ITO, Jaipur V. M/S GENUS OVERSEAS ELECTRONICS LTD., Jaipur

ITA 704/JPR/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5403 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 01-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: MANISH AGARWAL CA DHK
• Keywords: Depreciation; Additional depreciation; Wrong claim

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 704/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 THE ITO WARD- 7(2), JAIPUR CUKE VS. M/S. GENUS OVERSEAS ELECTRONICS LTD. SPL-3, RIICO INDUSTRIAL AREA, TONK ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACCG 1218 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA, ADDL. CIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/02/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 15 /04/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 21-05-2012 FOR THE ASSESSM ENT YEAR 2006-07 WHEREIN THE REVENUE HAS RAISED THE SOLITARY GROUND AS UNDER:- IN THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE, THE DECISION OF LD. CIT(A) TO CANCEL THE PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961 OF RS. 24,22,700/- IS UNJUSTIFIED. ITA NO.704/JP/2012 THE ITO, WARD- 7(2), JAIPUR VS. M/S. GENU S OVERSEAS ELECTRONICS LTD.,JAIPUR 2 2.1 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE AO ON THE ISSUE IN QUESTION. 2.2 DURING THE COURSE OF HEARING, THE LD. AR CONTEN DS THAT VARIOUS ADDITIONS WERE MADE AGAINST WHICH THE ASSESSEE COMP ANY PREFERRED APPEAL BEFORE THE ITAT JAIPUR BENCH, JAIPUR WHO VID E ORDERS DATED 31- 03-2010 IN ITA NO. 539/JP/2009 (ASSESSEE'S APPEAL) AND ITA NO. 655/JP/2009 (DEPARTMENTAL APPEAL) HAS ALLOWED SUBST ANTIAL RELIEF TO THE ASSESSEE AND DISMISSED THE APPEAL FILED BY THE DEPA RTMENT. THE DISALLOWANCES FINALLY SUSTAINED BY THE ITAT WERE TO THE TUNE OF RS. 71,97,573/- MADE OUT OF ADDITIONAL DEPRECIATION CLA IMED BY THE ASSESSEE ON WIND MILL (RS. 56,90,000/-) AND ON PLANT AND MAC HINERY (RS. 15,07,573/-) BY HOLDING THAT ADDITIONAL DEPRECIATIO N COULD BE ALLOWED FOR THE PERIOD OF 06 MONTHS AS AGAINST FULL YEAR DEPREC IATION CLAIMED BY THE ASSESSEE. AFTER THE ORDER OF ITAT, JAIPUR BENCH, PE NALTY OF RS. 24,22,700/- U/S 271(1)( C) OF THE I.T. ACT, 1961 WA S LEVIED BY ALLEGING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF ITS INCOME BY MAKING WRONG CLAIM OF ADDITIONAL DEPRECIATION AT RS . 71,97,573/-. 2.3 IN FIRST APPEAL, THE LD. CIT(A) HAS DELETED THE PENALTY WHEREIN HE HELD THAT ADDITIONAL CLAIM OF DEPRECIATION MADE BY THE ASSESSEE WAS NOT EXIGIBLE FOR PENALTY BY FOLLOWING OBSERVATIONS. ITA NO.704/JP/2012 THE ITO, WARD- 7(2), JAIPUR VS. M/S. GENU S OVERSEAS ELECTRONICS LTD.,JAIPUR 3 (1) THE ASSESSEE HAS SUBMITTED THAT ALL THE DETAILS , INFORMATION AND SUPPORTING DOCUMENTS I.R.O. THE CLA IM MADE OF THE ADDITIONAL DEPRECIATION TOWARDS WIND MILL AN D OTHER PLANT & MACHINERY. THUS THE ASSESSEE HAD NOT FILED ANY INACCURATE PARTICULARS OR CONCEALED INFORMATION, ON THIS ACCOUNT, LEADING TO MENS REA ON THEIR PART. (2) THE ASSESSEE HAS ITSELF CLAIMED 50% OF THE ALLOWABLE DEPRECIATION RATE ON WIND MILL AND P&M AS THE SAME WERE PUT TO USE LESS THAN 180 DAYS. THE ABOVE ASPECTS SHOW THE GENUINE INTENTION OF THE ASSESSEE REGARDIN G THE DEPRECIATION CLAIM. THUS THE ASSESSEE'S FURTHER EXC ESSIVE CLAIM TOWARDS ADDITIONAL DEPRECIATION ON SUCH ASSET S, CAN SAFELY BE PRESUMED AS AN INADVERTENT AND BONA FIDE MISTAKE ON THE PART OF THE APPELLANT, IN THE ABOVE BACKGROU ND. (3) THE DEPRECIATION CLAIM IS AN ONGOING PROCESS, THEREFORE, IT IS FELT THAT WRONG CLAIM MADE IN THIS REGARD INN A PARTICULAR YEAR HAS IN FACT NOT RENDERED ANY LONG LASTING OR ANY UNDUE/ ADDITIONAL BENEFIT TO THE ASSESSEE, AS E VENTUALITY THE TOTAL QUANTUM OF SUCH CLAIM WOULD HAVE REMAINED THE SAME, IN LONG TERM, UNDER ALL CIRCUMSTANCES. THUS I FIND MERIT IN THE LD. AR'S CLAIM THAT THERE IS NO REASON OR INCENTIVE TO MAKE SUCH EXCESSIVE CLAIM KNOWINGLY. (4) THE AO HAS NOT BROUGHT ANY NEW FACTS ON RECORD WHILE IMPOSING IMPUGNED PENALTY TO ESTABLISH THAT THE EXPLANATIONS FILED BY THE APPELLANT WERE FALSE OR I NCORRECT ITA NO.704/JP/2012 THE ITO, WARD- 7(2), JAIPUR VS. M/S. GENU S OVERSEAS ELECTRONICS LTD.,JAIPUR 4 AND SIMPLY RELIED UPON THE FACT THAT SUCH ADDITION HAS BEEN CONFIRMED AT APPELLATE STAGE. (5) IN VIEW OF THE DECISION OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF GOSWAMI SMT. CHANDRALATA BAHUJI, 125 ITR 700, WHEREIN IT IS HELD THAT THE ASSESSMENT PROCEEDINGS AND THE PENALTY PROCEEDING IS DIFFERENT PROCEEDINGS IN NATURE AS THE CONSIDERATION ARISE IN THE IMPOSITION OF PENALTY ARE DIFFERENT IN THE ASSESSME NT ORDER, THEREFORE, BOTH ARE REQUIRED TO BE DEALT IN DIFFERE NT MANNER AND ANY ADDITION MADE IN THE ASSESSMENT PROCEEDINGS MAY NOT BY ITSELF JUSTIFY IMPOSING IN PENALTY. THE AO H AS NOT SPELT OUT ANY OTHER ADDITIONAL AND CONCRETE GROUNDS TO JUSTIFY THE IMPOSITION OF CONCEALMENT PENALTY ON SUCH FINDI NGS AND IMPOSED THE PENALTY IN RATHER BRIEF AND MECHANICAL MANNER WITHOUT EXPLAINING HIS STAND AS SUCH. (6) HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS (P) LTD., (322 ITR 158) IS FOUND RELEVANT HERE, WHEREIN IT HAS BEEN HELD THAT MERELY REJECTION OF A NY CLAIM, MADE BY THE ASSESSEE, WILL NOT AUTOMATICALLY ENTAIL TO THE CONCEALMENT PENALTY, UNLESS SOME INACCURATE PARTICU LARS ARE FILED IN THIS REGARD. AS STATED ABOVE, THE AO HAS F AILED TO ESTABLISH THAT THE ASSESSEE HAS IN FACT FILED ANY I NACCURATE PARTICULARS, AS SUCH. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF ORIENTAL POWER CABLE LTD. (303 ITR 49), IT HAS BEEN HELD THAT THE CONCEALMENT PENALTY CANNOT SIMPL Y IMPOSE FOR THE REASON THAT THE ADDITION MADE U/S 24 3(3) HAS BEEN ADMITTED OR CONFIRMED AT APPELLATE LEVEL WHERE AS IT IS SEEN THAT THE AO HAS SIMPLY RELIED UPON THE ABOVE A SPECT WHILE IMPOSING THE IMPUGNED PENALTY. (VII) THE HON'BLE APEX COURT IN THE CASE OF ELILLY AND LILLY & COMPANY (312 ITR 225) OBSERVED THAT THE PENALTY PROCEEDING IS NOT AN AUTOMATIC OR MANDATORY FALLOUT OF THE ADDITION MADE DURING THE ASSESSMENT PROCEEDINGS. TH EREFORE, THE SAME SHOULD NOT BE LEVIED IN ROUTINE MANNER. ITA NO.704/JP/2012 THE ITO, WARD- 7(2), JAIPUR VS. M/S. GENU S OVERSEAS ELECTRONICS LTD.,JAIPUR 5 (VIII) IT IS ESTABLISHED THAT THE ABOVE EXCESSIVE C LAIM OF THE ASSESSEE IS BONA FIDE MISTAKE; THEREFORE, THE LD. A R IS FOUND JUSTIFIED IN CLAIMING THAT NO CONCEALMENT PENALTY C AN BE IMPOSED, UNDER SUCH CIRCUMSTANCES. 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ALL THE DETAILS P ERTAINING TO THE CLAIM OF DEPRECIATION AND ADDITIONAL DEPRECIATION WERE FILED BY THE ASSESSEE ALONG WITH RETURN OF INCOME WHICH WAS CERTIFIED BY THE CH ARTERED ACCOUNTANTS. SINCE ALL THE RELEVANT DETAILS WERE FILED ALONG WIT H RETURN MERELY BECAUSE THE CLAIM IS REDUCED OR DISALLOWED. IT CANNOT AUTOM ATICALLY LEAD TO PENALTY U/S 271(1)(C ) OF THE ACT. THE HON'BLE APEX COURT D ECISION OF RELIANCE PETRO PRODUCTS (P) LTD. (SUPRA) IS FULLY APPLICABLE HEREIN IN THIS CASE ALSO. SIMILARLY, THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF GOSWAMI SMT.CHANDRALATA BAHUJI (SUPRA) HAS HELD THAT PENALT Y IS SEPARATE AND DISTINCT AND THE AO HAS NOT BROUGHT ON RECORD ANY C ORROBORATIVE MATERIAL TO INDICATE THAT ASSESSEE'S CLAIM WAS MALA FIDE OR NOT DISCLOSED IN THE RETURN OF INCOME, IN VIEWS OF THESE FACTS AND CIRCU MSTANCES OF THE CASE AND VARIOUS CASE LAWS CITED ABOVE, WE FIND THAT THE LD. CIT(A) HAS RIGHTLY DISMISSED THE PENALTY IMPOSED BY THE AO. THUS THE A PPEAL OF THE REVENUE IS DISMISSED. ITA NO.704/JP/2012 THE ITO, WARD- 7(2), JAIPUR VS. M/S. GENU S OVERSEAS ELECTRONICS LTD.,JAIPUR 6 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED ORDER PRONOUNCED IN THE OPEN COURT ON 15 /04/ 2016. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15 TH APRIL 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 7(2), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-M/S.GENUSOVERSEASELECTRONICS LTD., J AIPUR 3. VK;DJ VK;QDRVIHY@ THE CIT(A). 4. VK;DJ VK;QDR@ CIT, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.704/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR