IQBAL SINGH S SABLOK, MUMBAI V. ITO WD 21(3)(1), MUMBAI

ITA 7352/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2110 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 24-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 13-12-2013
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL I , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & SHRI PAWAN SINGH , J M ./ ITA NO . 7352 / MUM/20 13 ( / ASSESSMENT YEAR : 20 0 7 - 20 0 8 ) MR. IQBALSINGH S SABLOK, 11, OWNERS COLONY, FLANK ROAD, G.T.B.NAGAR, MUMBAI - 400037 VS. ITO, WARD - 21(3)(3), MUMBAI ./ ./ PAN/GIR NO. : A A VPS 1633 A ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI NILESH JOSHI /REVENUE BY : SHRI PREMANAND J. / DATE OF HEARING : 2 7 /0 8 / 2015 / DATE OF PRONOUNCEMENT 07/10 /2015 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE A GAINST THE ORDER OF CIT (A) , MUMBAI , FOR THE ASSESSMENT YEAR 200 7 - 0 8 , IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE I.T.ACT . 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RE CORD PERUSED. IN THIS CASE THE ASSESSMENT U/S.143(3) OF THE ACT WAS DONE WITH ASSESSED INCOME OF RS.86,06,570/ - AGAINST R ETURNED INCOME OF RS.7,42,030/ - . IN APPEAL FILED BY THE ASSESSEE BEFORE THE CIT(A), THE ASSESSEE GOT A RELIEF TO THE TUNE OF RS.40,39,9 03/ - , HOWEVER, THE CIT(A) CONFIRMED THE ADDITION TO THE TUNE OF RS.38,24,636/ - UNDER THE FOLLOWING HEADS : - (I) 50% DISALLOWANCE OF DEPRECIATION RS.54,375 (II) DIFFERENCE IN PARTIES ACCOUNT (UNRECONCILED ACCOUNTS) RS.4,61,744 ITA NO. 7352 /20 13 2 (III) NON & DEDUCTION TD S U/S.40(A)(IA) RS.33,08,517 THE AO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT AND LEVIED PENALTY ON THE CONFIRMED DISALLOWANCE OF RS. 38,24,636/ - . IN APPEAL FIELD BEFORE THE CIT(A) IN RESPECT OF THE PENALTY SO IMPOSED THE CIT(A) HAS CONFIRMED THE PENALTY UNDER FOLLOWING HEADS : - (I) 50% DISALLOWANCE OF DEPRECIATION RS.54,375 (II) DIFFERENCE IN PARTIES ACCOUNT (UNRECONCILED ACCOUNTS) RS.4,61,744 3. AGAINST THE ABOVE ORDER OF CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT WAS CO NTENDED BY LD. AR THAT PENALTY HAS BEEN IMPOSED WITH RESPECT TO THE GROSS RECEIPTS OF RS.4,61,744/ - BY TREATING IT AS A SHORT RECORDED. 5. WE FOUND THAT THE ASSESSEE HAS ACCOUNTED EXCESS GROSS RECEIPT IN THE CASE OF TWO PARTIES TO THE TUNE OF RS.2,91,522/ - AND SHORT ACCOUNTED RS.1,70,222/ - , IN OTHER TWO PARTIES ACCOUNTS. HOWEVER, THE CIT(A) HAS CONFIRMED THE PENALTY ON ENTIRE GROSS RECEIPT OF RS.4,61,744/ - BY TREATING IT AS SHORT RECORDED AND NOT APPRECIATING THE FACTS THAT IN AN EFFECT THERE HAS BEEN E XCESS RECORDING OF RS.1,21,300/ - IN BOOKS OF ACCOUNTS OF THE ASSESSEE. ACTUALLY THERE HAS BEEN SHORT ACCOUNTING OF GROSS RECEIPTS COMPARED TO TDS CERTIFICATES IN THE CASE OF TWO PARTIES OF RS.1,70,222/ - ONLY. ACCORDINGLY, WE DIRECT THE AO TO RESTRICT THE AMOUNT OF PENALTY BY COMPUTING PROFIT AT 2.51% ON THE SHORT RECEIPT OF RS. 1,70,222/ - . THUS, PENALTY IS RESTRICTED ON THE PROFIT AMOUNT EARNED ON SHORT RECEIPT OF RS.1,70,222/ - ITA NO. 7352 /20 13 3 6. WITH RESPECT TO PENALTY IMPOSED FOR DISALLOWANCE OF DEPRECIATION ON RS.54,375 / - , WE DO NOT FIND ANY MERIT FOR SUCH PENALTY IN VIEW OF THE FACT THAT MERE DECLINE OF ASSESSEES CLAIM CANNOT BE MADE THE REASON FOR IMPOSITION OF PENALTY U/S.271(1)(C) OF THE ACT. THERE WAS FULL DISCLOSURE OF THE ASSETS ACQUIRED AND ASSESSEES CLAIM OF D EPRECIATION . FOLLOWING THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS LTD., 322 ITR 158, WE DO NOT FIND ANY MERIT IN THE IMPOSITION OF PENALTY WITH RESPECT TO ASSESSEES CLAIM OF DEPRECIATION AMOUNTING TO RS.54,375/ - . 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 07/10 / 201 5 . SD/ - SD/ - ( ) ( PAWAN SINGH ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 07/10 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6 . / GUARD FILE. //TRUE COPY//