PACE LABORATORIES LTD, MUMBAI V. ITO 8(2)(4, MUMBAI

ITA 6239/MUM/2012

• Counselvise Citation: 623919914 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 11-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHLIP
• Assessee Lawyers: GOVIND AGARWAL
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./ I.T.A. NO.6239/MUM/2012 ( / ASSESSMENT YEAR :2005-06) M/S PACE LABORATORIES LTD., 12-B-241/242, BACKBAY RECLAMATION , NARIMAN POINT, MUMBAI-400021. / VS. INCOME TAX OFFICER, 8(2)(4) 2 ND FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 ( / APPELLANT) .. ( ! / RESPONDENT) ./ #$ ./ PAN/GIRNO.:AAACP2235R % / ASSESSEE BY : SHRI GOVIND AGARWAL ! & % / RESPONDENT BY SHRI NEIL PHLIP. ' ( & ) * / DATE OF HEARING : 1.1.2015 +, & ) * /DATE OF PRONOUNCEMENT : 14.01.2015 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 12- 07-2012 PASSED BY LD CIT(A) CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR 2005-06. ITA NO.6239/MUM/2012 2 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E FACTS THAT LED TO LEVY OF PENALTY ARE THAT THE ASSESSING OFFICER, ON VERIFICATION OF THE DEPRECIATION CLAIMED BY THE ASSESSEE, NOTICED THAT THE ASSESSEE HAD PURCHASED A BUILDING COSTING RS.1.42 CRORES AND ALS O SOLD ANOTHER BUILDING FOR A SUM OF RS.1.18 CRORES AND THEY WERE ADDED/RED UCED FROM THE BLOCK OF ASSET OF BUILDING. THE ASSESSEE HAD CLAIMED DE PRECIATION OF RS.7,13,725/- ON THE CLOSING WDV OF RS.29,41,568/-, WHICH WAS ARRIVED AT AFTER MAKING THE ABOVE SAID ADDITION/DEDUCTION. TH E AO FURTHER NOTICED THAT THE ASSESSEE HAD NOT PUT THE NEW BUILDING ON U SE AND, ON POINTING OUT OF THE SAID FACT, THE ASSESSEE AGREED FOR DISAL LOWANCE OF DEPRECIATION OF RS.7,13,725/-. THE AO LEVIED PENALTY OF RS.2,6 1,170/- ON THE SAID DISALLOWANCE ON THE REASONING THAT THE OFFER MADE B Y THE ASSESSEE WAS NOT VOLUNTARY ONE, BUT A FORCED ONE. THE LD CIT(A) ALSO CONFIRMED THE PENALTY, APPARENTLY UNDER THE IMPRESSION THAT THE A SSESSEE HAD SOLD OFF ENTIRE BLOCK DURING THE YEAR. 3. THERE SHOULD NOT BE ANY DISPUTE THAT THE QUEST ION WHETHER THE CONDITION OF USAGE OF ASSET FOR THE PURPOSE OF BUS INESS IS RELEVANT OR NOT AFTER THE ASSET HAS ENTERED THE BLOCK IS A DEBATABL E QUESTION. EVEN THOUGH THE ASSESSEE HAD AGREED FOR DISALLOWANCE OF THE DEPRECIATION ON THE BLOCK OF ASSET OF BUILDING, YET THE CLAIM OF DEPRECIATION PUT FORTH BY THE ASSESSEE CANNOT BE CONSIDERED AS ALTOGETHER WRO NG CLAIM IN VIEW OF THE DEBATABLE NATURE OF THE CLAIM. IT IS WELL SETT LED PROPOSITION THAT THE PENALTY U/S 271(1)(C) OF THE ACT SHALL NOT LIE ON D EBATABLE CLAIMS. ACCORDINGLY, WE ARE UNABLE TO AGREE WITH THE ORDERS PASSED BY LD CIT(A). ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AN D DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY. ITA NO.6239/MUM/2012 3 4. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14TH JAN,2015. +, ' - ./ 0 1 14 TH JAN 2015 , & 2( 3 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER . ' ( MUMBAI: 14 TH JAN, 2015. . . ./ SRL , SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. ' 7) ( ) / THE CIT(A)- CONCERNED 4. ' 7) / CIT CONCERNED 5. 6. 89 2 ): , * : , . ' ( / DR, ITAT, MUMBAI CONCERNED 2 ; < ( / GUARD FILE. = ' / BY ORDER, TRUE COPY > # (ASSTT. REGISTRAR) * : , . ' ( /ITAT, MUMBAI