DCIT, New Delhi V. M/s. Asahi India Glass Ltd., New Delhi

ITA 900/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4156 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-03-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 04-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3); 80HHC; 115JB; 32; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : A NEW DELHI) (DELHI BENCH : A NEW DELHI) (DELHI BENCH : A NEW DELHI) (DELHI BENCH : A NEW DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRSID ENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRSID ENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRSID ENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRSID ENT AND SHRI A.D. JAIN , JUDICIAL MEMBER SHRI A.D. JAIN , JUDICIAL MEMBER SHRI A.D. JAIN , JUDICIAL MEMBER SHRI A.D. JAIN , JUDICIAL MEMBER I.T.A. NO.900/DEL./2010 I.T.A. NO.900/DEL./2010 I.T.A. NO.900/DEL./2010 I.T.A. NO.900/DEL./2010 (ASSESSMENT YEAR : 2004 (ASSESSMENT YEAR : 2004 (ASSESSMENT YEAR : 2004 (ASSESSMENT YEAR : 2004- -- -05) 05) 05) 05) DCIT, CIRCLE 2(1), DCIT, CIRCLE 2(1), DCIT, CIRCLE 2(1), DCIT, CIRCLE 2(1), VS. VS. VS. VS. M/S ASAHI INDIA G M/S ASAHI INDIA G M/S ASAHI INDIA G M/S ASAHI INDIA GLASS LTD. LASS LTD. LASS LTD. LASS LTD. NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 12, BASANT LOK, VASANT VIHAR, 12, BASANT LOK, VASANT VIHAR, 12, BASANT LOK, VASANT VIHAR, 12, BASANT LOK, VASANT VIHAR, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (PAN/GIR NO. : AAACG2115R) (PAN/GIR NO. : AAACG2115R) (PAN/GIR NO. : AAACG2115R) (PAN/GIR NO. : AAACG2115R) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SHRI SANDEEP SAPRA, ADV. ASSESSEE BY : SHRI SANDEEP SAPRA, ADV. ASSESSEE BY : SHRI SANDEEP SAPRA, ADV. ASSESSEE BY : SHRI SANDEEP SAPRA, ADV. REVENUE BY : MS. ANISHA SAPRA, SR.DR REVENUE BY : MS. ANISHA SAPRA, SR.DR REVENUE BY : MS. ANISHA SAPRA, SR.DR REVENUE BY : MS. ANISHA SAPRA, SR.DR ORDER ORDER ORDER ORDER PER A.D. JAIN, JM THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 2004-05 CONTENDING THAT THE CIT(A) HAS ERRED IN DIRECTING TO DELETE THE PENALTY OF `1,73,63,654, LEVIED ON THE ASSESSEE U/S 271(1)(C) OF THE I.T. ACT, 1961, IGNORING THAT THE ASSESSEE HAS MADE DISCLOSURE ON AC COUNT OF EXCESS CLAIM OF DEPRECATION OF `31597100 AND OF DEDUC TION U/S 80HHC ACT, OF `13203329 ONLY DURING THE ASSESSMENT PROCEEDING S AND THE SAME CANNOT BE TREATED AS VOLUNTARY DISCLOSURE ON THE P ART OF THE ASSESSEE COMPANY. 2. THE ASSESSEE FILED RETURN OF INCOME DECLARING NIL IN COME UNDER THE NORMAL PROVISIONS OF THE ACT, AS AGAINST INCOME OF `76,22,38,489 U/S 115JB OF THE ACT. IN THE REGULAR ASSESSMENT MADE U/ S 143(3) OF THE ACT, THE INCOME WAS ASSESSED AT `NIL, UNDER THE NORMAL P ROVISIONS OF THE ACT AND AT `77,41,10,019 U/S 115JB OF THE ACT. HOLDING THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF ITS INCOM E, THE AO LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON THE ASSESSEE. IT WAS OBSERVED THAT THE ASSESSEE, IN THE ASSESSMENT PROCEEDINGS, CL AIMED II.T.A. NO.900/DEL./2010 (A.Y. : 2004-05) 2 DEPRECIATION OF `22,79,84,378 ON ACCOUNT OF ITS FLOA T GLASS DIVISION; THAT HOWEVER, IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUB MITTED THAT THE DEPRECATION IN RESPECT OF THE FLOAT GLASS DIV ISION OF THE ASSESSEE ON THE BASIS OF WDV AS ON 1.4.03 HAD BEEN WORKED OUT AT `19,27,87,278 IN PLACE OF `22,79,84,378 AS ORIGINALL Y CLAIMED ON THE BASIS OF THE WDV AVAILABLE TO THE ASSESSEE AT THE TIME; T HAT AS SUCH, THE EXCESS DEPRECATION CLAIMED AT `3,91,97,100 WAS ADD ED TO THE INCOME OF THE ASSESSEE; THAT FURTHER, THE ASSESSEE HAD SUBMI TTED THAT DEDUCTION U/S 80HHC, OF `13203329 WAS CLAIMED FOLLOWI NG THE DECISION IN SHIRKE CONSTRUCTION AND EQUIPMENTS LTD, 246 I.T. R. 429 (BOM.) AND CIT VS. V.T. JOSEPH, 225 I.T.R. 731(KER.); THAT HOW EVER, IN THE CASE OF IPCA LABORATORIES, 266 I.T.R. 521 (SC), THE HONBL E SUPREME COURT HELD THE DECISION IN SHIRKE CONSTRUCTION AND EQUIPME NTS LTD.(SUPRA) TO BE NOT A GOOD LAW; THAT SO, THE ASSESSEE HAD LATER WI THDRAWN THE CLAIM OF DEDUCTION U/S 80HHC AMOUNTING TO `13203329 AGAINST THE NORMAL INCOME; THAT THIS DEDUCTION WAS NOT ALLOWED TO THE ASSESSEE BY THE AO; AND THAT THE DISALLOWANCE HAD BEEN CONFIRMED BY THE CIT(A). 3. BY VIRTUE OF THE IMPUGNED ORDER, THE CIT(A) CANC ELLED THE PENALTY LEVIED AS ABOVE. 4. AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 5. CHALLENGING THE IMPUGNED ORDER, THE LD.DR. HAS AR GUED THAT THE CIT(A), WHILE ERRONEOUSLY CANCELING THE PENALTY RIGH TLY LEVIED, IGNORED THE FACT THAT THE ASSESSEE COMPANY HAD MADE DISCLOSURE ON ACCOUNT OF EXCESS CLAIM OF DEPRECIATION AND DEDUCTION U/S 80HHC OF THE ACT ONLY DURING THE ASSESSMENT PROCEEDINGS AND THAT SO, THERE WAS N O VOLUNTARY DISCLOSURE BY THE ASSESSEE COMPANY. 6. THE LD.COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, H AS PLACED RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN CONTEND ED THAT SO FAR AS REGARDS THE PENALTY LEVIED QUA DEPRECIATION ON ACCOU NT OF FLOAT GLASS DIVISION OF THE ASSESSEE, THE SAME HAS BEEN ALLOWED BY TH E TRIBUNAL II.T.A. NO.900/DEL./2010 (A.Y. : 2004-05) 3 VIDE ORDER DATED 25.9.08 IN THE CROSS OBJECTION FILED BY THE ASSESSEE IN C.O. NO.311/DEL./07, IN THE DEPARTMENTS APPEAL IN I TA NO.2891/DEL./07 (COPY PLACED ON RECORD). 7. APROPOS THE ISSUE OF PENALTY CONCERNING DEDUCTION U /S 80HHC OF THE ACT, THE LD.COUNSEL FOR THE ASSESSEE HAS CONTENDED TH AT ALL DETAILS WERE DULY FILED BY THE ASSESSEE BEFORE THE AO AND ONLY A REVISED COMPUTATION WAS TO BE PUT IN. ATTENTION HAS BEEN DRA WN TO PAGE 2 OF THE ASSESSEES PAPER BOOK, WHICH CONTAINS A NOTE APPENDED TO THE RETURN OF INCOME FILED. 8. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MAT ERIAL ON RECORD. QUA THE PENALTY LEVIED CONCERNING THE CLAI M OF DEPRECIATION ON ACCOUNT OF THE ASSESSEES FLOAT GLASS DIVISION, THE MATTER IN QUANTUM, IT IS SEEN, STANDS DECIDED BY THE TRIBUNAL VIDE ITS AFOR E-STATED ORDER, BY FOLLOWING TRIBUNALS ORDER IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04. IN ITS ORDER FOR ASSESSMENT YEAR 2003-04 (REPRODUCED IN THE TRIBUNAL ORDER FOR ASSESSMENT YEAR 2004-05), THE TR IBUNAL HAD FOLLOWED THE SPECIAL BENCH (MUM.) DECISION OF THE TR IBUNAL IN THE CASE OF DCIT VS. SYNCON FORMULATION (I) LTD., 292 I.T.R. (AT)(SB) 144, HOLDING THAT DEDUCTION U/S 80HHC IS TO BE ALLOWED AS PER THE B OOK FIGURE ONLY WHILE COMPUTING THE BOOK PROFIT U/S 115JB OF THE ACT . 9. THE CIT(A), WHILE CANCELING THIS PENALTY, HAS OBSER VED, INTER ALIA, THAT THE FACT OF DEPRECIATION IN RESPECT OF FLOATGLA SS (I) LTD., WHEN REDUCED BY AN ORDER PASSED U/S 154 OF THE ACT, WAS VOLU NTARILY CONVEYED TO THE AO, ASKING HIM TO REDUCE THE WDV OF THE FLOAT GLASS DIVISION. 10. THE ABOVE FACTS REMAIN UNCONTROVERTED. THEREFOR E, WE FIND NO ERROR IN THE ACTION OF THE CIT(A) IN CANCELING THE PENALTY LEVIED QUA THE ISSUE OF CLAIM OF DEPRECIATION ON ACCOUNT OF THE FLOA T GLASS DIVISION OF THE ASSESSEE. THE GRIEVANCE OF THE DEPARTMENT IN THIS RE GARD IS, ACCORDINGLY, REJECTED. II.T.A. NO.900/DEL./2010 (A.Y. : 2004-05) 4 11. APROPOS THE ISSUE OF LEVY OF PENALTY QUA THE CLAIM OF DEDUCTION U/S 80HHC, IT IS SEEN THAT THE CLAIM U/S 80HHC, WHICH W AS BASED ON THE DECISION IN SHIRKE CONSTRUCTION AND EQUIPMENTS LT D.(SUPRA), WAS WITHDRAWN AFTER THE RENDERING OF THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF IPCA LABORATORIES(SUPRA). MOREOV ER, UNDISPUTEDLY, ALL THE DETAILS WERE FURNISHED BY THE ASSESSEE BEFORE THE AO. THE NOTE APPENDED WITH THE RETURN OF INCOME (SUPRA) READS AS FO LLOWS: FLOATGLASS INDIA LIMITED (FGI (MERGED WITH THIS COMP ANY ON 01.04.2002) HAD CONTENDED FOR ASSESSMENT YEAR 1998-99 T O 2001-02 THAT IT DOES NOT WISH TO CLAIM DEPRECIATION I N VIEW OF THE DECISION OF THE SUPREME COURT IN CASE OF MAHINDRA MILLS (243 ITR 56). THE AO IN HIS ORDER ISSUED U/S . 143(3) F OR ASSESSMENT YEAR 19989-9' AND 1999-00 HAS HELD THAT DEPRECIATION IS REQUIRED TO BE GRANTED FOR DETERMINI NG INCOME UNDER THE INCOME TAX ACT. THE APPELLATE COMMISSIONER HAS CONFIRMED THE ASSESSING OFFICERS ACTION FOR BOTH THESE Y EARS AND FGI IS IN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL MUMBAI. IN VIEW OF THE INSERTION OF EXPLANATION 5 TO SECTION 32 OF THE ACT W.EF. 1ST APRIL, 2002 FGI CLAIMED DEPRECI ATION IN THE ABOVE YEARS , I.E., ASSESSMENT YEAR 1998-99 AND 1999-00 AND POSITION THAT WILL ULTIMATELY PREVAIL ON COMPLETION OF ASSESSMENT FOR ASSESSMENT YEARS 2000-01 AND 2000-102 AND CONSEQUENTLY UNABSORBED DEPRECATION OF THE COMPANY WI LL CHANGE. 12. NOW, OBVIOUSLY, IT IS THE DEPARTMENTS ONUS TO PROV E FURNISHING OF INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCO ME AT THE HANDS OF THE ASSESSEE. THIS ONUS DOES NOT STAND DISCHARGED HEREIN . THEREFORE, HERE ALSO, WE DO NOT FIND ANYTHING ERRONE OUS ABOUT THE FINDINGS RECORDED BY THE CIT(A), WHICH ARE, ACCORDIN GLY, UPHELD. THE GRIEVANCE OF THE DEPARTMENT IN THIS REGARD IS ALSO REJ ECTED AS SHORN OF MERIT. II.T.A. NO.900/DEL./2010 (A.Y. : 2004-05) 5 13. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. ORDER PRONOUNCED IN OPEN ON 29.04.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED, APRIL 29 , 2011 SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-V, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR/ITAT