TANUSHREE LOGISTICS PVT. LTD., Jaipur V. DCIT, Jaipur

ITA 66/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5185 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 21-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Keywords: Depreciation; Bonafide belief; Difference of opinion; Tax effect; Unabsorbed depreciation
• Section: 133A; 139(5)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 66/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 M/S. TANUSHREE LOGISTICS (P) LTD. JAIPUR- AJMER NATIONAL HIGHWAY NO.8 NEAR HOTEL AARAM, GIDANI, DUDU CUKE VS. THE DCIT CIRCLE- 2 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACCT 4873 VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 11/08/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/08/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 24-11-2015 FOR THE ASSESSM ENT YEAR 2010-11 RAISING THEREIN FOLLOWING GROUND:- THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY OF RS. 7.50 LACS U/S 271(1)(C) OF THE I.T. ACT, 1961. ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN TRANSPORTATION BUSINESS. DURING THE YEAR UNDER CONS IDERATION, THE ASSESSEE HAS DECLARED NET PROFIT BEFORE DEPRECIATION AT RS. 3,82,41,181/- ON TOTAL TRANSPORTATION RECEIPTS OF RS. 47,14,40,800/- AND O THER INCOME OF RS. 66,10,988/- AND DEPRECIATION HAS BEEN CLAIMED AT RS . 7,24,90,481. THUS THE LOSS FOR THE YEAR UNDER CONSIDERATION HAD BEEN CLAIMED AT RS. 3,42,49,300/- BY THE ASSESSEE WHICH WAS CLAIMED T O BE CARRIED FORWARD AS UNABSORBED DEPRECIATION. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD DEBITED DEPREC IATION AMOUNTING TO RS. 7,24,90,480/- IN THE PROFIT AND LOSS ACCOUNT. O N PERUSAL OF THE DEPRECIATION CHART FURNISHED BY THE ASSESSEE, THE A O NOTICED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION TO THE TUNE OF R S. 5,61,489/- @ 50% ON TRUCK ACCOUNT (BEFORE 01 OCT 2009). THE AO ASKED THE ASSESSEE VIDE ENTRY SHEET DATED 11-03-2013 AS TO WHY THE DEPRECIA TION CLAIMED @ 50% ON THE OLD TRUCK PURCHASED FROM NBI FINANCE MAY NOT BE DISALLOWED AND THE SAME MAY NOT BE CALCULATED AS PER NORMAL RATE O F DEPRECIATION ON TRUCK I.E. @ 30% AS THESE TRUCKS WERE OLD AND NOT PURCHASED IN FIRST TIME. AS SUCH, THESE OLD TRUCKS CANNOT BE SAID A NEW PLAN T AND MACHINERY. BEFORE THE AO, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD PURCHASED THE TRUCK AS AN ADDITION TO ITS ASSETS, H ENCE THESE WERE NEW ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 3 ASSETS FOR ASSESSEE COMPANY AND THE DEPRECIATION C LAIMED AT 50%. THE ASSESSEE FILED A REVISED CHART OF DEPRECIATION IN W HICH HE CALCULATED DEPRECIATION @ 30% ON OLD TRUCKS PURCHASED FROM NBI FINANCE. THE ASSESSEE HAD FINALLY CLAIMED TOTAL DEPRECIATION OF RS. 7,03,22,480/- AFTER RECTIFYING THE MISTAKE.THE UNABSORBED DEPRECIATION WAS CARRIED FORWARD TO THE TUNE OF RS. 3,20,81,299/- ONLY. HOWEVER, AT THE END OF THE ASSESSMENT ORDER, THE AO INITIATED PENALTY PROCEEDI NGS U/S 271(1) OF THE ACT. 2.2 IN PENALTY PROCEEDINGS, THE AO IMPOSED THE PENA LTY OF RS. 7,50,000/- ON THE ASSESSEE U/S 271(1) OF THE ACT B Y OBSERVING AS UNDER:- 8. HERE IN THIS CASE, THE ASSESSEE HAS NOT DISCLO SED HIS TRUE PARTICULAR OF INCOME AS THE DETAILS OF PUR CHASES OF TRUCK VERY WELL WIT THE ASSESSEE BEFORE FILING OF R ETURN OF INCOME. FURTHER THE POINT MAY BE APPRECIATED THAT H AD IT NOT BEEN A CASE OF REGULAR ASSESSMENT THE FACTS OF DISA LLOWANCES OF EXCESS DEPRECIATION, ON OLD TRUCKS PURCHASED BY THE ASSESSEE FROM NBI FINANCE, MADE BY THE AO DURING TH E COURSE OF ASSESSMENT CAN NEVER BE EXPOSED. 9. FURTHER I DO NOT FIND ANY MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE ADDITION HAS BE EN MADE ONLY ON ACCOUNT OF DIFFERENCE OF OPINION AS THE A/ R OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT ACCEPTED T HE OPINION OF THE AO AND FURNISHED A REVISED CHART OF DEPRECIATION. IT IS ALSO TO BE MENTIONED HERE THAT IN CASE ANY OMISSION / ERROR THE ASSESSEE HAD OPTION TO REVISE HIS RETURN OF INCOME U/S 139(5) BUT THE SAME HAS NOT BEEN OPTE D BY THE ASSESSEE. 10. FURTHER, IT IS ALSO TO BE MENTIONED THAT MERE ACCEPTANCE OF THE TAX EVASION DURING ASSESSMENT PRO CEEDINGS ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 4 SERVE NO PURPOSE HAD THE CASE NOT COME UNDER SCRUTI NY, THE UNDISCLOSED INCOME WOULD NOT HAVE SEEN IN THE LIGHT OF THE DAY. IN VIEW OF THE ABOVE DISCUSSIONS AND THE FACTS OF THE CASE, IT IS CLEAR THAT THE ASSESSEE HAD CONCEALED T HE TRUE PARTICULARS OF HIS INCOME. HENCE, THE ABOVE MENTION ED CONCEALMENT OF INCOME LEADS TO ATTRACT PENAL PROVIS IONS BY VIRTUE OF SECTION 271(1) . FURTHER, THE EXPLANATI ON PUT FORTH BY THE ASSESSEE IN HIS DEFENCE HAS NOT BEEN F OUND SATISFACTORY AND IN THIS WAY THE CASE OF THE ASSESS EE FALLS IN THE CATEGORY OF EXPLANATION 1 TO SECTION 271(1) AN D THEREFORE, PENALTY U/S 271(1) IS IMPOSED ON THE CO NCEALED INCOME AS PER WORKING GIVEN BELOW:- IMPOSITION OF PENALTY A. TOTAL CONCEALED INCOME AS DISCUSSED ABOVE RS. 21,68,000/- B. TAX ON CONCEALED INCOME RS. 7,36,903/- MINIMUM PENALTY WORKS OUT @ 100% RS. 7,36,903/- MAXIMUM PENALTY WORKS OUT @ 300% RS. 22,10,709/- IN VIEW OF THE ELABORATE DISCUSSION IN THE BODY OF THE ORDER, I IMPOSE A PENALTY OF RS. 7,50,000/- U/S 271 (1) OF THE I.T. ACT, 1961. 2.3 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE PENALTY OF RS. 7.50 LA CS U/S 271(1)C) OF THE ACT IMPOSED BY THE AO (DCIT, CIRCLE- 2, JAIPUR). T HE CONCLUSIVE OBSERVATION OF THE LD. CIT(A) IS SUMMARIZED AS UND ER:- DURING APPELLATE PROCEEDINGS, IT WAS THE CONTENTION OF THE ASSESSEE THAT FOR IT THE OLD TRUCKS PURCHASED FROM THE FINANCE CO MPANY WERE NEW AND THAT IS WHY IT CLAIMED DEPRECIATION @50% WHICH WAS AVAIL ABLE FOR THE NEW TRUCKS PURCHASED DURING THE LIMITED PERIOD FROM 01.01.2009 TO 01.10.2009. IN SUPPORT OF ITS CONTENTION, THE APPELLANT PLACED RELIANCE ON THE DEFINITION OF THE WORD NEW AS PER MERRIAM-WEBSTER DICTIONARY AS HAVING BEEN SEEN, USED OR KNOWN FOR A SHORT TIME. THEREAFTER, BY REPRODUCING THE DEFINITION OF NEW AS PER THE DICTIONARY (PAGE 6-7 OF THE ORDER), THE CIT (A) HELD THAT THE APPELLANT ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 5 CHOSE THAT PART OF THE DEFINITION WHICH SUIT IT PAR TLY AND IGNORED THE OTHER PARTS OF THE DEFINITION. IN ITS OPINION, NEW TRUCK MEAN S THE TRUCK WHICH WAS NOT USED EARLIER FOR ANY PURPOSE AND ON WHICH NO DEPRECIATIO N WAS CLAIMED EARLIER. EVEN IF THE DEFINITION AS SUGGESTED BY THE APPELLAN T IS PRESUMED, STILL THE APPELLANT FAILED TO DEMONSTRATE WHAT WAS THAT SHOR T PERIOD OF USE OF TRUCKS BY THE EARLIER OWNER I.E. THE FINANCE COMPANY. IT WAS THE CONTENTION OF THE APPELLANT THAT IT WAS A MISTAKE. IT IS DIFFICULT TO COMPREHEND HOW THE APPELLANT COMPANY CAN COMMIT SUCH A MISTAKE WHEN THE PROFESSIONAL EXPERTISE WAS AVAILABLE TO IT. IT IS THEREFORE HELD THAT THE EXPLANATION PUT FORTH BY THE APPELLANT IN CLAIMING DEPRECIATION AT HIGHER RATE IS NOT BONAFIDE AND THE APPELLANT FAILED TO SUBSTANTIA TE ITS EXPLANATION. IT IS DIFFICULT TO IMAGINE HOW AN OLD THING COULD BE TREA TED AS NEW IN THE HANDS OF A NEW OWNER. IT IS THEREFORE, HELD THAT THE CLAIM O F DEPRECIATION ON OLD TRUCKS AT HIGHER RATES WAS PATENTLY WRONG. THE APPELLANT RELIED UPON A NUMBER OF CASE LAWS FOR CANCELLATION OF PENALTY IMPOSED BY THE AO. IN THIS REGARD, IT IS TO BE NOTED THAT THESE CASES ARE DISTINGUISHABLE FROM THE FACTS OF THE INSTANT CASE UNDER CONSIDERATION. THE LD. CIT(A), THEREAFTER IN CONFIRMING THE LEVY OF PENALT Y RELIED ON THE RAJASTHAN HIGH COURT DECISION IN CASE OF PUNSUMI ENGINEERS LT D. VS. CIT (2014) 90 CCH 0262 [PAGE 8 OF THE ORDER], DELHI HIGH COURT DE CISION IN CASE OF CIT VS. NG TECHNOLOGIES LTD. (2015) 57 TAXMAN.COM 389 [PAGE 9-11 OF THE ORDER] AND SUPREME COURT DECISION IN CASE OF MAK DATA PVT. LTD. (2013) 38 TAXMAN.COM 448 (PAGE 11-13 OF THE ORDER). 2.4 NOW THE ASSESSEE IS BEFORE ME WITH THE PRAYER T O DELETE THE PENALTY AS THE LD. CIT(A) HAS WRONGLY CONFIRMED THE LEVY OF PENALTY OF RS. 7.50 LACS U/S 271(1)(C) OF THE ACT AND THE LD. AR OF THE ASSESSEE ALSO FILED FOLLOWING WRITTEN SUBMISSION TO THIS EFFECT. 1. AT THE OUTSET, IT MAY BE NOTED THAT THE AO HAS NOT SPECIFIED IN THE ASSESSMENT ORDER AS TO FOR WHICH CHARGE PENALTY PRO CEEDINGS HAS BEEN INITIATED. HE HAS SIMPLY MENTIONED PENALTY NOTICE U/S 271(1)(C) R.W.S. 274 OF THE IT ACT, 1961 IS ISSUED. IT IS NOT STATED WHETHER THE INITIATION IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. FURTHER, ONLY PRINTED NOTICE HAS BEEN ISSUED ALONG WITH THE ASSESSMENT ORDER WITHOUT MENTIONING AS TO THE CHARGE FOR WHICH SUCH NOTICE IS ISSUED. WHILE IMPOSING THE PENALTY ALSO, IN ONE PARA IT IS MENTIONED THAT PENA LTY IS FOR NOT DISCLOSING TRUE PARTICULARS OF INCOME WHEREAS IN ANOTHER PARA IT IS STATED FOR CON CEALMENT OF INCOME. THE LD. CIT(A) HAS ALSO CONFIRMED THE PENALTY IMPOSED BY THE AO WITHOU T SPECIFYING WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 6 2. IT IS SUBMITTED THAT THE TWO CHARGES FOR INITIATING THE PENALTY OPERATE ON TWO DIFFERENT FOOTING AND UNDER THE PENAL PROVISION THE CHARGE HAS TO BE VERY SPECIFIC AND NOT VAGUE. THESE CHARGES ARE NOT TO BE RECKONED AS ANY CASUAL REMARK, WHICH CAN BE INTERCHANGED BY THE AO AT ANY STAGE ON HIS WHIMS AND FANCIES. TH E AO CANNOT INITIATE A PENALTY FOR ONE CHARGE AND THEN AMBUSH THE ASSESSEE BY LEVYING PENA LTY ON A DIFFERENT CHARGE BECAUSE THE INITIAL ONUS TO EXPLAIN AND REBUT THE CHARGE IS UPO N THE ASSESSEE. IF CHARGE ITSELF IS VAGUE AND NOT CLEAR, THEN THE ONUS CAST UPON THE ASSESSEE UND ER EXPLANATION ITSELF GETS VITIATED AS ASSESSEE IS PRECLUDED FROM A CHANCE TO GIVE A SPECI FIC REBUTTAL ON THAT CHARGE. RELIANCE IN THIS CONNECTION IS PLACED ON THE FOLLOWING CASES:- 1. ACIT & ANR. VS. DIPESH M PANJWANI & ANR. 46 CCH 0322 (MUM.) (TRIB.) DT. 18.03.2016. 2. ROSHAN LAL TILAK RAJ & CO. VS. ITO 46 CCH 0130 ( ASR.) (TRIB.) DT. 22.01.2016 3. TRISTAR INTECH P. LTD. VS. ACIT 43 ITR (TRIB.) 0 279 (DEL.) DT. 07.09.2015 4. CIT VS. M/S MANJUNATHA COTTON & GINNING FACTORY & ORS. 359 ITR 565 (KAR.) HC 5. RADHA MOHAN MAHESHWARI VS. DCIT ORDER DT. 18.03. 2016 IN ITA NO.773/JP/13 6. SHANKAR LAL KHANDELWAL VS. DCIT ORDER DT. 11.03. 2016 IN ITA NO. 878/JP/13 ON MERIT 1. IT IS SUBMITTED THAT ASSESSEE UNDER A BONAFIDE B ELIEF THAT THE TRUCKS PURCHASED FROM NBI FINANCE IS NEW FOR IT CLAIMED THE DEPRECIA TION AT THE HIGHER RATE. HOWEVER, WHEN THE AO TOOK A VIEW THAT ON THESE TRUCKS HIGHER DEPRECIATION IS NOT ALLOWABLE TO THE ASSESSEE, A REVISED DEPRECIATION CHART WAS FILE D REDUCING THE CLAIM OF DEPRECIATION. THIS WAS DONE AS ULTIMATELY IT WAS NOT MAKING ANY E FFECT ON THE TAX LIABILITY OF THE ASSESSEE IN AS MUCH AS EVEN AFTER REDUCING THE CLAI M OF DEPRECIATION, THE INCOME OF THE ASSESSEE REMAINED AT NIL WITH A LOWER CARRIED FORWA RD OF UNABSORBED DEPRECIATION BUT AT THE SAME TIME THE WDV OF THE TRUCKS INCREASED EN TITLING ASSESSEE TO CLAIM HIGHER DEPRECIATION IN THE SUBSEQUENT YEAR. IT MAY BE NOTE D THAT IN A.Y. 11-12 AND A.Y. 12- 13 ALSO, INCOME IS ASSESSED AT NIL WITH CARRY FORWA RD OF UNABSORBED DEPRECIATION BUT IN A.Y. 11-12, WHEN THERE WAS A REDUCTION IN THE CL AIM OF DEPRECIATION BY RS.4,33,600/- ON THIS ACCOUNT, NO PENALTY WAS INITI ATED BY THE AO. FURTHER, IN A.Y. 13- 14, THESE TRUCKS HAVING ORIGINAL COST OF RS.1,08,40 ,000/- HAVING WDV OF RS.37,18,120/- AS ON 31.03.2012 (AFTER CLAIMING DEP RECIATION @30% INSTEAD OF 50%) WAS SOLD FOR RS.94,86,000/- AND STCG OF RS.57,67,88 0/- IS OFFERED FOR TAX IN A.Y. 13- 14. THE WORKING OF DEPRECIATION/STCG IN THIS CONNEC TION IS AS UNDER (PB 16-19) :- ORIGINAL COST OF TRUCKS RS.1,08,40,000/- LESS:- DEPRECIATION @30% IN A.Y. 10-11 RS.32,52, 000/- WDV AS 01.04.2010 RS.75,88,000/- LESS:- DEPRECIATION @30% FOR A.Y. 11-12 RS.22,7 6,400/- WDV AS ON 01.04.2011 RS.53,11,600/- LESS:- DEPRECIATION @30% FOR A.Y. 12-13 RS.15,93, 480/- WDV AS ON 01.04.2012 RS.37,18,120/- LESS:-SALE VALUE IN A.Y. 13-14 RS.94,86,000/- STCG OFFERED IN A.Y. 13-14 IN RETURN RS.57,67,880/- THE COPY OF THE ASSESSMENT ORDER FOR A.Y. 11-12 TO 13-14 ALONG WITH THE COPY OF INCOME TAX RETURN FOR A.Y. 13-14 IS PLACED AT PB 1-12 AND 13-15 FOR VERIFICATION OF THESE FACTS. FROM THIS WORKING, IT IS EVIDENT THAT THERE IS NO TAX EFFECT IN DISALLOWING ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 7 THE DEPRECIATION IN A.Y. 10-11 AND IN THIS BACKDROP , THE ASSESSEE ACCEPTED THAT THE DEPRECIATION BE ALLOWED TO IT @30% INSTEAD OF 50%. IN SUCH CIRCUMSTANCES, WHEN ASSESSEE MADE A BONAFIDE CLAIM, ALL MATERIAL FACTS WERE SUBMITTED TO THE AO, THERE IS NO TAX IMPLICATION IN CLAIMING A HIGHER DEPRECIATIO N EITHER IN A.Y. 10-11 OR IN THE SUBSEQUENT YEAR TILL THESE TRUCKS WERE SOLD, IT CAN NOT BE INFERRED THAT ASSESSEE HAS ANY INTENTION OF CONCEALING THE INCOME OR FURNISHING TH E INACCURATE PARTICULARS OF INCOME. 2. RELIANCE IN THIS CONNECTION IS PLACED ON THE FOL LOWING CASES:- ACIT VS. SPL INDUSTRIES LTD. (2016) 47 ITR (TRIB.) 0204 (DEL.) [PB 20-27] IN THIS CASE, THE ASSESSEE ON THE BASIS OF THE NEWS PUBLISHED IN THE FINANCIAL EXPRESS NEWS PAPER I.E. ...THE FINANCE MINISTRY HA S DECIDED TO RETAIN THE SPECIAL DEPRECIATION BENEFITS FOR TEXTILE MACHINERY INSTALL ATION UNDER THE TECHNOLOGY UPGRADATION FUND SCHEME (TUFS) FRESH INVESTMENTS UN DER TUFS-AN INTEREST SUBSIDY SCHEME TO PROMOTE CAPACITY BUILDING IN THE TEXTILE INDUSTRY-WILL CONTINUE TO BENEFIT FROM 50% DEPRECIATION IN THE FIRST YEAR. FU RTHER, THE ELIGIBILITY CRITERIA FOR