Nitrochem India Pvt.Ltd., Baroda V. The ACIT.,Cent.Circle-2, Baroda

ITSSA 748/AHD/2010

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0533 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-12-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 18-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Depreciation

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .# ## #. . . . % % % %, , , , &' ( & ' &' ( & ' &' ( & ' &' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) IT(SS)A NO.748, 749 AND 754/AHD/2010 [ASSTT.YEAR : 2003-2004, 2004-05 AND 2006-07] NITROCHEM INDIA P. LTD. 74, SAMPATRAO COLONY ALKAPURI, BARODA. PAN : AAACN 7067 P /VS. ACIT, CENT.CIR.2 BARODA. ( (( ( *+ *+ *+ *+ / APPELLANT) ( (( ( ,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ./ 0 1 & / ASSESSEE BY : SHRI MUKUND BAKSHI ( 0 1 & / REVENUE BY : SMT.SONIA KUMAR, SR.DR 3 0 /4' / DATE OF HEARING : 4 TH DECEMBER, 2014 567 0 /4' / DATE OF PRONOUNCEMENT : 09-01-2015 &8 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THESE THREE APPEALS BY THE ASSESSEE FOR THE ASSTT.YEARS 2003-04, 2004-05 AND 2 006-07 ARE DIRECTED AGAINST THE ORDER OF THE CIT(A). THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THERE IS ONLY ONE IDENTICAL ISSUE IN ALL THESE THREE APPEALS PREFERRE D BY THE ASSESSEE. THE IDENTICAL GROUNDS OF THE APPEALS OF THE ASSESSEE IN ALL THREE APPEALS ARE AS UNDER: IT(SS)A NO.748, 749 AND 754/AHD/2010 -2- ASSTT.YEAR : 2003-04 1. THE LD.CIT(A) HAS ERRED I LAW AND IN FACT IN CO NFIRMING THE ACTION OF THE AO IN LEVYING PENALTY U/S.271(1)(C) O F RS.1,25,000/-ON THE DISALLOWANCE OF DEPRECIATION CLAIMED BY THE APP ELLANT AMOUNTING TO RS.3,38,964/- ON THE GROUND THAT THE A PPELLANT HAS CLAIMED DEPRECIATION ON NON-EXISTENT ASSETS WHICH A MOUNTS TO CONCEALMENT OF INCOME BY FURNISHING INACCURATE PART ICULARS OF INCOME. THE PENALTY OF RS.1,25,000/- LEVIED ON DEP RECIATION SO CLAIMED IS IN COMPLETE DISREGARD OF LAW AND THE FAC TS AND, THEREFORE, THE SAME IS PRAYED TO BE CANCELLED. ASSTT.YEAR : 2004-05 1. THE LD.CIT(A) HAS ERRED I LAW AND IN FACT IN CO NFIRMING THE ACTION OF THE AO IN LEVYING PENALTY U/S.271(1)(C) O F RS.92,000/-ON THE DISALLOWANCE OF DEPRECIATION CLAIMED BY THE APP ELLANT AMOUNTING TO RS.2,54,808/- ON THE GROUND THAT THE A PPELLANT HAS CLAIMED DEPRECIATION ON NON-EXISTENT ASSETS WHICH A MOUNTS TO CONCEALMENT OF INCOME BY FURNISHING INACCURATE PART ICULARS OF INCOME. THE PENALTY OF RS.92,000/- LEVIED ON DEPRE CIATION SO CLAIMED IS IN COMPLETE DISREGARD OF LAW AND THE FAC TS AND, THEREFORE, THE SAME IS PRAYED TO BE CANCELLED. ASSTT.YEAR : 2006-07 1. THE LD.CIT(A) HAS ERRED I LAW AND IN FACT IN CO NFIRMING THE ACTION OF THE AO IN LEVYING PENALTY U/S.271(1)(C) O F RS.30,000/-ON THE DISALLOWANCE OF DEPRECIATION CLAIMED BY THE APP ELLANT AMOUNTING TO RS.87,658/- ON THE GROUND THAT THE APP ELLANT HAS CLAIMED DEPRECIATION ON NON-EXISTENT ASSETS WHICH A MOUNTS TO CONCEALMENT OF INCOME BY FURNISHING INACCURATE PART ICULARS OF INCOME. THE PENALTY OF RS.30,000/- LEVIED ON DEPRE CIATION SO CLAIMED IS IN COMPLETE DISREGARD OF LAW AND THE FAC TS AND, THEREFORE, THE SAME IS PRAYED TO BE CANCELLED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS PURCHASED PLANT & MACHINERY FOR MANUFACTURING OF CH EMICALS IN THE EARLIER ASSTT.YEAR 2002-03, AND SINCE THE ASSESSEE COULD NO T PROVE WITH DOCUMENTARY EVIDENCES FOR THE PURCHASE THEREOF, THE SAME WAS AD DED AS INCOME IN THE HANDS IT(SS)A NO.748, 749 AND 754/AHD/2010 -3- OF THE ASSESSEE FOR A.Y.2002-03. HE SUBMITTED THAT IN VIEW OF THE ADDITION MADE IN EARLIER ASSTT.YEAR 2002-03 FOR THE COST OF PLANT & MACHINERY, THE DEPARTMENT HAS DISALLOWED PART OF THE ASSESSEES CL AIM OF DEPRECIATION AS WDV OF THE PLANT & MACHINERY HAS BEEN DETERMINED AT A L ESSER FIGURE FOR ALL THREE ASSESSMENT YEARS IN APPEAL BEFORE US, AND THEREFORE , THE LESSER AMOUNT OF DEPRECIATION WAS ALLOWED TO THE ASSESSEE. HE SUBMI TTED THAT ALL THESE DISALLOWANCES OF DEPRECIATION CLAIMED BY THE ASSESS EE HAS ALSO BEEN VISITED WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR THE RELEVANT THREE ASSESSMENT YEARS. HE SUBMITTED THAT THE CLAIM OF THE ASSESSEE WAS BONA FIDE AND THE ASSESSEE HAS CONTESTED SUCH ADDITION OF COST OF PLA NT & MACHINERY IN THE ASSTT.YEAR 2002-03 TO THE LEVEL OF THE TRIBUNAL. T HE ORDER OF THE TRIBUNAL FOR A.Y.2003-03 WAS PRONOUNCED ON 7.4.2009, WHEREAS THE CLAIM OF DEPRECIATION FOR THE RELEVANT ASSTT.YEARS 2003-04, 2004-05 AND 2 006-07 WERE MADE BEFORE THE AO, MUCH BEFORE THE DATE OF ORDER OF THE TRIBUN AL. HE SUBMITTED THAT ALL MATERIAL FACTS WERE AVAILABLE ON RECORD OF THE AO H IMSELF, AND THEREFORE, THERE SHOULD NOT BE ANY QUESTION OF LEVYING OF PENALTY UN DER SECTION 271(1)(C) OF THE ACT. 4. THE LEARNED DR SUBMITTED THAT SINCE THE ASSESSEE HAS LOST QUANTUM APPEALS IN THIS CASE, AND DISALLOWANCE OF PART OF DEPRECIATION WAS CONFIRMED, THE ASSESSEE SHOULD BE LIABLE TO PENALTY UNDER SECT ION 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. SHE RELIED ON THE ORDER OF THE AO. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT IN THIS CASE ALL THE MATERIAL FACTS RELEVANT FOR THE ASSESSMENTS WERE DISCLOSED BY THE ASSESSEE AT THE T IME OF ASSESSMENT ITSELF. MERELY BECAUSE THE ASSESSEES APPEAL TO THE TRIBUNA L FOR THE EARLIER ASSTT.YEAR 2003-03 AGAINST THE ADDITION OF COST OF PLANT & MAC HINERY WAS DISMISSED BY THE TRIBUNAL, RESULTING IN LESSER AMOUNT OF DEPRECIATIO N BEING ALLOWED TO THE ASSESSEE ON REDUCED AMOUNT OF WDV FOR THE RELEVANT THE ASSTT.YEARS 2003-04, IT(SS)A NO.748, 749 AND 754/AHD/2010 -4- 2004-05 AND 2006-07, IT COULD NOT BE SAID THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THERE IS NO MATERIAL BEFORE US TO SUGGEST THAT CLAIM OF D EPRECIATION MADE BY THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS WERE NOT BONA FIDE . THE ASSESSEE HAS CONTESTED THE ADDITION OF COST OF PLANT & MACHINERY FOR A.Y.2002-03 UPTO THE LEVEL OF THE TRIBUNAL. THE ASSESSEE HAS CLAIMED HI GHER AMOUNT OF DEPRECIATION ON WDV AS PER ITS RECORDS FOR THE RELEVANT ASSTT.YE ARS 2003-04, 2004-05 AND 2006-07, MUCH BEFORE THE DATE OF PRONOUNCEMENT OF T HE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR EARLIER ASSTT.YEAR 2002-03 ON 7.4.2009. THE RELEVANT FIGURE OF CLAIM OF DEPRECIATION OF THE ASSESSEE AND WDV OF THE PLANT & MACHINERY WERE ON RECORD OF THE DEPARTMENT. IN PEN ALTY PROCEEDINGS, THE ONUS IS ON THE REVENUE TO PROVE THAT THE ASSESSEE IS GUI LTY OF CONCEALED OF INCOME OR FILING OF INACCURATE PARTICULARS INCOME. IN THESE FACTS OF THE CASE, WE FIND THAT THE REVENUE COULD NOT PROVE THAT THE ASSESSEE HAS F ILED INACCURATE PARTICULARS OF INCOME, AND THAT THE CLAIM OF THE ASSESSEE WAS NOT BONA FIDE . IN THIS VIEW OF THE MATTER, WE HOLD THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, WHICH IS ACCORDINGLY CANCELLE D FOR THREE ASSESSMENT YEARS IN APPEAL BEFORE US, AND THE GROUNDS OF THE APPEALS OF THE ASSESSEE IN THESE ASSESSMENT YEARS ARE ALLOWED. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## # . .. . # ## # . . . . % % % % /N.S.SAINI) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT