ACIT 8(3), MUMBAI V. UNIVERSAL SOMPO GENERAL INSURANCE CO. LTD, MUMBAI

ITA 6226/MUM/2012

• Counselvise Citation: 622619914 RSA 2012
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 02-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAM BH VIT MISHRA
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) .. , , ./I.T.A. NO.6226/MUM/2012 ( ! / ASSESSMENT YEAR : 2008-09) ASSISTANT COMMISSIONER OF INCOME TAX 8(3), ROOM NO.217, AAYAKAR BHAVAN, M K MARG, MUMBAI-400020. / VS. M/S UNIVERSAL SOMPO GENEREAL INSURANCE COMPANY LTD., A-201,208, CRYSTAL PLAZA, 2 ND FLOOR, OPP INFINITY MALL, OSHIWARA ROAD, ANDHERI (W), MUMBAI-400058 ( '# / APPELLANT) .. ( $%'# / RESPONDENT) ' ./ & ./PAN/GIR NO. : AAACU8917F '# ' / APPELLANT BY : SHRI SAM BH VIT MISHRA $ %'# ( ' /RESPONDENT BY : SHRI K SHIVRAM ) * ( +, / DATE OF HEARING : 28.7.2014 -.! ( +, /DATE OF PRONOUNCEMENT : 28..8.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 26.07.2012 PASSED BY LD CIT(A)-18, MUMBAI AND IT RE LATES TO THE ASSESSMENT YEAR 2008-09. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT( A) IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 2. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE ASSESSING OFFICER HAS LEVIED PENALTY U/S 2 71(1)(C) OF THE ACT ON THE AMOUNT OF DEPRECIATION DISALLOWED BY HIM. THE ASSE SSEE HEREIN IS ENGAGED IN THE BUSINESS OF GENERAL INSURANCE. THE ASSESSEE TO OK A BUILDING ON LEASE AND I.T.A. NO.6226/MUM/2012 2 INCURRED A SUM OF RS.97.78 LAKHS ON IMPROVEMENT OF THE SAID BUILDING TO SUIT ITS REQUIREMENTS. IT CLAIMED DEPRECIATION ON THE EXPEN SES INCURRED ON IMPROVEMENT @ 100%. IN THE ASSESSMENT PROCEEDINGS, THE AO DID NOT ACCEPT THE SAID CLAIM AND ACCORDINGLY REDUCED THE ALLOWABLE AMOUNT OF DEP RECIATION TO 10%. ACCORDINGLY, THE DEPRECIATION ALLOWABLE TO THE ASSE SSEE, AS PER THE PROVISIONS OF THE ACT, WAS WORKED OUT TO RS.4,88,945/- AND ACCORD INGLY, THE AO DISALLOWED EXCESS DEPRECIATION CLAIM OF RS.92,89,958/-. IN TH E PENALTY PROCEEDINGS, THE AO LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON THE ABOV E SAID DISALLOWANCE. IN THE APPEAL FILED BY THE ASSESSEE, THE LD CIT(A) DELETED THE PENALTY BY FOLLOWING THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE C ASE OF RELIANCE PETRO PRODUCTS LTD [2010] 322 ITR 158 (SC) 3. FROM THE RECORD, WE NOTICE THAT THE ASSESSEE HAD MADE THE CLAIM OF DEPRECIATION ON THE IMPROVEMENTS MADE ON LEASE HOLD PREMISES AT 100% BY PLACING RELIANCE ON THE FOLLOWING CASE LAW:- (A) CIT VS. HI LINES PENS (P) LTD 306 ITR 182 (D ELHI) (B) DCIT & ORS. VS. EDS ELECTRONICS DATA SYSTEMS ( INDIA) P LTD (26 SOT 483)(DELHI). (C) ACIT VS. RABO INDIA FINANCE (P) LTD 3 ITTR 793 (MUM) (D) GLAXO SMITHKLINE CONSUMER HEALTH CARE LTD VS. ACIT (112 TTJ (CHD) 94) HOWEVER, WHEN IT CAME TO KNOW THAT THE AO IS NOT AC CEPTING THE SAID CLAIM, THE ASSESSEE CAME FORWARD TO AGREE WITH THE PROPOSITION OF THE ASSESSING OFFICER. ACCORDINGLY, THE ASSESSEE HAS FILED REVISED THE RET URN OF INCOME FOR THE SUCCEEDING YEAR ALSO BY REVISING THE DEPRECIATION C LAIM TO 10% FROM 100%. 4. WE NOTICE THAT THE LD CIT(A) HAS DELETED THE PE NALTY BY PLACING RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF RELIANCE PETRO PRODUCTS I.T.A. NO.6226/MUM/2012 3 (SUPRA), WHEREIN IT HAS HELD THAT THE CLAIMS MADE B Y THE ASSESSEE WHICH ARE NOT SUSTAINABLE IN LAW SHALL NOT GIVE RISE TO PENALTY. IN THE INSTANT CASE, WE HAVE ALREADY NOTICED THAT THE ASSESSEE HAS EXPLAINED THE REASONS AND ALSO THE AUTHORITY WHICH PERSUADED IT TO CLAIM DEPRECIATION AT 100% ON THE EXPENSES INCURRED ON IMPROVEMENT OF LEASEHOLD PREMISES. THU S, IT IS SEEN THAT THE SAID EXPLANATION WAS A BONAFIDE ONE AND THE ASSESSING OF FICER DID NOT FIND FAULT WITH IT. HENCE, IN OUR VIEW, THE SAID CLAIM FALLS IN TH E CATEGORY MENTIONED BY HONBLE SUPREME COURT IN THE ABOVE CITED CASE. FURTHER, IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS CONCEALED T HE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDI NGLY, IN OUR VIEW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT, BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT, RE FERRED ABOVE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENU E IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COUR T ON 28TH AUG, 2014 . -.! ) /0 1 2 28 TH AUG, 2014 . ( * 3 SD SD ( /SANJAY GARG) ( .. / B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / ) * MUMBAI: 28TH AUG,2014. . . ./ SRL , SR. PS I.T.A. NO.6226/MUM/2012 4 ! '#$%& '&($ / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. ) 8+ ( ) / THE CIT(A)- CONCERNED 4. ) 8+ / CIT CONCERNED 5. 9 : $+ ; , , ; , / ) * / DR, ITAT, MUMBAI CONCERNED 6. < * / GUARD FILE. = ) / BY ORDER, TRUE COPY > (ASSTT. REGISTRAR) , ; , / ) * /ITAT, MUMBAI