The ACIT, Circle-8, Ahmedabad V. M/s. Vepar Pvt.Ltd., Ahmedabad

ITA 994/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57204 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-02-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 01-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Commercial expediency

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER APPEAL(S) / CO(S) BY SL. NO(S). ITA NO(S) / CO NO(S) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 994/AHD/2010 2002-03 ACIT CIR-8 AHMEDABAD VEPAR PVT.LTD. KAIVANNA 9 TH FLOOR, PANCHVATI ELLISBRIDGE AHMEDABAD (ASSESSEE) PAN : AAACV3821F 2. 995/AHD/2010 2003-04 -DO- -DO- 3. CO NO.132/AHD/10 (O/O ITA 994/A/10) 2002-03 ASSESSEE REVENUE 4. CO NO.133/AHD/10 (O/O ITA 995/A/10) 2003-04 ASSESSEE REVENUE ASSESSEE(S) BY : SHRI VIJAY RANJAN REVENUE BY : SHRI BHUVNESH KULSHRESTHA, SR.D.R. & ' '$ / / / / DATE OF HEARING : 29/02/2012 )*+ ' '$ / DATE OF PRONOUNCEMENT : 2/3/2012 #, / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : REVENUE IS IN APPEAL AND ASSESSEE IS IN CROSS OBJEC TION ARISING FROM A CONSOLIDATED ORDER OF THE CIT(A)-XIV, AHMEDA BAD OF ASSESSMENT YEARS 2002-03 & 2003-04 DATED 29.12.20 09. DELETION OF ITA NOS.994 & 995/AHD/2010(BY REVENUE) AND CO NOS.132 & 133/AHD/2010 (BY ASSESSEE) ASST.YEARS - 2002-03 & 2003-04 - 2 - PENALTY LEVIED U/S.271(1)(C) OF RS.4,98,951/- AND RS.5,85,058/- RESPECTIVELY, HAS BEEN CHALLENGED BY THE REVENUE. 2. FOR BOTH THE YEARS, PENALTY U/S.271(1)(C) WAS LE VIED VIDE TWO SEPARATE ORDERS BOTH IDENTICALLY DATED 29.10.2009 I N RESPECT OF PARTIAL DISALLOWANCE OF CLAIM OF DEPRECIATION. WE HAVE BE EN INFORMED THAT THE FIRST APPELLATE AUTHORITY HAS GRANTED RELIEF AND AG AINST THE SAID ORDER OF LD.CIT(A), REVENUE HAD GONE IN APPEAL WHEREIN THE T RIBUNAL HAS REVERSED THE FINDING OF CIT(A) AND CONFIRM THE DISA LLOWANCE MADE BY THE AO. THIS FACT IS EVIDENT FROM PARA-2.2 ( FOR AY 20 02-03 ); REPRODUCED BELOW:- 2.2. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), T HE DEPARTMENT FILED AN APPEAL BEFORE THE HONBLE ITAT. THE HONB LE ITAT IN ITA NO.1239/AHD/2006 DATED 27.2.2009 CONFIRMED THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF DEPRECI ATION ON FACTORY BUILDING THEREBY REVERSING THE ORDER OF THE LD. CIT(A). 3. LIKEWISE, FOR AY 2003-04 VIDE PARA-2.2, THE AO H AS MENTIONED THE SAID FACT AS FOLLOWS:- 2.2. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), T HE DEPARTMENT FILED AN APPEAL BEFORE THE HONBLE ITAT NO.29.6.200 6. THE HONBLE ITAT IN ITA NO.1641/AHD/2006 DATED 27.2.200 9 CONFIRMED THE DISALLOWANCE MADE BY THE A.O. ON ACCO UNT OF DEPRECIATION OF FACTORY BUILDING THEREBY REVERSING THE ORDER OF THE LD.CIT(A). 4. THEREAFTER, ONE MA WAS DECIDED BY THE ITAT AHME DABAD BENCH D TITLED AS VEPAR PVT.LTD. VS. ACIT BEARING M A NOS.139,140 AND ITA NOS.994 & 995/AHD/2010(BY REVENUE) AND CO NOS.132 & 133/AHD/2010 (BY ASSESSEE) ASST.YEARS - 2002-03 & 2003-04 - 3 - 141/AHD/2009 (ARISING OUT OF ITA NOS.1239 & 1641/AH D/2008 AND ITA NO.957/AHD/2006) DATED 30/11/2009, WHEREIN VIDE PA RA-2, IT WAS CONCLUDED AS UNDER: 2. THE ONLY COMMON ISSUE IN THESE THREE MA OF THE ASSESSEE IS THAT THE FACTUAL THE TRIBUNAL HAS COMMITTED A MISTA KE THAT THE SUBSIDIARY-COMPANY HAD OCCUPIED A PORTION OF THE PR EMISES, WHEREAS AS PER THE ASSESSEE, THE ASSESSEE IS NOT A SUBSIDIARY- COMPANY AND THIS FACTUAL MISTAKE HAS MADE SUBSTANTI AL DIFFERENCE IN THE FACTS. WE FIND THAT THE TRIBUNALS FINDING IS TOTALLY BASED ON THIS ASPECT ALSO, WHICH READS AS UNDER:- WE FIND THAT THE ASSESSEE IS A SUBSIDIARY COMPANY AND USING THIS BUILDING FOR THEIR BUSINESS ONLY AND THE RE ARE DOING STITCHING WORKS ON JOB-WORK BASIS FOR THE AS SESSEE BUT ACTUALLY THE BUILDING IS NOT USED FOR THE BUSINESS OF THE ASSESSEE. ACCORDINGLY, THE DEPRECIATION IS RIGHTLY DISALLOWED BY THE AO AND WE RESERVE THE ORDER OF TH E CIT(A) OF THIS ISSUE WE FIND THAT IN THE PRESENT CASE ALSO THE FACTUAL P OSITION AVAILABLE ON RECORDS CLEARLY SHOWS THAT PART OF THE BUSINESS PREMISES WAS MADE AVAILABLE TO THE SUBSIDIARY COMPANY UNDER BUSI NESS COMPULSION AND ON ACCOUNT OF COMMERCIAL EXPEDIENCY FOR THE SIMPLE REASON THAT PART OF THE STITCHING PROCESS HA D TO BE CARRIED OUT UNDER THE DIRECT TECHNICAL SUPERVISION OF THE A SSESSEE COMPANY WHICH WAS NOT POSSIBLE IF THIS WORK WOULD HAVE BEEN CARRIED OUT BY THE SUBSIDIARY COMPANY ELSEWHERE. ACCORDINGLY, THE BUSINESS PREMISES WERE FULLY USED FOR THE BUSINESS PURPOSES OF THE ASSESSEE COMPANY AND FOR NO OTHER PURPOSE AND THEREFORE THE ASSESSEE COMPANY IS CLEARLY ELIGIBLE FOR GRANT OF DEPRECIATI ON IN RESPECT OF THE WHOLE BUSINESS PREMISES. ACCORDINGLY, WE AMEND THE FINDINGS OF THE TRIBUNAL TO THAT EXTENT AND ALLOW THESE MAS OF THE ASSESSEE. ACCORDINGLY, THE RESULT IN THE TRIBUNALS DECISION IS THAT THE REVENUES APPEAL IN ITA NO.1239/AHD/2006 ON THIS ISSUE IS DISMISSED. ITA NOS.994 & 995/AHD/2010(BY REVENUE) AND CO NOS.132 & 133/AHD/2010 (BY ASSESSEE) ASST.YEARS - 2002-03 & 2003-04 - 4 - 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, ONCE THE ADMITTED FACTUAL POSITION IS THAT THE IMPUGNED ADDITION HAS ALREADY BEEN DELETED BY THE RESPECTED COORDINATE BENCH, THEREFORE IN CONSEQ UENCE THEREOF NO CONCEALMENT PENALTY SHOULD SURVIVE. MOREOVER, TH E ISSUE OF DISALLOWANCE OF DEPRECIATION WAS FOUND TO BE A CONT ENTIOUS ISSUE. LD. CIT(A) HAS DEALT WITH THIS LEGAL PROPOSITION AND FO LLOWING CIT VS. VIDYA GAURI NATVARLAL & OTHERS 238 ITR 91 (GUJ.) HELD THA T IN SUCH A SITUATION THE ASSESSEE CANNOT BE HELD AS GUILTY OF FURNISHING OF INACCURATE PARTICULARS. OVERALL CIRCUMSTANCES, THUS DEMAND T O AFFIRM THE FINDINGS OF THE CIT(A) AND ONCE THE QUANTUM HAS ALREADY BEEN DELETED THEREFORE THERE WAS NO OCCASION TO INTERFERE WITH THE SAID FI NDINGS OF THE LD.CIT(A). THE DELETION IS THEREFORE AFFIRMED. GROUND IS DISM ISSED. ASSESSEES CROSS OBJECTION NOS.132 & 133/AHD/2010 6. THE CROSS OBJECTIONS ARE SIMPLY IN SUPPORT OF TH E DELETION OF PENALTY. SINCE THE APPEALS OF THE REVENUE HAVE AL READY BEEN DISMISSED, THEREFORE THESE CROSS OBJECTIONS DO NOT SURVIVE. 7. IN THE RESULT, REVENUES APPEALS AS WELL AS CR OSS OBJECTIONS BOTH ARE DISMISSED. SD/- SD/- ( ANIL CHATURVEDI ) ( MUKUL KR . SHRAWAT ) ACCOUNTANT MEMBER JUDI CIAL MEMBER AHMEDABAD; DATED 2/ 3 /2012 -'.., .../ T.C. NAIR, SR. PS ITA NOS.994 & 995/AHD/2010(BY REVENUE) AND CO NOS.132 & 133/AHD/2010 (BY ASSESSEE) ASST.YEARS - 2002-03 & 2003-04 - 5 - #, ' /0 1#0+ #, ' /0 1#0+ #, ' /0 1#0+ #, ' /0 1#0+/ COPY OF THE ORDER FORWARDED TO : 1. 23 / THE APPELLANT 2. /423 / THE RESPONDENT. 3. 5 / CONCERNED CIT 4. 5() / THE CIT(A)-IV, AHMEDABAD 5. 089 / , , / LEARNED DEPARTMENTAL REPRESENTATIVE, ITAT, AHMEDABAD 6. 9: ;& / GUARD FILE. #, #, #, #, / BY ORDER, 40 / //TRUE COPY// < <<