Sh. Kamal Sood, Moga V. The Dy. CIT, Moga

ITA 92/ASR/2012

• Counselvise Citation: 9220914 RSA 2012
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J R HIRA ITP
• Keywords: Depreciation; Question of law
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.92(ASR)/2012 ASSESSMENT YEAR:2006-07 PAN :ADVPS1755L SHRI KAMAL SOOD VS. DY. COMMR. OF INCOME-TAX, S/O SH. VED PAUL SOOD, MOGA. MOGA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. J.R. HIRA, ITP RESPONDENT BY:SH. TARSEM LAL, DR DATE OF HEARING:09/08/2012 DATE OF PRONOUNCEMENT:28/08/2012 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A)-II, LUDHIANA, DATED 03.01.2012 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT LD. CIT(A) WAS NOT JUSTIFIED BY HOLDING TH AT ASSESSEE HAD REVALUED THE ASSETS WITH THE AIM TO INCREASE THEIR VALUE IN BALANCE SHEET FOR FURNISHING TO THE BANK. 2. THAT LD. CIT(A) HAS ERRED IN NOT TAKING INTO CON SIDERATION THE WRITTEN SUBMISSION OF THE ASSESSEE ALONG WITH DOCUM ENTS AND ALSO IGNORED THE FACTS STATED THEREIN. ITA NO.92(ASR)/2012 2 3. THAT THE LD. CIT(A) WAS NOT JUSTIFIED BY HOLDING THAT ASSESSEE HAD CLAIMED WRONG DEPRECIATION WHERE AS CLAIM OF D EPRECIATION WAS SURRENDERED WITHOUT ARGUMENTS JUST TO PURCHASE PEACE OF MIND SUBJECT TO NO PENALTY OF CONCEALMENT. IT IS THEREFORE PRAYED THAT PENALTY U/S 271(1)(C) IMPOSED BY AO AT RS.66066/- AND REDUCED TO RS.27297/- BY RECTIFIC ATION U/S 154 AND WRONGLY CONFIRMED BY CIT(A) MAY KINDLY BE CANCE LLED AND APPEAL MAY KINDLY BE ACCEPTED. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE APPELLANT HAD SHOWN ADDITIONS MADE TO THE MACHINERY A/C OF RS.6,89,600/- AND THE FACTORY BUILDING A/C OF RS.8.00 LACS. THE ASSESSEE WAS ASKED TO PRODUCE THE BILLS I N THIS REGARD BUT HE FAILED TO DO SO. THE ASSESSEE STATED THAT HE WAS NOT HAVIN G ANY BILLS/VOUCHERS IN RESPECT OF THESE ADDITIONS AND HE SURRENDERED THE S AME. THE ASSESSEE REVALUED THESE ASSETS WITH THE AIM TO INCREASE THEI R VALUE IN THE BALANCE SHEET FOR FURNISHING TO THE BANK. ACCORDINGLY, THE AO DIS ALLOWED DEPRECIATION CLAIMED ON THESE ASSETS AND INITIATED PENALTY PROCE EDINGS. DURING THE PENALTY PROCEEDINGS, THE ASSESSE FILED WRITTEN REPLY BEFORE THE AO ALONGWITH VARIOUS JUDGMENTS OF THE COURTS IN SUPPORT OF HIS CONTENTIO N. THE AO DISTINGUISHED ALL THESE CASE LAWS VIDE HIS PENALTY ORDER UNDER AP PEAL. WHILE LEVYING THE PENALTY, THE AO OBSERVED THAT: LOOKING TO ALL THE FACTS OF THE CASE AND GIVEN DUE CONSIDERATION TO THE ASSESSEE ARGUMENTS, IT IS CONCLUDED THAT THE AS SESSEE HAD CLAIMED WRONG DEPRECIATION ON ACCOUNT OF ADDITIONS MADE IN MACHINERY AND FACTORY BUILDING ACCOUNTS AMOUNTING TO RS.82,500/- AND RS.80,000/- RESPECTIVELY WHEN NO ADDITIONS WERE ACTUALLY MADE T O THESE ASSETS AND ITA NO.92(ASR)/2012 3 THUS THE ASSESSEE HAD FURNISHED THE INACCURATE PART ICULARS OF HIS INCOME TO THE TUNE OF RS.1,62,500/-. THEREFORE, THE MENSREA WAS ON THE PART OF THE ASSESSEE TO CONCEAL THE PARTICULARS OF HIS INCOME IN THIS WAY. AFTER CONSIDERING THE FACTS OF THE CASE, THE AO IMP OSED PENALTY U/S 271(1)(C) TO THE TUNE OF RS.66,066/- UPON THE ASSESSEE. 4. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IN THE PRESENT CASE, THE AO HAD LEVIED PENALTY U/S 271(1)(C) OF THE ACT, FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS NOT UNDER DISPUTE THAT THE ASSESSEE HAD CLAIMED WRONG DEPRECIATION ON ACCOUNT OF ADDITIONS MADE IN THE MACHINERY AND FACTORY BUILDING ACCOUNTS, WHICH HAS BEEN SURRENDERED BY THE ASSESSEE TO BUY PEACE OF MIND. THE EXPLANATI ON HAD BEEN SUBMITTED DURING THE ASSESSMENT PROCEEDINGS AS WELL AS IN THE PENALTY PROCEEDINGS. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAD SUBMITTED INACCURATE PARTICULARS OF INCOME. IN SUCH CIRCUMSTANCES AND FA CTS OF THE CASE, THE AO CANNOT LEVY PENALTY U/S 271(1)(C) OF THE ACT. RELIA NCE IS PLACED ON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAJNISH NATH AGGARWAL (2008) 219 CTR 590, WHERE THE ASSESSEE SURRENDERED INCOME ON ACCOUNT OF UNCORROBORATED F REIGHT CHARGES DEBITED IN PROFIT & LOSS ACCOUNT MERELY TO BUY PEACE OF M IND AND TO AVOID FURTHER ITA NO.92(ASR)/2012 4 LITIGATION. IT WAS ALSO HELD BY THE HONBLE PUNJAB & HARYANA HIGH COURT THAT THERE IS NO ERROR IN THE ORDER OF THE TRIBUNAL DELETING THE PENALTY LEVIED U/S 271(1)(C) AND NO SUBSTANTIAL QUESTION OF LAW AR ISES. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO IS DIRE CTED TO CANCEL THE PENALTY AND THE ORDER OF THE LD. CIT(A) IS REVERSED ACCORDI NGLY. THUS, ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.92(ASR)/2012 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH AUGUST, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBE DATED: 28 TH AUGUST, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. KAMAL SOOD S/O SH. VED PAUL SOOD, MOGA. 2. THE DCIT, CIRCLE, MOGA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.