THE EXTRA DEPRECIATION BENEFIT WOULD BE BENCHMARKED ON THE TUFS NORMS WITH REGARD TO THE SOPHISTICATION LEVELS OF THE MACHINE INSTALLED. THE SPECIAL DISPENSATION WILL BE CO- TERMINUS WITH TUFS, WHICH HAS BEEN EXTENDED TO 2006 -07... CLAIMED HIGHER DEPRECIATION. THE AO MADE DISALLOWANCE ON ACCOUNT O F EXCESS CLAIM OF DEPRECIATION WHICH WAS CONFIRMED BY THE CIT(A). THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C). THE LD. CIT(A) DELETED THE PENALTY BY HO LDING THAT THE ASSESSEE UNDER BONAFIDE BELIEF BASED ON THE REPORT IN THE FINANCIA L EXPRESS HAD CLAIMED HIGHER DEPRECIATION. THERE WAS NO CONCEALMENT INVOLVED NOR THIS IS A CASE OF FILING OF INACCURATE PARTICULARS AS EVERYTHING WAS DISCLOSED IN THE DEPRECATION CHART ATTACHED WITH THE INCOME-TAX RETURN. THIS CASE IS COVERED BY THE CASE OF CIT VS. RELIANCE PETRO PRODUCT PVT. LTD. (2010) 322 ITR 158 AND CIT VS. BRAHMPUTRA CONSORTIUM LTD. 348 ITR 0339 (DEL.) (HC). IN CASE OF CIT VS. BRAHMPUTRA CONSORTIUM LTD., THE ASSESSEE CLAIMED DEPRECIATION AT 40% ON EARTH MOVING EQUIPMENT WHICH CONSISTED OF EXCAVATORS AND TIPPERS. AS PER THE RULES, ONLY TIPPERS WERE ELIGIB LE FOR HIGHER RATE OF DEPRECIATION AT 40% AND NOT EXCAVATORS. WHEN THE ASSESSEE WAS CONFR ONTED WITH THIS, IT REVISED ITS CLAIM, CLAIMING 25% OF DEPRECIATION INSTEAD OF 40%. THIS RESULTED IN DISALLOWANCE OF EXCESS DEPRECIATION. THE AO IMPOSED PENALTY U/S 271 (1)(C) ON THE GROUND THAT THE ASSESSEE REVISED ITS COMPUTATION ONLY WHEN THE WRON G CLAIM OF DEPRECIATION WAS DISCOVERED BY THE AO, THAT TOO, WHEN IT COULD BE DI SCOVERED AFTER PROPER ENQUIRY AND SCRUTINY OF THE DETAILS. ON THESE FACTS, IT WAS HEL D THAT THERE CANNOT BE DISPUTE ABOUT THE PROVISIONS ALLOWING DEPRECIATION AT 25 PERCENT ON EXCAVATORS. HOWEVER, THE CIRCUMSTANCES UNDER WHICH THE CLAIM WAS MADE AT 40 PERCENT, SHOWS THAT IT WAS A GENUINE AND BONA FIDE WHICH WAS DIRECTED BY THE ASS ESSEE. THAT APART, OTHER ELEMENT PRESENT IN THIS CASE GIVES A STRONG INDICATION THAT THE ERROR WAS GENUINE AND BONA FIDE. RETURN FOR THE ASSESSMENT YEAR IN QUESTION WAS FILE D DECLARING LOSS OF RS.93,74,724. ASSESSMENT WAS ALSO COMPLETED AT LOSS OF RS.23,33,3 21/-. THEREFORE, EXCESS CLAIM OF DEPRECIATION WAS NOT ADVANTAGEOUS TO THE ASSESSEE. HAD DEPRECIATION BEEN CLAIMED AT 25 PERCENT, IT WOULD HAVE RESULTED IN HIGHER DEPREC IATION IN THE SUCCEEDING YEARS WHICH WOULD, HAVE CONSEQUENTLY REDUCED THE TOTAL IN COME OF SUCCEEDING YEARS. IT INDICATES THAT EXCESS CLAIM OF DEPRECIATION WAS NOT A DEVICE, RATHER IT WAS AN INADVERTENT ERROR. THUS BY MAKING CLAIM OF DEPRECIA TION AT HIGHER RATE IN THIS YEAR, WHERE THE INCOME TAX RETURN WAS AT LOSS, THE ASSESS EE DID NOT GAIN ANY MILEAGE. ON THE CONTRARY, IT WAS BETTER FOR HIM TO CLAIM DEPREC IATION AT 25 PERCENT IN THIS YEAR RESULTING INTO HIGHER WRITTEN DOWN VALUE IN THE NEX T YEAR FOR CLAIM OF DEPRECIATION OF A HIGHER AMOUNT ON HIGHER WRITTEN DOWN VALUE THEREB Y REDUCING THE TAX LIABILITY. THE ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 8 ASSESSING OFFICER WAS NOT CORRECT IN HOLDING THAT S UBMITTING INACCURATE CLAIM WOULD AMOUNT TO GIVING INACCURATE PARTICULARS. THE HONBLE ITAT AFTER RELYING ON THE AFORESAID JUD GMENTS AS WELL AS JUDGMENT IN CASE OF ITO VS. DESHRAJ TEXTURISED PVT. LTD. ITA NO. 660/AHD/2010 AND JUDGEMENT IN CASE OF PIPARIA SYNTEX PVT. LTD. ITA N O. 2084/AHD/11 HELD THAT PENALTY IMPOSED BY THE AO CANNOT BE HELD AS SUSTAINABLE AND THE CIT(A) HAS RIGHTLY DELETED THE SAME. PRICE WATERHOUSE COOPERS (P.) LTD. VS. CIT (2012) 3 48 ITR 306 (SC) THE ASSESSEE FIRM FILED ITS RETURN OF INCOME ALONG WITH TAX AUDIT REPORT. IN ITS TAX AUDIT REPORT, IT WAS INDICATED THAT PROVISION T OWARDS PAYMENT OF GRATUITY WAS NOT ALLOWABLE BUT IT FAILED TO ADD PROVISION FOR GRATUI TY TO ITS TOTAL INCOME. IT WAS HELD THAT IT WAS A BONA FIDE AND INADVERTENT ERROR. THE SAME CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ALL ARE PRONE TO MAKE. THE ASSESSEE COULD NOT BE HELD GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. THEREFORE, IMPOSITION OF PENALTY WAS UNJUSTIFIED. 3. THE DECISIONS RELIED BY THE LD. CIT(A) IN CASE O F PUNSUMI ENGINEERS LTD. VS. CIT (2014) 90 CCH 0262 (RAJ.) (H C) IS ON DIFFERENT FACTS AND SITUATIONS IN AS MUCH AS IN THAT CASE IT WAS FOUND THAT THE ACQUISITION OF ASSET ITSELF IS NOT PROVED AND THE TRANSACTION WAS HELD TO BE A COL OURABLE TRANSACTION. SIMILARLY THE CASE OF CIT VS. NG TECHNOLOGIES LTD. (2015) 370 ITR 0007 (DEL.) (HC) IS ON A DIFFERENT FOOTING. FURTHER, THE DECISION RELIED BY CIT(A) IN CASE OF MAK DATA PVT. LTD. (2013) 358 ITR 593 (SC) IS NOT APPLICABLE ON F ACTS. IN THAT CASE, THE ASSESSEE FILED ITS ROI FOR A.Y. 04-05 ON 27.10.2004. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT CERTAIN DOCUMENTS PERTAINING TO SHARE APPLICATIONS WERE FOUND IN THE COURSE OF SURVEY PROCEEDINGS U/S 133A CONDUCTED ON 16.12.2003 IN THE CASE OF ASSESSEES SISTER CONCERN. THE ASSESSEE WITH A VIEW TO AVOID LITIGATION, BUY PEACE AND TO MAKE AMICABLE SETTLEMENT WITH THE DEPA RTMENT SURRENDERED ADDITIONAL INCOME. THE AO IMPOSED PENALTY U/S 271(1)(C). IT WA S HELD THAT THE AO SHOULD NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE V OLUNTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, ETC. TO EXPLAIN AWAY ITS CONDUC T. THE STATUE DOES NOT RECOGNIZE SUCH DEFENCE UNDER EXPLN. 1 TO SEC. 271(1)(C). IT I S A TRITE LAW THAT A VOLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FROM THE M ISCHIEF OF PENAL PROCEEDINGS. THE SURRENDER OF INCOME IN THIS CASE WAS NOT VOLUNTARY IN THE SENSE THAT THE SURRENDER WAS MADE IN VIEW OF THE DETECTION OF CERTAIN DOCUMENTS DURING THE SURVEY CONDUCTED IN THE CASE OF ASSESSEES SISTER CONCERN. THE SURVEY W AS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURREND ERED LATER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR T HAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. THEREFORE, THE LEVY OF PEN ALTY U/S 271(1)(C) IS JUSTIFIED. THE FACTS OF THIS CASE IS THUS ALL TOGETHER DIFFERENT A ND NOT APPLICABLE TO THE FACTS OF THE ASSESSEE IN VIEW OF THE ABOVE, THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT(A) BE DELETED. 2.5 THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 9 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORDS TH AT THE ASSESSEE CLAIMED DEPRECIATION ON THE NEWLY ACQUIRED TRUCKS @ 50% AS THERE WAS A PROVISION IN THE SCHEDULE THAT NEW COMMERCIAL VEHIC LE ACQUIRED BETWEEN THE PERIODS 01-01-2009 TILL 30-09-2009, DEPRECIA TION SHALL BE AVAILABLE @ 50%. HOWEVER, THESE TRUCKS WERE NEWLY ACQUIRED BY THE ASSESSEE BUT THEY WERE NOT NEW. THEREFORE, THE CLAIM OF DEPRECIA TION WAS REVISED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. AFT ER ADJUSTMENT THERE WAS CARRY FORWARD UNABSORBED DEPRECIATION OF RS. 3, 20,81,299/-. SIMILAR CLAIM OF DEPRECIATION WAS DISALLOWED IN THE ASSESSM ENT YEARS 2011-12 BUT NO PENALTY U/S 271(1) OF THE ACT WAS INITIATED . AS PER ASSESSMENT ORDER DATED 6-11-2015 RELATING TO ASSESSMENT YEAR 2 013-14, THE CARRY FORWARD UNABSORBED DEPRECIATION WAS MORE THAN RS. 1 4.00 CRORES. THE ASSESSEE HAS DECLARED SHORT TERM CAPITAL GAIN ON TH E SALE OF THESE TRUCKS IN THE ASSESSMENT YEAR 2013-14 AND CAPITAL GAIN HAS BE EN CALCULATED BY TAKING DEPRECIATION @ 30%. ALL THESE FACTS SUGGEST THAT THERE WAS AN INADVERTENT MISTAKE ON THE PART OF THE ASSESSEE FOR CLAIMING DEPRECIATION AND SAME WAS RECTIFIED AS SOON AS IT WAS NOTICED. K EEPING THESE FACTS IN VIEW AND VARIOUS CASE LAWS RELIED ON BY THE LD. AR OF THE ASSESSEE, I ITA NO. 66/JP/2016 M/S. TANUSHREE LOGISTICS (P) LTD. VS. DCIT , CIRCL E- 2, JAIPUR . 10 DIRECT TO DELETE THE PENALTY OF RS. 7.50 LACS LEVIE D U/S 271(1) OF THE ACT. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/08/20 16 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 /08/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. TANUSHREE LOGISTICS (P) LTD. DU DU 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE- 2, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 66/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR