M/s. Active Print Pack (P) Ltd., New Delhi V. ACIT, New Delhi

ITA 6279/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4013 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 27-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-6279/DEL/2015 ( ASSESSMENT YEAR: 2009-10) ACTIVE PRINT PACK (P) LTD. 23/5, KALA BHAWAN, SHAKTI NAGAR, NEW DELHI. AABCT5077A VS ACIT CENTRAL CIRCLE 5, NEW DELHI. ASSESSEE BY SH. VINOD KUMAR BINDAL, CA MS. SWEETY KOTHARI, CA REVENUE BY SH. ARUN KUMAR YADAV, SR. DR ORDER PER SHRI K.N. CHARY, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS CHALLENGING THE ORDE R DATED 09.10.2015 IN APPEAL NO. 213/15-16 PASSED BY THE LD . COMMISSIONER OF INCOME TAX (APPEALS)-23, NEW DELHI (HEREINAFTER FOR SHORT CALLED AS THE LD. CIT (A)) ON THE FOLLO WING GROUNDS: 1. THAT LD. APPELLATE AUTHORITY ERRED IN LAW AND ON F ACTS IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C ) OF RS . 2,54,517/- FOR FURNISHING INACCURATE PARTICULARS OF THE CLAIM OF DEPRECIATION ON ASSETS MADE FOR FULL YEAR, BUT WHIC H WAS RESTRICTED TO 180 DAYS IN THE QUANTUM PROCEEDINGS, THOUGH IT DATE OF HEARING 19.09.2017 DATE OF PRONOUNCEMENT 09.10.2017 2 ITA NO. 6279/DEL/2015 HAD BEEN MADE A BONA FIDE BELIEF. THUS, THE PENALT Y SHOULD BE DELETED. 2. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTITUTE, MODIFY, DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 2. BRIEFLY STATED FACTS ARE THAT PURSUANT TO THE SE ARCH AND SEIZURE OPERATIONS CONDUCTED ON 31.07.2008 IN RAJDA RBAR GROUP OF CASES AND NOTICE U/S 153C OF THE INCOME TAX ACT, 19 61 (FOR SHORT CALLED AS THE ACT), ASSESSEE FILED THE RETURN OF INCOME ON 29.09.2009 DECLARING A LOSS OF RS. 26,18,540/- AND THE ASSESSMENT U/S 143(3) READ WITH 153C OF THE ACT WAS COMPLETED ON 13.12.2010 MAKING AN ADDITION OF RS. 7,64,318/- ON ACCOUNT OF PART DISALLOWANCE OF CLAIM OF DEPRECIATION, ON THE GROUND THAT THE PLANT AND MACHINERY WAS OPERATIONAL W.E.F. JANUARY, 2009 ONLY, BUT THE ASSESSEE CLAIMED DEPRECIATION AT FULL RATE SHOWING IT TO BE MORE THAN 180 DAYS. IT IS RELEVANT TO NOTE THAT AS SESSEE CLAIMS THAT THE TRIAL PRODUCTION WAS STARTED ON 23.07.2008 THOUGH THE PLANT HAS BECOME FULLY OPERATIONAL IN JANUARY, 2009 . SIMULTANEOUSLY THE AO INITIATED PROCEEDINGS U/S 271 (1)(C ) OF THE ACT AND CONCLUDED THEM WITH LEVY OF PENALTY OF RS. 2,54,600/-. THE SAME WAS CHALLENGED BEFORE THE LD. CIT (A) IN A PPEAL BUT THE LD. CIT (A) HELD THAT FOR THE PURPOSE OF DEPRECIATI ON U/S 32 OF THE 3 ITA NO. 6279/DEL/2015 ACT READ WITH RULE 5 OF THE RULES, THE DATE OF THE PLANT BEING PUT TO USE SHALL BE RECKONED FROM THE DATE OF FULL OPERATI ON OF THE PLANT AND MACHINERY AND THERE IS NO EVIDENCE TO SHOW THAT THERE WAS A TRIAL PRODUCTION ON 23.07.2008. HENCE, THIS APPEAL BY THE ASSESSEE. 3. IT IS THE ARGUMENT OF THE LD. AR THAT THERE IS A CERTIFICATE ISSUED BY M/S THERMAX LTD. CERTIFYING THAT THERMIC FLUID HEATER HAS BEEN SUCCESSFULLY COMMISSIONED AND HANDED OVER BY COMMERCIAL PRODUCTION BY THE AUTHORIZED SERVICED FR ANCHISEE M/S SUNMAX BOILER ENGINEERS ON 23.07.2008 AND THERE IS ALSO A PURCHASE BILL DATED 13.09.2008 TO SHOW THAT PLASTIC SHEET ROLLS (PLAIN), WAS ALSO PRODUCED BEFORE THE AUTHORITIES B ELOW BUT IN SPITE OF THE SAME, INSTEAD OF RECKONING THE DATE OF TRIAL PRODUCTION ON 23.07.2008 AS THE DATE WAS FIRST PUT TO USE, THE AU THORITIES HAVE RECKONED THE DATE OF THE PLANT BECOMING FULLY OPERA TIONAL IN JANUARY, 2009. HE SUBMITS THAT 180 DAYS WAS COMPLE TED IN THE AY 2009-10, AS SUCH, THE ASSESSEE IS ENTITLED TO TH E FULL RATE OF DEPRECIATION. BE THAT AS IT MAY, WHEN ALL THESE PA RTICULARS WERE PRODUCED BEFORE THE AUTHORITIES BELOW MERELY BECAUS E THERE WAS A 4 ITA NO. 6279/DEL/2015 DEBATABLE ISSUE ON THE ASPECT OF THE DATE OF THE FI RST USE OF THE PLANT MACHINERY NO PENALTY COULD BE FASTENED. PER CONTRA, LD. DR VEHEMENTLY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE PERUSED THE RECORD. THERE IS NO DISPUTE IN THIS MATTER THAT ALL THE PARTICULARS ARE FURNISHED TO TH E AUTHORITIES BELOW AT THE TIME OF FILING OF THE RETURN OF INCOME ITSELF. THERE IS NOTHING THAT WAS NOT PRODUCED BY THE ASSESSEE, WAS UNEARTHED BY THE DEPARTMENT BY WAY OF INVESTIGATION AT THE TIME OF FILING OF RETURN OF INCOME OR DURING THE ASSESSMENT PROCEEDIN GS. THE ENTIRE DISPUTE REVOLVES AROUND THE POINT AS TO THE DATE OF FIRST USE OF THE PLANT AND MACHINERY. MERELY BECAUSE A DIFFE RENT VIEW WAS TAKEN BY THE AUTHORITIES BELOW ON THAT ASPECT, IT C ANNOT BE SAID THAT THERE IS EITHER CONCEALMENT OF INCOME OR FURNI SHING OF INACCURATE PARTICULARS THEREOF. MERELY BECAUSE OF SOME DISALLOWANCE IN, THE ABSENCE OF THESE TWO INGREDIEN TS REQUIRED U/S 271(1)(C ) OF THE ACT NO PENALTY CAN BE IMPOSED. W RONG CLAIM CANNOT BE A BASIS FOR PENALTY. WHILE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN CIT VS. RELIA NCE PETRO PRODUCTS LTD. 322 ITR 158 (SC), WE HOLD THAT THE PE NALTY CANNOT 5 ITA NO. 6279/DEL/2015 BE SUSTAINED. WITH THIS VIEW OF THE MATTER, WE DIR ECT THE AO TO DELETE THE PENALTY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2017 SD/- SD/- (G.D. AGRAWAL) (K.N. CHARY) PRESIDENT JUDICIAL MEMBER DATED: 09.10.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI