Anika International Pvt. Ltd., New Delhi V. ACIT, Circle- 2(2), New Delhi

ITA 8103/DEL/2018

AI Insights

The case involves Anika International P. Ltd., which appealed against the penalty imposed by the Assessing Officer (A.O.) under section 271(1)(c) of the Income Tax Act, 1961, following the disallowance of certain depreciation and income adjustments in their tax return for the Assessment Year 2011-12. The A.O. had initially disallowed depreciation on land and made additions to the income from house property, which were partially upheld by the CIT(A). The Tribunal's decision to delete the penalty was influenced by a previous ruling in the assessee's favor for a different assessment year, where it was established that the correction of a wrong claim by the assessee does not attract penalty under section 271(1)(c).

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 122137 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-11-2022
• Assessment Year: misc
• Appeal Filed On: 19-12-2018
• Other Referred Cases: CIT vs Reliance Petro Products (P.) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Set aside
• Section: 271(1)(c); 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “A” : DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA.No.8103/Del./2018 Assessment Year 2011-12 Anika International P. Ltd., F-402, 4 th floor, D-1 District Centre, Ras Villas Mall, Saket, New Delhi – 110017 PAN AAACA5751F [vs. ACIT, Circle 2(2), New Delhi 110002 (Appellant) (Respondent) For Assessee : Ms. Nida Sultan, CA For Revenue : Shri Kanv Bali, Sr. DR Date of Hearing : 28.11.2022 Date of Pronouncement : 26.12.2022 ORDER PER ANIL CHATURVEDI, A.M. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-1, New Delhi, dated 27.08.2018 in Appeal No.05/17-18 relating to the A.Y. 2011-2012. 2 ITA.No.8103/Del./2019 Anika International (P) Ltd. 2. The relevant facts as culled from the material on records are as under : 2.1 Assessee is a company working as an Indenting Agents & Exporters. Assessee electronically filed its return of income for A.Y. 2011-12 on 26.09.2011 declaring income of Rs. 12,21,87,140/-. The case of the assessee was selected for scrutiny and thereafter, assessment was framed under section 143(3) of the I.T. Act, 1961, vide order dated 28.03.2014 and the total income was determined at Rs. 13,51,56,930/- inter alia by making the following additions:- (1) disallowance of depreciation on land amounting to Rs. 1,17,51,405/- (2) disallowance u/s. 14A r.w.r 8D amounting to Rs. 3,61,025/- (3) addition on account of income from house property shown under the head income from other sources amounting to Rs. 8,57,360/-. 3 ITA.No.8103/Del./2019 Anika International (P) Ltd. 2.2. Aggrieved by the additions made, the assessee carried the matter in appeal before the Ld. CIT(A) who vide order dated 10.07.2015 granted partial relief to the assessee whereby Ld. CIT(A) restricted the depreciation on land to Rs. 10,75,606/- as against the claim of Rs. 1,17,51,405/- disallowed by A.O. and on the issue of income from house property shown as income from other sources, granted relief to the extent of Rs. 3,95,010/-. On the additions aggregating to Rs. 18,98,981/- that were upheld by the Ld. CIT(A), the A.O. vide penalty order passed u/s. 271(1)(c) dated 23.03.2017, levied penalty u/s. 271(1)(c) of Rs. 6,31,000/- . 2.3. Aggrieved by the order of A.O., the assessee carried the matter before the Ld. CIT(A), who vide order dated 27.08.2018 Appeal No. 05/17-18 dismissed the appeal of the assessee. 3. Aggrieved by the order of the Ld. CIT(A), the assessee now is in appeal before us and has raised the following grounds:- 4 ITA.No.8103/Del./2019 Anika International (P) Ltd. 1. The Learned Assessing Officer has erred in raising a penalty u/s. 271(1)(c) of Income Tax Act, 1961 amounting to Rs. 6,31,000/-. 2. The appellant craves leave to add, to amend, to alter, to substitute or withdrawn any of the Grounds of the Appeal on or before the date of disposal. 4. Before us, at the outset Ld. A.R. submitted that identical issue of penalty arose in assessee’s own case for A.Y. 2015-16. The coordinate bench of Tribunal in ITA No. 8532/Del/2019 order dated 11.10.2022 while deciding the issue for A.Y. 2015-16 has deleted the penalty. He placed on record the copy of the aforesaid order. He therefore submitted that in view of the aforesaid decision by the Tribunal in assessee’s own case on identical facts, the penalty levied by A.O. and upheld by the Ld. CIT(A) be deleted. 5. The Ld. D.R. on the other hand supported the order of lower authorities. 5 ITA.No.8103/Del./2019 Anika International (P) Ltd. 6. We have heard the rival submissions and perused the material available on record. The issue in the present appeal is with respect to levy of penalty u/s. 271(1)(c) of the Act. We find that identical issue of levy of penalty was before the coordinate bench of Tribunal for A.Y. 2015-16 in assessee’s own case. The coordinate bench of Tribunal vide order dated 11.10.2022 has deleted the penalty by observing as under:- 3. Brief facts of the case are that penalty in this case was levied for claim of depreciation which was disallowed as the assessee has claimed the depreciation on value of land and building combined but subsequently the depreciation on land portion was disallowed and added to the assessee’s income. In these facts, penalty u/s 271(1)(c) was levied. On similar facts, penalty was upheld by the Ld. CIT(A) in the earlier year also. 6 ITA.No.8103/Del./2019 Anika International (P) Ltd. 4. After careful considering the facts of the case and perusing the records, we find that the assessee has relied upon the decision of the Hon’ble Supreme Court in the case of CIT vs Reliance Petro Products (P.) Ltd. The same is applicable fully on the facts of this case where, it was held that denial of claim of the assessee cannot ipso facto lead to the levy of penalty. Allowance and computation of correct depreciation is bounded duty of the Assessing Officer. Hence, correction of a wrong claim by the assessee in this case cannot lead to a visit by the rigors of penalty u/s 271(1)(c) of the Act upon the assessee. Hence, in our considered opinion, on the touch stone decision of the Hon’ble Supreme Court in the case of Reliance Petro Products (P.) Ltd. penalty u/s 271(1)(c) in this case is not leviable. Therefore, we set- aside the order of the authorities below and delete the penalty. 7. Before us, Revenue has not pointed to any distinguishing facts of the case under consideration and 7 ITA.No.8103/Del./2019 Anika International (P) Ltd. that of A.Y 2015-16 nor has placed any material to demonstrate that the order of Tribunal in assessee’s own case for A.Y. 2015-16 has been set aside/overruled/stayed by higher judicial forum. In such a situation, we following the order of the coordinate bench in assessee’s own case for A.Y 2015-16 and for similar reasons, hold that no penalty u/s. 271(1)(c) of the Act, is leviable in the present case. Thus the ground of assessee is allowed. 8. In the result, appeal of the assessee is allowed. Order pronounced on 26 th day of December, 2022 Sd/- Sd/- [CHANDRA MOHAN GARG] [ANIL CHATURVEDI] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi, Dated 26 th December, 2022 NV/- Copy to 1. The appellant 2. The respondent 3. Ld. CIT(A) concerned 4. CIT concerned 5. DR ITAT “A” Bench, Delhi 6. Guard File //By Order// 8 ITA.No.8103/Del./2019 Anika International (P) Ltd. Assistant Registrar, ITAT, Delhi Benches, Delhi.