AMIDEV AGRO CARE P. LTD, NAVI MUMBAI V. ASST CIT 10(3), MUMBAI

ITA 7463/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3769 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-05-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 01-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR DR
• Keywords: Depreciation; Wrong claim; Non compliance
• Section: 143(3)

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENC H, MUMBAI . . , . , ! '#$ ' BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI D. KARUN AKARA RAO, AM ' ./I.T.A. NO.7463/M/2010 ( %& ' / ASSESSMENT YEAR :2007-2008) M/S. AMIDEV AGRO CARE PVT. LTD., D-59, TTD INDUSTRIAL ESTATE, TURBHE, NAVI MUMBAI 400 708. & / VS. THE ACIT-10(3), MUMBABI. $( ! ' ./PAN : AAACC 0417 A ( () /APPELLANT) .. ( *+() / RESPONDENT) () , - ' / APPELLANT BY : SHRI VIMAL PUNMIYA *+() , - ' / RESPONDENT BY : SHRI MANOJ KUMAR, DR ' & , .! /DATE OF HEARING : 8.5.2013 /0' , .! /DATE OF PRONOUNCEMENT :15.5.2013 #1 #1 #1 #1 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 1.11.2010 IS A GAINST THE ORDER OF CIT (A)- 22, MUMBAI DATED 16.9.2010 FOR THE ASSESSMENT YEAR 2007-2008. THE EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UNDER: THE LD CIT (A) ERRED IN CONFIRMING THE PENALTY OF RS. 62,240/- UNDER SECTION 271(1)(C) OF THE ACT. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF COLD STORAGE AND PRE-COOLING UNIT A ND COLD CHAIN PLANT. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCO ME OF RS. NIL. AS A RESULT OF SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT, THE ASSE SSED INCOME WAS DETERMINED AT RS. 9,00,906/-. DURING THE ASSESSMENT PROCEEDINGS, AO NOTICED THAT THE ASSESSEE CLAIMED EXCESS DEPRECIATION ON ACCOUNT OF BUILDING, PLANT AND MACHINERY QUA THE SUBSIDY AMOUNT RECEIVED FROM THE NABARD. THE DEPREC IATION RELATABLE TO THE SAID SUBSIDY IS RS. 1,84,906/- AND AS PER THE AO, THE SA ME SHOULD NOT HAVE BEEN CLAIMED 2 BY THE ASSESSEE. AO DISALLOWED THE SAME AND ADDED TO THE INCOME RETURNED BY THE ASSESSEE AND THE SAID ADDITION ATTAINED FINALITY AS THE ASSESSEE DID NOT LITIGATE BEFORE THE JUDICIAL AUTHORITIES. HOWEVER, AO INITIA TED THE PENALTY PROCEEDINGS AND LEVIED PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING T O RS. 62,240 /-. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLAT E AUTHORITY, ASSESSEE SUBMITTED THAT THE SUBSIDY IN QUESTION FINALLY WAS NOT AVAILED BY THE ASSESSEE DUE TO NON COMPLIANCE OF CERTAIN SPECIFIC CONDITIONS AND I NFORMED THAT THE SAID SUBSIDY WAS UNDISPUTEDLY REFUNDED TO THE NABARD. FURTHER, ASSE SSEE SUBMITTED THAT THE MISTAKE IN CLAIMING THE EXCESS DEPRECIATION IS BONA FIDE IN NATURE AND PENALTY SHOULD NOT BE LEVIED U/S 271(1)(C) OF THE ACT. ASSESSEE RELIED O N VARIOUS DECISIONS WHICH ARE QUOTED IN PARA 2.3 OF THE IMPUGNED ORDER. CIT (A) REJECTED THE AFORESAID EXPLANATIONS OF THE ASSESSEE AND CONFIRMED THE PENA LTY. AGGRIEVED WITH THE DECISION OF CIT (A), ASSESSEE FILED THE PRESENT APPEAL BEFOR E THE TRIBUNAL. 5. DURING THE PROCEEDINGS BEFORE THE US, LD COUNSEL FOR THE ASSESSEE FILED A PAPER BOOK WITH WRITTEN SYNOPSIS AND RELIED ON VARI OUS DECISIONS TO DEMONSTRATE THAT THE ORDER OF THE CIT (A) IS REQUIRED TO BE REVERSED . FURTHER, LD COUNSEL MENTIONED THAT IT MAY BE A WRONG CLAIM MADE BY THE ASSESSEE, BUT THE SAME IS A BONA FIDE CLAIM, THEREFORE, CONSIDERING THE APEX COURT JUDGME NT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD (322 ITR 158) (SC). LD COUNS EL BROUGHT ATTENTION TO PAGE 36 OF THE PAPER BOOK AND MENTIONED THAT THE SAID SUBSI DY OF RS. 16.85 LACS GIVEN TO COLD STORAGES WAS REFUNDED. 6. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES AS WELL AS THE PAPER BOOK FILED BEFORE US. THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSEE CLAIMED EXCESS DEPRECIATION RELAT ABLE TO THE SUBSIDY OF RS. 16.85 LACS RECEIVED FROM NABARD. SUBSIDY IS AVAILABLE TO THE PERSONS LIKE THE PRESENT ASSESSEE, WHO IS ENGAGED IN THE BUSINESS OF COLD ST ORAGES. ALL THESE DETAILS WERE DISCLOSED IN THE RETURN OF INCOME AS WELL AS THE BO OKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. IT IS ALSO A FACT THAT THE SAID SUBSIDY WAS REFUNDED TO THE NABARD AS 3 EVIDENT FROM THE PAGE 36 OF THE PAPER BOOK. RELEVA NT PORTION OF THE LETTER, WHICH WAS FROM THE CANARA BANK, MUMBAI ADDRESSED TO THE A SSESSEE, IS EXTRACTED AS UNDER: WE HAVE RECEIVED A DEMAND NOTICE FROM NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT CALLING FOR IMMEDIATE REFUND OF ADVANCE SUBSIDY OF RS. 16.85 LA CS PROVIDED TO THE BANK BY NABARD. NABARD HAS NOTED T HAT DURING THE VISIT BY THE JOINT MONITORING COMMITTEE TO THE UNIT ON 18.22.2010, THE COMMITTED OBSERVED THAT THE UNIT CREATED IS NOT IN LINE WITH THE GUIDELINES ON THE S CHEME ISSUED BY THE GOVERNMENT OF INDIA, THUS NOT ELIGIBLE FOR SUBSIDY . 8. AFTER THE SAID AMOUNT OF SUBSIDY IS FINALLY REFU NDED, IN EFFECT, THE EXCESS CLAIM OF DEPRECIATION IS PROPER AND MISTAKE IF ANY IN MAK ING SUCH CLAIM IS NOTIONAL CONCEALMENT WHICH SHOULD NOT ATTRACT PENALTY. IN THI S REGARD, WE HAVE ALSO PERUSED THE CITED JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD (SUPRA), RELEVANT FROM THE SA ID JUDGMENT READS AS UNDER. ........WE HAVE ALREADY SEEN THE MEANING OF THE WOR D PARTICULARS IN EARLIER PART OF THIS JUDGMENT...... SUCH NOT BEING THE CASE, THERE WOULD NO QUESTION OF INVITING THE PENALTY U/S 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN THE LAW, BY ITSELF WILL NOT AMOUNT T O FURNISHING INACCURATE PARTICULARS OF INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RET URN CANNOT AMOUNT TO THE INACCURATE PARTICULARS.....IF WE ACCEPT THE CONTENT ION OF THE REVENUE, THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED B Y THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECT ION 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 9. THEREFORE, THE CLAIM OF EXCESS DEPRECIATION BY T HE ASSESSEE IS UNDISPUTED. FURTHER, REFUNDING OF THE SUBSIDY OF R S 16.5 LAKHS, TO NABARD LATER IN TIME IS ALSO UNDISPUTED. IT IS THE DECISIO N OF THE NABARD THAT THE ASSESSEE IS INELIGIBLE FOR THE IMPUGNED SUBSIDY. T HEREFORE, THE CLAIM OF EXCESS DEPRECIATION IS FACTUALLY THE CASE OF ACADEMIC SIGN IFICANCE. AS SUCH, WE FIND THAT THE ASSESSEE DISCLOSED ALL THE RELEVANT FACTS IN THE RETURN AND HAS NOT CONCEALED ANY PARTICULARS RELEVANT TO THE ISSUE UND ER CONSIDERATION. AO HAS NOT MADE OUT ANY CONCEALMENT OF PARTICULARS IN THE RETURN OF INCOME PER SE WHICH IS THE BASIS FOR LEVY OF PENALTY U/S 271(1)(C ) OF THE ACT. IN OUR OPINION, THE CITED APEX COURTS JUDGMENT IN THE CASE OF RELI ANCE PETROPRODUCTS (P) LTD (SUPRA) HELPS THE ASSESSEE. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY. ACCORDIN GLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED . 4 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 15.5.2013. . #1 , /0' ! 2#&3 15.5.2013 0 , 4 SD/- SD/- (H.L. KARWA) (D. KARUNAKARA RAO ) / PRESIDENT ! '#$ / ACCOUNTANT MEMBER MUMBAI; 2#& DATED 15 /05/2013 . %& . ' ./ OKK , SR. PS #1 #1 #1 #1 , ,, , *%.56 *%.56 *%.56 *%.56 76'. 76'. 76'. 76'. / COPY OF THE ORDER FORWARDED TO : 1. () / THE APPELLANT 2. *+() / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- 4. 8 / CIT 5. 694 *%.%& , , / DR, ITAT, MUMBAI 6. 4 : / GUARD FILE. '+6. *%. //TRUE COPY// #1& ' #1& ' #1& ' #1& ' / BY ORDER ; ;; ; / '< '< '< '< = = = = (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI