Param Jewellers Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-5(2), Ahmedabad

MA 216/AHD/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0145 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 12-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: R B RATHI
• Keywords: Depreciation; Wrong claim; Capital expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R.MEENA, ACCOUNTANT MEMBER MA NO.216/AHD/2012 (IN ./ IN I.T.A. NO.2595/AHD/2010) ( % & '& / ASSESSMENT YEAR : 2003-04) PARAM JEWELS PVTLTD. 234, NEW CLOTH MARKET O/S. RAIPUR GATE AHMEDABAD % / VS. THE INCOME TAX OFFICER WARD-5(2) AHMEDABAD ./ ./ PAN/GIR NO. : AABCP 3048 H ( / APPLICANT ) .. ( / RESPONDENT ) / APPLICANT BY : SHRI R.B. RATHI / RESPONDENT BY : SHRI Y.P.VERMA, SR.D.R. / DATE OF HEARING : 15/03/2013 !'# / DATE OF PRONOUNCEMENT : 3/5/2013 $% / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THROUGH THIS MISCELLANEOUS PETITION FILED ON 12.1 1.2012, THE APPLICANT HAS STATED THAT A MISTAKE HAS BEEN COMMIT TED BY THE TRIBUNAL VIDE ITS ORDER DATED 25/11/2010 AS PER THE PETITION AS FOLLOWS:- THIS M.A PETITION HAS BEEN FILED BEFORE YOUR HONOU R IN CONSEQUENCE TO UNREPORTED HONBLE GUJARAT HC JUDGEM ENT IN TAX APPEAL NO.1980/2008 IN CASE OF C.I.T V/S. WEST INN LTD VIDE ORDER DATED 25.11.2009, WHEREIN THE LORDSHIP OF GUJ ARAT HIGH COURT HAS HELD AS UNDER THAT THE ASSESSEE BOOKS OF ACCOUNTS WAS DULY AUDITED AND TAX REPORT WAS FILED ALONGWITH RET URN OF INCOME. THE CHARTERED ACCOUNTANT HAS CERTIFIED THE CLAIM OF DEPRECIATION IN ACCORDANCE WITH THE PROVISION CONTAINED IN THE I NCOME TAX ACT. THE TRIBUNAL WAS, THEREFORE, OF THE VIEW THAT THE A SSESSEE WAS MA NO.216/AHD/2012 (IN ITA NO.2595/AHD/2010) PARAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2003-04 - 2 - BOUND TO RELY ON TECHNICAL EXPERT ESPECIALLY WHEN T HE PROVISIONS CONTAINED IN THE INCOME TAX ARE COMPLEX AND COMPLIC ATED. A NUMBER OF AMENDMENTS ARE BEING TAKEN PLACE EVERY YE AR. IT IS NOT POSSIBLE FOR AN INDIVIDUAL OR A COMPANY TO HAVE KNO WLEDGE ABOUT THE ACT. BASED ON THESE OBSERVATIONS THE TRIBUNAL HAS COME TO THE CONCLUSION THAT IF THE ASSESSEE HAS ACTED ON THE AD VISE GIVEN BY THE CHARTERED ACCOUNTANT IT CANNOT BE SAID THAT THE ASS ESSEE HAS MADE A FALSE CLAIM. THE TRIBUNAL HAS ALSO RELIED ON THE DECISION OF THIS COURT IN THE CASE OF BTX CHEMICAL PVT LTD. VS CIT 288 ITR 196 (GUJ) . WHEREIN IT IS HELD THAT THE ASSESSEE IS BOUND TO RELY ON THE REPORT OF CHARTERED ACCOUNTANT. CONSIDERING ALL THE ABOVE ASPECTS OF THE MATTER, TH E TRIBUNAL HAS DELETED THE PENALTY IMPOSED BY THE ASS ESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. WE ARE IN COMP LETE AGREEMENT WITH THE FINDING RECORDED BY THE TRIBUNAL AND ONE O F THE VIEW THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER IN NO W AY IS HOLD TO BE JUSTIFIED. WE ALSO RELY ON THE JUDGEMENT OF PRICE WATERHOUSE C OOPER VS C.I.T. (SC) REPORTED AT (2012) 253 CTR (SC), WHEREI N THE LORDSHIP HELD THAT EVEN THOUGH THE STATEMENT OF PARTICULARS IN FORM NO.3CD INDICATED THAT THE PROVISION TOWARDS PAYMENT OF GRATUITY WAS NOT ALLOWABLE, ASSESSEE CLAIMED DEDUCTION THERE ON IN ITS RETURN-TRIBUNAL AS WELL AS THE HIGH COURT HAVE ACKN OWLEDGED THE FACT THAT THIS WAS A SILLY MISTAKE ON THE PART OF THE ASSESSEE-FACT THAT THE TAX AUDIT REPORT WAS FILED ALONG WITH THE RETURN AND THAT IT UNEQUIVOCALLY STATED THAT THE PROVISION FOR PAYMENT OF GRATUITY WAS NOT ALLOWABLE AS DEDUCTION UNDER S.40A(7) INDICATES THAT THE ASSESSEE MADE A COMPUTATIONAL ERROR IN ITS RETURN-C ONTENTS OF THE TAX AUDIT REPORT SUGGEST THAT THERE WAS NO QUESTION OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS B Y THE ASSESSEE- ALL THAT HAS HAPPENED IS THAT THE ASSESSEE FAILED T O ADD BACK THE PROVISION FOR GRATUITY TO ITS TOTAL INCOME ON ACCOU NT OF A BONAFIDE AND INADVERTENT ERROR-CALIBRE AND EXPERTISE OF THE ASSESSEE, WORLDWIDE REPUTED MANAGEMENT CONSULTANT, HAS NOTHIN G TO DO WITH MA NO.216/AHD/2012 (IN ITA NO.2595/AHD/2010) PARAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2003-04 - 3 - THIS INADVERTENT ERROR-THEREFORE, IMPOSITION OF PEN ALTY IS NOT JUSTIFIED. WE THEREFORE, PRAY BEFORE YOUR HONOUR CONSIDERING T HE ENTIRE OF FACTS AND CIRCUMSTANCES AND THE LEGAL POSITION STAT ED ABOVE, THERE BEING NO WILLFUL ATTEMPT OF EVADING ANY TAX NOR BEI NG ANY WITHHOLDING OF CORRECT POSITION FROM THE KNOWLEDGE OF THE TAX AUTHORITIES AND COMPANY IS ALWAYS CO-OPERATIVE TO O BEY THE TAX LAWS, AND WHEN COMPANY CAME INTO THE KNOWLEDGE OF C ORRECT POSITION IT AGREED TO ADDITION OF RS.1,73,040/- AND FILED NO APPEAL. IN THESE CIRCUMSTANCES WHEN THERE IS NO WILLFUL ACT ON THE PART OF COMPANY TO CONCEAL THE INCOME, THE LEVY OF PENALTY UNDER S.271(1)(C) OF THE ACT IS BAD IN LAW AND WE REQUEST YOUR HONOUR TO DELETE THE SAME. 2. THE MAIN PLANK OF THE ARGUMENT OF LD.AR BEFORE U S IS THAT IN THE LIGHT OF A POSITION OF THE HONBLE GUJARAT HIGH COU RT PRONOUNCED IN THE CASE OF CIT VS. WEST INN LIMITED, TAX APPEAL NO.198 0 OF 2008 DATED 25/11/2009, THE MISTAKE COMMITTED BY A CHARTERED ACCOUNTANT/ACCOUNTANT SHOULD NOT BE TREATED AS A M ISTAKE OF THE ASSESSEE, HENCE MUST NOT BE PENALIZED. THE ASSESSE E HAS ACTED IN A BONA FIDE MANNER AS PER THE ADVICE OF A PROFESSIONAL HEN CE THERE WAS NO WILLFUL CONCEALMENT ON THE PART OF THE ASSESSEE. THE LD.AR HAS ALSO PLEADED THAT IN A LATEST DECISION OF HONBLE SUPREME COURT PRONO UNCED IN THE CASE OF PRICE WATERHOUSE COOPERS (P) LTD. VS. CIT (2012) 25 3 CTR 01(SC) HELD THAT A MISTAKE IN THE TAX AUDIT REPORT MUST NOT BE TREATED AS A MISTAKE OF THE ASSESSEE AND IT WAS MERELY HELD AS A COMPUTATIO NAL ERROR, HENCE NOT TO BE TREATED AS FURNISHING OF INACCURATE PARTICULARS BY THE ASSESSEE. MA NO.216/AHD/2012 (IN ITA NO.2595/AHD/2010) PARAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2003-04 - 4 - 3. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.Y.P.VE RMA APPEARED AND VEHEMENTLY OPPOSED SUCH A PETITION WHICH ACCORD ING TO HIM IS NOTHING BUT REVIEW OF A JUDGEMENT. HE HAS PLEADED THAT UNDER THE RELEVANT PROVISIONS, A MISTAKE WHICH IS APPARENT ON RECORD CAN ONLY BE RECTIFIED. NO SUCH MISTAKE HAS BEEN POINTED OUT, T HEREFORE THIS PETITION DESERVES TO BE DISMISSED. 4. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PERU SED THE RELEVANT ORDERS. WE HAVE NOTED THAT THE RESPECTED COORDINAT E BENCH HAS EXAMINED THE FACTS AND CIRCUMSTANCES OF THE CASE AN D AFTER DUE CONSIDERATION HELD AS UNDER: 8. CONSIDERING THE ABOVE DISCUSSIONS IT IS CLEAR THAT MERELY BECAUSE THE ASSESSEE MADE A CLAIM IN PROFIT & LOSS ACCOUNT OF THE DEDUCTION WOULD NOT ABSOLVE THE ASSESSEE FROM LEVY OF PENALTY BECAUSE THE CLAIM OF THE ASSESSEE WAS NOT BONA FIDE AND THAT THE ASSESSEE HAD MADE A FALSE AND WRONG CLAIM OF DEDUCT ION OF THE EXPENDITURE IN THE PROFIT & LOSS ACCOUNT AGAINST SE TTLED LEGAL PROPOSITION. SINCE THE ASSESSEE HAS MADE FALSE AND WRONG CLAIM IN THE RETURN OF INCOME OF DEDUCTION OF THE CAPITAL EX PENDITURE, THEREFORE, THE AUTHORITIES BELOW HAVE RIGHTLY LEVIE D AND CONFIRMED THE PENALTY IN THE MATTER. ACCORDINGLY, THE DECISI ON IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) IS CLEARLY DISTINGUISHABLE FROM THE FACTS OF THE CASE. CONSIDERING THE ABOVE DISCUSSIONS, I DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. THE SAME IS ACCORDINGLY DISMISSED. 5. WHILE PASSING THE DECISION, THE TRIBUNAL WAS CON SCIENTIOUS ABOUT THE FACTS THAT THE ASSESSEE HAD INCREASED ITS SHARE CAPITAL DURING THE YEAR UNDER CONSIDERATION AND PAID THE STAMP DUTY. THE T RIBUNAL WAS ALSO MA NO.216/AHD/2012 (IN ITA NO.2595/AHD/2010) PARAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2003-04 - 5 - AWARE THAT ALTHOUGH THE ASSESSEE WAS CONSCIOUS ABOU T THE NATURE OF THE EXPENDITURE BEING A CAPITAL EXPENDITURE BUT DELIBER ATELY CLAIMED ON REVENUE ACCOUNT. THEREFORE, THE TRIBUNAL HAS HELD THAT IT WAS NOT ONLY A WRONG BUT A FALSE CLAIM OF DEDUCTION OF EXPENDITURE . WHILE CONFIRMING THE PENALTY, CERTAIN OTHER FACTS AS ALSO CASE LAWS HAVE DULY BEEN DISCUSSED BY THE TRIBUNAL. THE SCOPE OF THE PROVISIONS OF SE CTION 254(2) OF THE ACT IS VERY LIMITED. A MISTAKE WHICH IS APPARENT FROM AN ORDER CAN ONLY BE RECTIFIED. SUCH A MISTAKE CAN BE A CALCULATION MIS TAKE OR A GLARING MISTAKE WHICH CAN BE APPRECIATED ON THE FACE OF THE RECORDS ITSELF. IF WE ACCEPT THIS PETITION, THEN THIS MAY TANTAMOUNT TO R EVIEW OF AN ORDER OF THE TRIBUNAL. A POWER OF REVIEW HAS TO BE STATUTO RILY CONFIRMED. IT CANNOT BE INFERRED. POWER OF REVIEW HAS NOT BEEN C ONFIRMED TO THE TRIBUNAL. THEREFORE, WE CANNOT SIT AS A JUDGE ON OUR OWN DECISION OF RESPECTED COORDINATE BENCH. WE THEREFORE HOLD THAT NO APPARENT MISTAKE HAS BEEN POINTED OUT THROUGH THIS PETITION, HENCE D ISMISSED. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS DISMISSED. SD/- SD/- ( &..'# ) ( ' ' ( ) $ )* $ ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 3 / 5 /2013 &.., .*../ T.C. NAIR, SR. PS MA NO.216/AHD/2012 (IN ITA NO.2595/AHD/2010) PARAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2003-04 - 6 - ') * +,- .'-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPLICANT 2. / THE RESPONDENT. 3. , -. / / CONCERNED CIT 4. / () / THE CIT(A)-XI, AHMEDABAD 5. 234 **-., -.#, 5'$,$ / DR, ITAT, AHMEDABAD 6. 467 8 / GUARD FILE. ')% / BY ORDER, 2 * //TRUE COPY// // 0 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION DATED 15.3.13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22.3.13 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S3.5.13 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3.5.13 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER