order; Depreciation; Wrong claim
• Section: 143(3); 68; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND RAMLAL NEGI , (JM) ./ I.T.A. NO. 6183 AND 6184/ MUM/20 12 ( / ASSESSMENT YEAR : 2001 - 02 ) VIDEO SILK MILLS PVT LTD., PMC 124, SCOTTERS COLONY, OPP, DIVYA HOTEL, MALWANI GATE NO.6, MALAD (W), MUMBAI - 400095 / VS. INCOME TAX OFFICER 4(3)(3), MUMBAI. ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN : AABCV0359B / APPELLANT BY NONE / RSPONDENT BY SHRI CHANDIP SINGH / DATE OF HEARING : 1 5 .10 . 201 5 / DATE OF PRONOUNCEMENT : 15. 10 . 201 5 / O R D E R PER B.R. BASKARAN (AM) BOTH THE APPEALS FILED BY T HE ASSESSEE ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS PASSED BY LD CIT(A) - 9, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEAR 200 1 - 02. 2. THE APPEAL NO.6183/MUM/2012 RELATES T O THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 AND OTHER APPEAL RELATES TO THE QUANTUM ASSESSMENT PROCEEDINGS. NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THOUGH THE NOTICES WERE SENT TO THE ASSESSEE BY RPAD ON EARLIER THREE O CCASIONS. HENCE, WE PROCEED TO DISPOSE OF THE APPEAL EX - PARTE , WITHOUT THE PRESENCE OF THE ASSESSEE. ITA NO. 6183 AND 6184/ MUM/20 12 2 3. WE SHALL TAKE UP THE QUANTUM APPEAL FILED BY THE ASSESSEE FIRST. 3.1 WE HEARD THE LD. D R AND PERUSED THE RECORD. THE ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED U/S 143(3) OF THE ACT ON 31.7.2003 ACCEPTING THE RETURNED LOSS OF RS.7.04 LAKHS. SUBSEQUENTLY, THE LD. CIT(A) INITIATED REVISION PROCEEDINGS U/S 263 OF THE ACT AND PASSED THE ORDER WITH A DIRECTION TO THE AO TO VERIFY T HE DEPRECIATION CLAIM OF RS.2.54 LAKHS MADE BY THE ASSESSEE ON FACTORY BUILDING AND PLANT AND MACHINERY . THE ASSESSEE HAD DECLARED JOB WORK CHARGES OF RS.1.75 LAKHS AND HAD CLAIMED DEPRECIATION ON THE ASSETS. HOWEVER, BEFORE THE A O, THE ASSESSEE CHANGED THE STAND AND SUBMITTED THAT HIS FACTORY WAS LET OUT TO M/S RANISATI WEAVING WORKS. SINCE THE ASSESSEE COULD NOT PROVE THE CLAIM OF LEASING OUT OF THE FACTORY PREMISES BY PRODUCING ANY DOCUMENT, THE AO DISBELIEVED THE CLAIM OF LEA SING OUT OF THE FACTORY BUILDING. HENCE THE AO ASSESSED THE SUM OF RS.1.75 LAKHS , REFERRED ABOVE , AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. ACCORDINGLY, THE AO DISALLOWED THE DEPRECIATION OF RS.2.54 LAKHS CLAIMED BY THE ASSESSEE. THE AO ALSO LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON THE FALSE CLAIM OF DEPRECIATION ON THE GROUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME . 4. THE ASSESSEE FILED APPEALS CHALLENGING THE QUANTUM ASSESSMENT ORDER AS WELL AS PENALTY ORDER. HOWEVER, I N THE APPELLATE PROCEEDINGS , THE ASSESSEE DID NOT APPEAR BEFORE THE LD.CIT(A) AND HENCE THE FIRST APPELLATE AUTHORITY CONFIRMED THE DISALLOWANCE OF DEPRECIATION AS WELL AS PENALTY. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 5. WITH REGA RD TO THE CLAIM OF RECEIPT OF RS.1.75 LAKHS, WE NOTICE THAT THE ASSESSEE HAD INITIALLY DECLARED THE SAME AS JOB WORK CHARGES RECEIVED ITA NO. 6183 AND 6184/ MUM/20 12 3 BY IT . SUBSEQUENTLY, IT CHANGED THE STAND AND SUBMITTED THAT THE SAME REPRESENTS RENTAL INCOME. HOWEVER, THE ASSESSEE DID NOT FURNISH ANY DOCUMENT TO SHOW THAT ITS FACTORY BUILDING AND PLANT & MACHINERY HA D BEEN LEASED OUT. HENCE , THE AO WAS CONSTRAINED TO ASSESS THE SUM OF RS.1.75 LAKHS AS UN EXPLAINED CASH CREDIT. CONSEQUENT LY, THE AO HAS DISALLOWED THE DEPRECIATION CLAIM O F RS.2.54 LAKHS , SINCE THE SAME IS NOT ALLOWABLE AS DEDUCTION U/S 68 OF THE ACT. BEFORE THE LD. CIT(A) AS WELL AS BEFORE US, THE ASSESSEE DID NOT FURNISH ANY MATERIAL TO CONTRADICT THE FINDINGS GIVEN BY THE AO. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A) IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION AMOUNT. 6. WITH REGARD TO THE PENALTY LEVIED ON DISALLOWANCE OF DEPRECIATION, WE NOTICE THAT THE ASSESSEE HAD CLAIMED DEPRECIATION W ITH WRONG DECLARATION THAT INCOME OF RS.1.75 LAKHS REPR ESENTS JOB WORK CHARGES. THOUGH THE ASSESSEE HAS CHANGED ITS STAND AT TIME OF ASSESSMENT PROCEEDINGS WITH REGARD TO THE NATURE OF RECEIPT OF RS.1.75 LAKHS, YET IT COULD NOT PROVE THAT THE SAME REPRESENTS RENTAL INCOME. THUS, THE ASSESSEE HAS CLAIMED DEPRE CIATION BY FURNISHING INACCURATE PARTICULARS OF INCOME. HENCE, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 7 . IN THE RESULT, BOTH THE APPEAL S FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 15TH OCT , 2015. 15TH OCT , 2015 SD SD ( RAMLAL NEGI ) ( B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 15TH OCT , 2015 . ITA NO. 6183 AND 6184/ MUM/20 12 4 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI