Shri Ravi Bafna, Indore V. The ACIT., Indore

ITA 64/IND/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2762 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 08-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: M C MEHTA; HITESH CHIMNANI CAS
• Keywords: Business income; Depreciation

Judgement Text

PAGE 1 OF 4 - I.T.A.NO. 64/IND/2010 RAVI BAFNA, INDORE. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : ACIPB-4359D I.T.A.NO.64/IND/2010 A.Y. : 2001-02 SHRI RAVI BAFNA, ACIT, 337, SHIVAJI NAGAR, 3(1), INDORE. INDORE APPELLANT RESPONDENT APPELLANT BY : SHRI M. C. MEHTA AND SHRI HITESH CHIMNANI, CAS RESPONDENT BY : SMT. APARNA KARAN, SR.DR DATE OF HEARING : 14.06.2010 O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT(A)-I, INDORE , DATED 19.10.2009, FOR THE ASSESS MENT YEAR 2006-07. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. THE GROUND RAISED BY THE ASSESSEE READS AS UNDER : THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN CONFIRMING PENALTY OF RS. 27,000 /- U/S 271(1)(C) TOWARDS ALLEGED EXCESS CLAIM OF DEPRECIAT ION @ PAGE 2 OF 4 - I.T.A.NO. 64/IND/2010 RAVI BAFNA, INDORE. 40% ON VEHICLES LEASED WHEN AS PER LAW, THERE WAS N O EXCESS CLAIM OF DEPRECIATION. 4. THE SHORT ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE ASSESSEE CAN BE SAID TO HAVE FURNISHED INACCURATE PARTICULAR S OF INCOME BY CLAIMING DEPRECIATION ON THE VEHICLES @ 40% INSTEAD OF 20%. THE ASSESSEES CLAIM IS BASED ON THE FACT THAT ACCORDIN G TO THE ASSESSEE HE IS ENGAGED IN THE BUSINESS OF RUNNING SUCH VEHICLES ON HIRE, HENCE, ELIGIBLE FOR DEPRECIATION AT HIGHER RATE. THE LD.CIT(A) HAS CONFIRMED THE LEVY OF PENALTY RELYING ON THE DECISION OF THE HON'BLE SUPR EME COURT IN THE CASE OF CIT VS. GUPTA GLOBAL EXIM (P) LIMITED AS REPORTE D IN 305 ITR 132, WHEREIN THE HON'BLE APEX COURT HELD THAT MERELY BEC AUSE THE INCOME FROM LETTING OF TRUCKS ON HIRE WAS INCLUDED IN THE BUSINESS INCOME, THE ASSESSEE COULD NOT BE GIVEN DEPRECIATION AT HIGHER RATES, UNLESS IT WAS PROVED THAT ASSESSEE WAS IN THE BUSINESS OF RUNNING THE VEHICLES ON HIRE. THE ASSESSEE, BEING AGGRIEVED, HAS COME BEFORE US. 5. THE LD.COUNSEL FOR THE ASSESSEE, BRIEFLY, SUBMITTE D THE FACTS AND STATED THAT IT WAS A LEGAL CLAIM MADE BY THE ASSESS EE AND ALL THE PARTICULARS OF SUCH CLAIMS WERE DECLARED IN THE RETURN OF INCOM E. HENCE, IT COULD NOT BE SAID THAT THE ASSESSEE FURNISHED INACCURATE PART ICULARS OF ITS INCOME OR CONCEALED INCOME AND, THEREFORE, IN VIEW OF THE REC ENT DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PRIVATE PAGE 3 OF 4 - I.T.A.NO. 64/IND/2010 RAVI BAFNA, INDORE. LIMITED AS REPORTED IN 322 ITR 158, THE PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT,1961, WAS NOT LEVIABLE. THE LD.COUNS EL FOR THE ASSESSEE FURTHER SUBMITTED THAT EVEN ON MERITS IN THE CASE O F GUPTA GLOBAL (SUPRA), THE HON'BLE SUPREME COURT HAD NOT DECIDED THE ISSUE AGAINST THE ASSESSEE BUT HAD REMANDED THE MATTER BACK TO FIND OUT THE FA CT OF ASSESSEE BEING ENGAGED IN THE BUSINESS OF LETTING OF TRUCKS ON HIR E OR NOT, WHEREAS IN THE PRESENT CASE, NO SUCH CONTROVERSY WAS INVOLVED. HEN CE, THE RATIO OF THAT DECISION WAS NOT CORRECTLY APPLIED BY THE LD.CIT(A ). 6. THE LD. SENIOR D.R., ON THE OTHER HAND, PREFERRED T O RELY ON THE ORDER OF LD.CIT(A). 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 8. IT IS NOTED THAT THE ASSESSEE HAS EARNED HIRE INCOM E BY LETTING OUT THE TWO VEHICLES OWNED BY THE ASSESSEE AND WHIC H HAS BEEN ACCEPTED AS BUSINESS INCOME. IN THIS BACKGROUND, THE ASSESSE E HAS CLAIMED DEPRECIATION AT HIGHER RATES OF 40% AND THE PARTICU LARS OF WHICH HAVE BEEN DISCLOSED SINCE BEGINNING AND , THEREFORE, IT IS A CASE WHERE A LEGAL CLAIM OF THE ASSESSEE HAS BEEN REJECTED. THUS, IN T HESE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED THE INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME AS H ELD BY HON'BLE SUPREME PAGE 4 OF 4 - I.T.A.NO. 64/IND/2010 RAVI BAFNA, INDORE. COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PRIVAT E LIMITED (SUPRA). ACCORDINGLY, WE CANCEL THE PENALTY LEVIED U/S 271(1 )(C) OF THE ACT. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 14 TH JUNE, 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14 TH JUNE, 2010. CPU* 1416