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

ITSSA 750/AHD/2010

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0515 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 18-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Depreciation
• Section: 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD 0 0 , 0 0 , BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI N.S. SAINI , ACCOUN TANT MEMBER ./ IT (SS) A NO .750 /AHD/ 2010 [ [ / ASSESSMENT YEAR: 2005 - 06 NITROCHEM INDIA PVT LTD, 74, SAMPATRAO COLONY, ALKAPURI, BARODA PAN : AAACN 7067 P VS ACIT, CENTRAL CIRCLE - 2, BARODA / (APPELLANT) / (RESPO NDENT) ASSESSEE(S) BY : SHRI MUKUND BAKSHI, AR REVENUE BY : SHRI B.L. YADAV, SR. DR. / DATE OF HEARING : 12 / 01/2015 / DATE OF PRONOUNCEMENT: 16 / 01 /201 5 / O R D E R PER SHRI N.S. SAINI, ACCOUNTA NT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) - IV , AHMEDABAD DATED 05 .0 7 .201 0 FOR ASSESSMENT YEAR 200 5 - 0 6 . 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE READ AS UNDER : - 1. THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) - IV, AHMEDABAD HAS ERRED IN LAW AND IN FACT IN CONFIRMING THE ACTION OF THE LD. A.O . IN LEVYING PENALTY U/S 271(1)(C) ON THE DISALLOWANCE OF DEPRECIATION CLAIMED BY THE APPELLANT AMOUNTING TO RS.1,91,633/ - , ON THE GROUND THAT THE APPELLANT HAS CLAIMED DEPRECIATION ON NON - EXISTENT ASSETS WHICH AMOUNTS TO CONCEALMENT OF INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME. THE LEVY OF PENALTY ON DEPRECIATION CLAIMED IS IN COMPLETE DISREGARD OF LAW AND THE FACTS AND THEREFORE, TH E SAME IS PRAYED TO BE CANCELLED. IT (SS) A NO. 750 /AHD/20 1 0 NITROCHEM INDIA PVT LTD V. ACIT - AY 200 5 - 0 6 - 2 - 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - IV, AHMEDABAD HAS ERRED IN LAW AND IN FACT IN CONFIRMING THE ACTION OF THE LD. A.O. IN LEVYING PENALTY U/S 271(1)(C) ON THE ADDITIONAL INCOME OF RS.5,75,000/ - DECLARED IN THE R ETURN FILED U/S 153A OF THE ACT ON THE GROUND THAT THOUGH THE SAID INCOME WAS EARNED DURING THE YEAR, IT WAS NOT DISCLOSED IN THE REGULAR RETURN FILED FOR THE YEAR AND, THEREFORE, THE APPELLANT HAS CONCEALED THE PARTICULARS OF ADDITIONAL INCOME. THE LEVY O F PENALTY ON ADDITIONAL INCOME OF RS.5,75,000/ - IS IN COMPLETE DISREGARD OF LAW AND THE FACTS AND, THEREFORE, THE SAME IS PRAYED TO BE CANCELLED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DISCLOSED ADDITIONA L INCOME OF RS.5,75,000/ - IN THE RETURN FILED PURSUANT TO NOTICE U/S 153A OF THE ACT WHICH WAS NOT DISCLOSED IN THE RETURN FILED U/S 139(1) OF THE ACT. HE ALSO OBSERVED THAT THE ASSESSEE CLAIMED DEPRECIATION OF RS.1,91,633 IN THE RETURN OF INCOME FILED U/S 139(1) AND ALSO IN THE RETURN FILED U/S 153A OF THE ACT. HE OBSERVED THAT IN THE ASSESSMENT YEAR 2002 - 03, THE TRIBUNAL HELD THAT THE ASSESSEE CLAIMED DEPRECIATION ON ASSETS , WHICH WERE NON - EXISTENT, VIDE ORDER DATED 17.04.2005 IN ITA NO.1210/AHD/2006. TH E ASSESSING OFFICER OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS CLAIMED DEPRECIATION ON THE VERY SAME ASSETS. THEREFORE, HE LEVIED PENALTY U/S 271(1)(C) OF THE ACT FOR RS.2,42,000/ - ON THE TOTAL ADDITION OF RS.7,66,633/ - FOR CONCEAL ING THE PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. 4. ON APPEAL, THE CIT(A) CONFIRMED THE LEVY OF PENALTY. 5. BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS FILED ORDER OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF PASSED ON 04.12.2014 IN IT(SS)A NOS. 748, 749 & 754/AHD/2010 IN ASSESSMENT YEARS 2003 - 04, 2004 - 05 AND 2006 - 07 IT (SS) A NO. 750 /AHD/20 1 0 NITROCHEM INDIA PVT LTD V. ACIT - AY 200 5 - 0 6 - 3 - RESPECTIVELY, AND SUBMITTED THAT THE PENALTY LEVIED ON ACCOUNT OF DEPRECIATION CLAIMED ON ASSETS WHICH WERE HELD TO BE NON - EXISTENT BY THE TRIBUNAL IN ITS ORDER PASSED FOR ASSESSMENT YEAR 2002 - 03 WAS DELETED. 6. WE FIND THAT THE TRIBUNAL, IN ASSESSEES OWN CASE , IN IT(SS)A NOS. 748, 749 & 754/AHD/2010 FOR ASSESSMENT YEARS 2003 - 04, 2004 - 05 AND 2006 - 07, VIDE ITS ORDER DATED 0 4.12.2014 HAS HELD AS UNDER: - 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 TIME OF ASSESSMENT ITSELF. MERELY BECAUSE THE ASSESSEE'S APPEAL TO THE TRIBUNAL FOR THE EARLIER ASSTT. YEAR 2003 - 03 AGAINST THE ADDITION OF COST OF PLANT & MACHINERY WAS DISMISSED BY THE TRIBUNAL, RESULTING IN LESSER AMOUNT OF DEPRECIATION BEING ALLOWED TO THE ASSESSEE ON RE DUCED AMOUNT OF WDV FOR THE RELEVANT THE ASSTT. YEARS 2003 - 04, 2004 - 05 AND 2006 - 07, IT COULD NOT BE SAID THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THERE IS NO MATERIAL BEFORE US TO SUGGEST THAT CLAIM OF DEPRECIATION 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 HIGHER AMOUNT OF DEPRECIATION ON WDV AS PER ITS RECORDS FOR THE RELEVANT ASSTT. YEARS 2003 - 04, 2004 - 05 AND 2006 - 07, MUCH BEFORE THE DATE OF PRONOUNCEMENT OF THE TRIBUNAL ORDER IN ASSESSEE'S 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 PENALTY PROCEEDINGS, THE ONUS IS ON THE REVENUE TO PROVE THAT THE ASSESSEE IS GUILTY 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 FILED 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 LEV Y OF PENALTY UNDER SECTION 271(1 )(C) OF THE ACT, WHICH IS ACCORDINGLY CANCELLED FOR THREE ASSESSMENT YEARS IN APPEAL IT (SS) A NO. 750 /AHD/20 1 0 NITROCHEM INDIA PVT LTD V. ACIT - AY 200 5 - 0 6 - 4 - BEFORE US, AND THE GROUNDS OF THE APPEALS OF THE ASSESSEE IN THESE ASSESSMENT YEARS ARE ALLOWED. 7. RESPECTFULLY FOLLOWING THE AFORESAID ORD ER OF THE TRIBUNAL, WE DELETE THE LEVY OF PENALTY ON CLAIM OF DEPRECIATION OF RS.1,91,633/ - . 8. WITH REGARD TO THE DISCLOSURE OF ADDITIONAL INCOME OF RS.5,75,000/ - IN THE RETURN FILED PURSUANT TO NOTICE U/S 153A OF THE ACT, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE CIT(A) WHILE CONFIRMING THE PENALTY HAD RELIED ON THE DECISION OF THE THIRD MEMBER OF AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. KIRIT DAHYABHAI PATEL (2009) 121 ITD 159 (AHD) (TM). HE SUBMITTED THAT THE DE CISION OF THE TRIBUNAL IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA) WAS REVERSED BY THE HONBLE GUJARAT HIGH COURT IN A RECENT DECISION DATED 03.12.2014 , REPORTED IN 2015 (1) TMI 201, AND FILED COPY OF THE SAME. 9. WE FIND THAT THE HONBLE GUJARAT HIGH C OURT IN THE CASE OF KIRTI DAHYABHAI PATEL (SUPRA) HAS HELD AS UNDER: - VALIDITY OF RESTORATION OF PENALTY MADE BY TRIBUNAL - AVAILABILITY OF BENEFIT OF EXPLANATION 5 - WHETHER THE TRIBUNAL WAS RIGHT IN RESTORING THE PENALTY IMPOSED U/S 271(1)(C) HOLDING T HAT BENEFIT UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT WOULD BE AVAILABLE ONLY FOR PERIOD WHERE DUE DATE FOR FILING THE RETURN U/S 139(1) OF THE ACT HAD NOT EXPIRED - HELD THAT: - IN COMMISSIONER OF INCOME - TAX VERSUS SDV. CHANDRU [2003 (12) TMI 40 - MADRAS HIGH COURT] IT HAS BEEN HELD THAT IN A CASE WHERE THE ASS E SSEE HAD NOT DISCLOSED HIS INCOME IN THE RETURNS FILED FOR THE PREVIOUS YEAR WHICH HAVE ENDED PRIOR TO THE DATE OF THE SEARCH AND, IN THE STATEMENT GIVEN U/ X 132(4) THE ASSESSEE ADMITTED TH E RECEIPT OF UNDISCLOSED INCOME FOR THOSE YEARS AND ALSO SPECIFIED THE MANNER IN WHICH SUCH INCOME HAD BEEN DERIVED AND THEREAFTER PAYS THE TAX ON THAT UNDISCLOSED INCOME WITH INTEREST, THEN SUCH UNDISCLOSED INCOME WOULD GET IMMUNISED FROM THE LEVY OF PENA LTY. IT (SS) A NO. 750 /AHD/20 1 0 NITROCHEM INDIA PVT LTD V. ACIT - AY 200 5 - 0 6 - 5 - ALSO IN COMMISSIONER INCOME TAX, BILASPUR CG. VERSUS SHRI ABDUL RASHID [2013 (5) TMI 328 - CHATTISGARH HIGH COURT] IT HAS BEEN HELD THAT IN ORDER TO GET THE BENEFIT OF IMMUNITY UNDER CLAUSE(2) OF EXPLANATIONS TO SECTION 271(1)(C) OF THE INCOME TAX ACT , IT IS NOT NECESSARY TO FILE THE RETURN BEFORE THE DUE DATE PROVIDED THAT THE ASSESSEE HAD MADE A STATEMENT, DURING THE SEARCH AND EXPLAINED THE MANNER IN WHICH THE SURRENDERED AMOUNT WAS DERIVED, AND PAID TAX AS WELL AS INTEREST ON THE SURRENDERED AMOUNT - THE VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS - THE ASSESSEES HAD SATISFIED ALL THE CONDITIONS WHICH ARE REQUIRED FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY U/S 271(1) - THE PROVISION DOES NOT SPECIFY ANY TIME LIMIT DURING WHICH THE AFORESAID AMOUNT I. E. THE AMOUNT OF PENALTY WITH INTEREST HAS TO BE PAID - WHEN THE ASSESSEES HAVE PAID THE ENTIRE AMOUNT WITH INTEREST, THE AO OUGHT TO HAVE GRANTED THEM IMMUNITY AVAILABLE U/S 271(1)(C) - RELYING UPON ASSISTANT COMMISSIONER OF INCOME TAX, UDAIPUR VERSUS M/S . GEBILAL KANHAIALAL HUF, THROUGH KARTA, UDAIPUR [2012 (9) TMI 297 - SUPREME COURT] - THE PENALTY U/S 271(1)(C) CANNOT BE LEVIED ON THE INCOME SHOWN IN THE RETURN FILED UNDER SECTION 153A - THE ORDER OF THE TRIBUNAL IS SET ASIDE - DECIDED IN FAVOUR OF ASSE SSEE. 10. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE GUJARAT HIGH COURT, WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE LEVY OF PENALTY ON ADDITIONAL INCOME OF RS.5,75,000/ - DISCLOSED IN THE RETURN OF INCOME FILED U/S 153A OF THE ACT. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY , THE 16 TH OF JANUARY , 201 5 AT AHMEDABAD. SD/ - SD/ - ( G.C. GUPTA ) VICE PRESIDEN T ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 16 / 01 /201 5 * BIJU T , PS IT (SS) A NO. 750 /AHD/20 1 0 NITROCHEM INDIA PVT LTD V. ACIT - AY 200 5 - 0 6 - 6 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDE NT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - IV, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, //TRUE COPY// / ( DY ./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD