BRIJDA ROAD LINES P.LTD, MUMBAI V. ITO WD 6(1)(4), MUMBAI

ITA 6768/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8961 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMARDR
• Keywords: Depreciation; Wrong claim

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -BBENCH MUMBAI , , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND AMARJIT SINGH,JUDICIAL MEMBER ./I.T.A./6768/MUM/2014, / ASSESSMENT YEAR: 2010-11 M/S. BRIJDA ROADLINES PVT. LTD. BMC CASE NO.2, SHOP NO.4 SEWRI CROSS ROAD,MUMBAI-400 015. PAN:AABCB 7060 M VS. ITO-WARD-6(1)(4) AAYAKAR BHAVAN, M.K.ROAD MUMBAI-20. ( /APPELLANT ) ( / RESPONDENT) / REVENUE BY: SHRI SUMAN KUMAR-DR /ASSESSEE BY: SHRI PRAKASH JHUNJHUNWALA -AR / DATE OF HEARING: 08/12/2016 / DATE OF PRONOUNCEMENT: 11.01.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA A.M. - CHALLENGING THE ORDER DATED 11.9.2014 OF CIT(A)-14, MUMBAI THE ASSESSEE COMPANY HAS FILED THE PRESENT APPEAL.ASSESSEE-COMPANY,ENGAGED I N THE BUSINESS OF TRANSPORTATION AND PETROL PUMP DEALERS FILED ITS RETURN OF INCOME ON 1 4.10.10, SHOWING TOTAL INCOME OF RS.3.04 LAKHS.THE AO COMPLETED THE ASSESSMENT U/S.143 (3) O F THE ACT, ON 19.3.2013,DETERMINING ITS INCOME AT RS.40.80 LAKHS. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT LEVY OF PENALTY OF RS.10.56 LAKHS U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME .DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD CLAIMED DEPRECIATIO N @ 40% ON COMMERCIAL VEHICLES, THAT AS PER THE DEPRECIATION SCHEDULE IT WAS ENTITLED TO C LAIM DEPRECIATION @ 30%.AS THE ASSESSEE DID NOT FILE ANY CLARIFICATION,10% OF EXCESS DEPREC IATION(RS.34.19 LAKHS) ON COMMERCIAL VEHICLE WAS WITHDRAWN AND ADDITION TO THAT EXTENT W AS MADE.THE AO ALSO INITIATED PENALTY PROCEEDINGS U/S. 271(1)( C). AS PER THE AO NONE AP PEARED BEFORE HIM NOR AN EXPLANATION WAS FILED IN CONNECTION WITH THE PENALTY PROCEEDINGS, T HAT THE ASSESSEE HAD NOT FILED APPEAL AGAINST THE QUANTUM ORDERS,THAT IT HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND HAD ALSO CONCEALED ITS INCOME WHILE SHOWING EXCESS DEPRECIAT ION, THAT AS PER EXPLANATION 4 TO SECTION 271(1)(C) HE LEVIED A PENALTY OF RS.10,56,675/- U/S . 271(1)(C ) OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FAA. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE PENALTY ORDER, THE FAA HELD THAT EVEN IF THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS ON THE BASIS OF EX- FACIE BOGUS CLAIM PENALTY WAS LEVIABLE, THAT THE AS SESSEE HAD CLAIMED EXCESS DEPRECIATION U/S. 6768/M/14-BRIJDA ROADLINES 2 32 OF THE ACT.THE FAA REFERRED TO THE CASE OF RELIA NCE PETROPRODUCTS PVT.LTD (322 ITR 158); ZOOM COMMUNICATIONS PVT.LTD(327 ITR 150)AND HELD T HAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS, THAT IT HAD NOT FILED ANY B ONAFIDE EXPLANATION FOR THE CLAIM MADE BY IT, THAT THE ARGUMENT OF THE ASSESSEE THAT EXTRA DEPREC IATION WAS CLAIMED INADVERTENTLY COULD NOT COME TO ITS RESCUE,THAT IT HAD RECOURSE TO QUALIFIE D PROFESSIONALS,THAT THE AMENDMENT FOR REDUCTION IN CLAIM OF DEPRECIATION BECAME OPERATIVE W.E.F. 01/01/2006,THAT THE YEAR UNDER CONSIDERATION WAS 2010-11, THAT THE ARGUMENT OF ERR OR WAS MALAFIDE,THAT THE AO HAD RIGHTLY LEVIED THE PENALTY.THE FAA REFERRED TO THE CASE OF M/S. ARCOTECH LTD. (IT APPEAL NO.71 OF 2013 DT.12.9.2013 OF THE DEL HC) ; KANCHENJUNGA ADV ERTISING PVT. LTD.(ITA/944/OF 2011); MAK DATA PVT.LTD.(34 TAXMANN 448) AND SO MANY OTHER CASES AND HELD THAT THE ISSUE INVOLVED WAS NOT DEBATABLE NOR WERE TWO VIEW POSSIB LE, THAT THE CLAIM MADE BY IT WAS NON GENUINE OR INACCURATE. 4. DURING THE COURSE OF HEARING BEFORE US, THE AUTHORI SED REPRESENTATIVE (AR) ARGUED THAT THE ASSESSEE WAS IN TRANSPORTATION BUSINESS AS WELL AS RUNNING PETROL PUMP,THAT IT WAS USING THE VEHICLE/TANKER FOR THE BUSINESS IN THE INDIVIDUAL CAPACITY ALSO THAT THE TANKER WAS USED FOR BUSINESS, THAT DEPRECIATION @40% WAS ALLOWABLE FOR TANKERS IF USED FOR OWN PURPOSE.HE REFERRED TO THE CASE OF SEKSARIA BISVAN SUGAR FACT ORY LTD.(ITA/4428 /MUM/2012 DT.5.8.16); SOMANI EVERGREEN KNITS LTD.(INCOME TAX APPEAL NO.13 32 OF 2011DT.21.03.2013) AND SAID THAT IT WAS A BONAFIDE AND AN INADVERTENT MISTAKE. 5. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE HAD CLAIMED DEPRECIATION @40% FOR A TANKER THAT WAS BEING USED FOR HIS BUSINESS AS WELL AS FOR PERSONAL USES,THAT THE RATE OF DEPRECIA TION IS DIFFERENT IF IT IS USED COMMERCIALLY.IT WAS ARGUED THAT THE ASSESSEE WAS UNDER BONAFILDE BE LIEF THAT RATE OF DEPRECIATION WAS SAME WHETHER OR NOT THE TANKER WAS UTILISED COMMERCIALLY OR NOT.IN OUR OPINION,THE EXPLANATION FILED BY THE ASSESSEE IS POSSIBLE EXPLANATION AND C ANNOT BE OUT REJECTED OUT-RIGHTLY.IT IS ALSO A FACT DISPUTE IS ABOUT THE RATE ON WHICH DEPRECIATIO N SHOULD BE ALLOWED.IT IS NOT A CASE WHERE THE ASSESSEE HAS MADE A BOGUS CLAIM OR WHERE THE AS SET WAS NOT EXISTING.WHILE DECIDING THE ISSUE OF LEVY OF PENALTY U/S.271(1)(C)OF THE ACT TH E BASIC THING TO BE CONSIDERED IS THE EXPLANATION OFFERED BY THE ASSESSEE. CONSIDERING TH E PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE-ALL THE DETAILS WERE AVAILABLE ON RECORD AND T HAT THE AO HAD NOT DOUBTED THE GENUINENESS OF THE EXISTENCE OF THE ASSET-WE ARE OF THE OPINIO N THAT IT WAS NOT A FIT CASE FOR INVOKING THE PROVISIONS OF SECTION 271(1)(C)OF THE ACT AND LEVY PENALTY.CASES RELIED UPON BY THE AR OF THE 6768/M/14-BRIJDA ROADLINES 3 ASSESSEE,ENDORSE THE VIEW TAKEN BY US.WE FIND THAT IN THOSE CASES PENALTY PROCEEDINGS WERE DROPPED IN ALMOST SIMILAR CIRCUMSTANCES SO, REVERSING THE ORDER OF THE FAA,WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSE E. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY, 2017. 11 , 2017 SD/- SD/- ( / AMARJIT SINGH ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 11.01.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR B BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.