Royale Manor Hotels & Ind.Ltd.,, Ahmedabad v. The Income tax Officer,Ward-5(3),, Ahmedabad

CO 47/AHD/2009 | 2003-2004
Pronouncement Date: 10-12-2010 | Result: Dismissed

Appeal Details

RSA Number 4720523 RSA 2009
Assessee PAN AABCR5304B
Bench Ahmedabad
Appeal Number CO 47/AHD/2009
Duration Of Justice 1 year(s) 8 month(s) 24 day(s)
Appellant Royale Manor Hotels & Ind.Ltd.,, Ahmedabad
Respondent The Income tax Officer,Ward-5(3),, Ahmedabad
Appeal Type Cross Objection
Pronouncement Date 10-12-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 10-12-2010
Date Of Final Hearing 19-10-2011
Next Hearing Date 19-10-2011
Assessment Year 2003-2004
Appeal Filed On 16-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HON' BLE SHRI A.N. PAHUJA A.M. ) I.T.A. NO. 424/AHD./2009 ASSESSMENT YEAR : 2003-2004 INCOME TAX OFFICER WARD-5(3) AHMEDABAD -VS.- R OYALE MANOR HOTELS & IND. LTD. AHMEDABAD(PAN : AABCR 5304 B) (APPELLANT) (RESP ONDENT) & C.O. NO. 47/AHD/2009 (ARISING OUT OF ITA NO. 424/AHD/2009) ASSESSMENT YEAR : 2003-2004 ROYALE MANOR HOTELS & IND. LTD. -VS.- INCO ME TAX OFFICER WARD-5(3) AHMEDABAD AHMEDABAD (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI VIJAY RANJAN DEPARTMENT BY : SHRI K. MADHUSUDAN SR. D.R. O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTI ON BY THE ASSESSEE ARE AGAINST THE ORDER DATED 03.10.2008 OF LEARNED COMMISSIONER OF I NCOME TAX (APPEALS)-I AHMEDABAD FOR THE ASSESSMENT YEAR 2003-04. 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APP EAL IS AS UNDER :- THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY I MPOSED VIDE ORDER U/S. 271(1)(C) OF THE I.T. ACT OF RS.11 73 470/-. 3. THE GROUNDS OF CROSS OBJECTION RAISED BY THE ASS ESSEE ARE AS UNDER :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A.) SHOULD HAVE HELD THAT EVEN IF MENS REA IS NOT REQUIRED TO BE PROVED BY THE DEPARTMENT IT WAS NOT A FIT CASE FOR LEVY OF PENAL TY U/S. 271(1)(C). (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A.) SHOULD HAVE REALIZED THAT IT WAS NOT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS REAL OR DEEM ED- AND FOR THIS REASON ALSO PENALTY WAS NOT LEVIABLE U/S. 271(1)(C) . 2 ITA NO. 424-AHD-2009 & CO-47-AHD-2009 4. BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN THE GROUND OF REVENUES APPEAL ARE THAT FOR THE ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE-COMP ANY FILED THE RETURN OF INCOME DECLARING LOSS/ DEFICIENCY OF RS.4 48 42 862/- THEREIN DEPRE CIATION ON ELECTRICAL INSTALLATION WAS CLAIMED AT RS.73 40 441/- AS ELECTRICAL INSTALLATIONS WERE INC LUDED IN THE BLOCK OF ASSETS OF PLANT & MACHINERY WHICH ARE ENTITLED TO DEPRECIATION @ 25% . IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HELD THAT W.D.V. OF ELECTRICAL INSTALLATION WAS RS.2 98 29 841/- AND WAS ENTITLED TO DEPRECIATION @ 15% FOR AND FROM THIS ASSESSMENT YEA R VIZ. 2003-04. THE ASSESSING OFFICER THEREFORE DISALLOWED THE EXCESS OF 10% OF THE AFOR ESAID VALUE OF WDV ATTRIBUTABLE TO THE ELECTRICAL INSTALLATIONS. ON THAT BASIS THE DISALL OWANCE COMES TO RS.29 82 984/-. IN THIS MANNER THE TOTAL INCOME FOR THE ASSESSMENT YEAR UNDER APPE AL WAS DETERMINED AT RS.1 02 53 437/- WHICH WAS WHOLLY SET OFF AGAINST THE MUCH BIGGER SUM OF B ROUGHT FORWARD LOSS OF RS.250.88 LAKHS. 5. AGAINST THE ORIGINAL ASSESSMENT ORDER DATED 31.0 3.2006 THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED SUBSTANTIAL RELIEF VID E ORDER DATED 07.02.2007. THE RELEVANT PORTION OF THE ORDER DATED 07.02.2007 OF LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) WHEREIN HE ALLOWED SUBSTANTIAL RELIEF IN RESPECT OF DISALLOWANCE MADE IN ORIGINAL ASSESSMENT ORDER OUT OF DEPRECIATION ALLOWANCE ON ELECTRIC INS TALLATION IS CONTAINED IN PARAS 8 9 & 10 STARTING FROM THE BOTTOM OF PAGE 3 OF THAT APPELLAT E ORDER DATED 07.02.2007 WHICH IS RE-PRODUCED HEREUNDER :- 8. THE A.O. NOTED THAT DEPRECIATION ON ELECTRIC IN STALLATIONS HAD BEEN CLAIMED @ 25% I.E. OF RS.73 40 441/- WHEREAS THE A LLOWABLE RATE OF DEPRECIATION ON ELECTRIC INSTALLATION IN AY 2003-04 IS ONLY 15%. HE THEREFORE DISALLOWED THE EXCESS DEPRECIATION OF RS.29 82 984/-. 9. BEFORE ME IT WAS SUBMITTED THAT THE APPELLANT W AS ENGAGED IN HOTEL BUSINESS AND THE ELECTRIC INSTALLATIONS THEREIN CON STITUTED PLANT AND FELL IN THE CATEGORY OF PLANT AND MACHINERY ON WHICH DEPRECIA TION AS CLAIMED WAS ALLOWABLE. THE DECISIONS OF HON'BLE SUPREME COURT I N THE CASE OF TAJ MAHAL HOTEL 82 ITR 44 BARAT RADIATORS 239 ITR 608 AND THE DECISION OF MADRAS HIGH COURT IN THE CASE OF GEETA HOTELS 254 ITR 649 WAS CITED. IT WAS POINTED OUT THAT THE SAME ISSUE HAD ARISEN IN CASE OF SISTER CONCERN NAMELY MARWAR HOTELS IN AY 2002-03 AND THE ITAT D BENCH AHMEDABAD IN ITA N O. 881/AHD/2006 VIDE ORDER DTD. 20.10.2006 HAD HELD THAT DECISION IN CAS E OF M/S. GEETA HOTELS WAS 3 ITA NO. 424-AHD-2009 & CO-47-AHD-2009 APPLICABLE AND THAT ELECTRICAL FITTINGS AND INSTALL ATIONS IN THE HOTEL WERE IN THE CATEGORY OF A PLANT. IT IS POINTED OUT THAT THE FAC TS AND CIRCUMSTANCES IN THE CASE OF THE APPELLANT ARE THE SAME AND THE RATIOS OF THE AFOREMENTIONED DECISIONS ARE APPLICABLE. 10. THE CONDITIONS AND DECISION CITED WERE PERUSED AND CONSIDERED WITH REFERENCE TO THE FACTS AND CIRCUMSTANCES OF THE APP ELLANT. IT IS SEEN THAT THE RATIO OF THE DECISION OF THE SUPREME COURT IN THE CASE OF TAJ MAHAL HOTELS AND IN THE CASE OF GEETA HOTELS PVT. LTD. IS APPLICABLE AND AC CEPTABLE. IT IS SEEN THAT THE APPELLANT HAD SUBMITTED A REVISED CHART DURING ASSE SSMENT PROCEEDINGS VIDE LETTER DTD. 8.3.2006 CONTAINING THE BREAK-UP OF THE WDV OF THE BLOCK OF PLANT AND MACHINERY AND ELECTRICAL FITTINGS INCLUDED IN IT. I T IS SEEN THAT THE DISALLOWANCE REQUIRES TO BE RESTRICTED TO THE BLOCK OF ELECTRICA L FITTINGS OF RS.4 72 724/- AS GIVEN IN THIS REVISED CHART AND THEREFORE THE DISA LLOWANCE IS RESTRICTED TO RS.47 272/- AND THE BALANCE OF DISALLOWANCE OF RS.2 9 35 712/- IS THEREFORE DELETED. THE GROUND OF APPEAL IS ALLOWED ACCORDINGL Y. THUS THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) REDUCED THE DISALLOWANCE IN RESPECT OF DEPRECIATION OF ELECTRIC INSTALLATIONS FROM RS.29 8 2 984/- TO RS.47 272/- THEREBY ALLOWING RELIEF TO THE EXTENT OF RS.29 35 712/- OF THE ORIGINAL DISALL OWANCE. 5.1. AFTER PASSING THE ORIGINAL ASSESSMENT ORDER UN DER SECTION 143(3) ON 31.03.2006 ON 24.11.2006 THE ASSESSING OFFICER PASSED AN ORDER UN DER SECTION 154 DISALLOWING EXCESS DEPRECIATION OF RS.31 45 850/- ON HOTEL BUILDING. T HE REASONING GIVEN BY THE ASSESSING OFFICER FOR MAKING THIS DISALLOWANCE UNDER SECTION 154 ON 2 4.11.2006 IS THAT THE ASSESSEE CLAIMED DEPRECIATION @ 20% ON HOTEL BUILDING. THE OPENING W .D.V. OF THE HOTEL BUILDING WAS RS.3 20 23 262/-. AFTER CONSIDERING THE SALE OF RS. 5 64 762/- THE WDV WORKS OUT TO RS.3 14 58 500/- ON WHICH THE ASSESSEE CLAIMED DEPR ECIATION OF RS.62 91 700/- AS AGAINST ADMISSIBLE DEPRECIATION OF RS.31 45 850/-. IN THIS ORDER UNDER SECTION 154 THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 27 1(1)(C) OF THE ACT. 6. ON RECEIPT OF THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN QUANTUM APPEAL THE ASSESSING OFFICER LEVIED THE PENALTY OF RS.11 73 470/- UNDER SECTION 271(1)(C) BEING 100% OF THE TAX SOUGHT TO THE EVADED AS UNDER :- 4 ITA NO. 424-AHD-2009 & CO-47-AHD-2009 SR. NO. PARTICULARS AMOUNT 1. DISALLOWANCE OF DEPRECIATION ON ELECTRICAL INSTALLATION 47 772/- 2. DISALLOWANCE OF DEPRECIATION ON HOTEL BUILDING U/S. 154 DATED 24.11.2006 31 45 850/- TOTAL DISALLOWANCE 31 93 322/- PENALTY LEVIED U/S. 271(1)(C) 11 73 470/- 7. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS) WITH REGARD TO PENALTY LEVIED ON DISALLOWANCE OF DEPRECIATION ON ELECTRICAL INSTA LLATIONS FOR RS.47 272/- THE ASSESSEE PLEADED THAT THE TAX AUDITORS IN FORM NO. 3CD HAS COMPUTED DEPRECIATION @ 25% ON ENTIRE BLOCK OF PLANT AND MACHINERY AND ELECTRIC INSTALLATION. ON T HIS BASIS IN THE RETURN OF INCOME THE ASSESSEE CLAIMED SUCH DEPRECIATION. IT WAS ALSO PLEADED THAT SUCH DETAILS WERE ON RECORD OF THE DEPARTMENT PRIOR TO SCRUTINY NOTICE ISSUED UNDER SE CTION 143(2) OF THE ACT THEREFORE NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE. 8. WITH REGARD TO SECOND DISALLOWANCE OF RS.31 45 8 60/- IT WAS CONTENDED THAT ON HOTEL BUILDING THE ASSESSEE CLAIMED DEPRECIATION @ 20% AS AGAINST 10%. THE ASSESSING OFFICER RECTIFIED IT UNDER SECTION 154 OF THE ACT. SUBSEQUE NTLY MUCH AFTER THE PASSING OF THE ORIGINAL ASSESSMENT ORDER UNDER SECTION 143(3) ON 31.03.2006 AND INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C). WITH REGARD TO THIS ADDITION BE FORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IT WAS PLEADED THAT WITH THE CHANGE OF TH E ACT THE DEPRECIATION ON HOTEL BUILDING WAS REDUCED FROM 20% TO 10% W.E.F. 2003-04. THE ASSESSE E INADVERTENTLY CLAIMED THE DEPRECIATION @ 20% WHICH THE ASSESSING OFFICER ACCEPTED AS SUCH IN HIS ASSESSMENT ORDER UNDER SECTION 143(3) ON 31.03.2006. SUBSEQUENTLY WHEN THE ASSESS EE DETECTED THIS MISTAKE IT SUO MOTU OFFERED FOR WITHDRAWAL OF EXCESS DEPRECIATION VIDE ITS LETTER DATED 13.07.2006. TAKING NOTE OF THE SAME THE ASSESSING OFFICER PASSED THE ORDER UNDER SECTION 154 ON 24.11.2006 AND CORRECTED THE MISTAKE. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IT WAS ALSO PLEADED THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO FURNISH INACCURATE PARTICULARS OF DETAILS AND SINCE THE ASSESSEE SUO MOTU OFFERED TO RECTIFY THE AMOUNT WRONGLY CLAIMED NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE. FOR THIS RELIANCE W AS PLACED ON THE FOLLOWING DECISIONS :- (I) CIT VS.- BEST SUPPLY AGENCY [241 ITR 208 (MA D.)]; 5 ITA NO. 424-AHD-2009 & CO-47-AHD-2009 (II) CIT VS.- SANKARAN [(2000) 241 ITR 825 (MAD. )]; (III) RAMSARAN GUPTA VS.- CIT [58 TTJ (JP.) 702] . 9. AFTER CONSIDERING THE AFORESAID SUBMISSIONS IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN PARA 5.3.3 & 5.3.4. HELD THAT NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE IN RESPECT OF DISALLOWANCE OF DEPRECIATION ON ELECTRIC INSTALLATIONS AMOUNTING TO RS.47 472/-. THE SAID PARA IS RE-PRODU CED HEREUNDER :- 5.3.3. I HAVE CAREFULLY CONSIDERED THE SUBMIS SION OF THE APPELLANT. IT IS AN ESTABLISHED LAW THAT AN ASSESSEE IS BOUND BY WHAT H IS REPRESENTATIVE ACTS ON HIS BEHALF AS HAS ALREADY BEEN ADJUDICATED IN THE CASE OF SREE VALLIAPPA TEXTILES (2007) 294 ITR 322 AS RELIED UPON BY THE A.O. THE APPELLANTS PLEADING DOES NOT PRESENT THE JUDGMENT CORRECTLY WHICH CLEARLY LAYS DOWN : ANY OMISSION AND COMMISSION ON THE PART OF THE COU NSEL/ AGENT IS CERTAINLY BINDING ON THE ASSESSEE.ONLY DEFENCE OF THE ASSES SEE IS THAT IT IS AT THE MISTAKE OF HIS REPRESENTATIVE.IT CANNOT BE FORGOT TEN THAT THE ASSESSEE IS BOUND BY WHAT HIS REPRESENTATIVE ACTS ON HIS BEHALF IN TH E MATTER. IN VIEW OF THIS THE APPELLANT CANNOT ABSOLVE HIMSE LF FROM HIS RESPONSIBILITY FOR HIS ACTS OF OMISSION AND COMMISSION ON THE PLEA THAT HE HAS BEEN GUIDED BY HIS REPRESENTATIVE. 5.3.4. NONETHELESS A PERUSAL OF THE JUDGMENT OF THE JURISDICTIONAL GUJARAT HIGH COURT IN THE CASE OF CIT VS.- HOTEL SABAR PVT . LTD. 261 ITR 381 AS RELIED UPON BY THE APPELLANT SHOWS THAT IT IS APPLICABLE I N THE CASE OF THE APPELLANT. IN THIS CASE THE ASSESSEE CLAIMED EXCESS DEPRECIATION ON THE BUILDING ON THE VALUE ARRIVED AT IN THE VALUER'S REPORT SHOWING THE VALU E OF LAND AND SUPERSTRUCTURE AND ALSO ON MOVABLES GIVING PARTICULARS OF THE ITEM THEIR ORIGINAL PRICE WDV AND THE PRICE AT WHICH THE SAME WERE TAKEN OVER. TH E HON'BLE HIGH COURT ADJUDICATED THAT IT CANNOT BE SAID THAT THERE WAS A NY CONCEALMENT OF MATERIAL PARTICULARS AND THEREFORE PENALTY U/S. 271(1)(C) C OULD NOT BE LEVIED. IN THE CASE OF THE APPELLANT INITIALLY THE TAX AUDIT REPORT UNDE R FORM 3CD COMPUTED DEPRECIATION @ 25% ON ENTIRE BLOCK OF PLANT AND MAC HINERY AND ELECTRICAL INSTALLATION. HOWEVER SUBSEQUENTLY VIDE LETTER DA TED 8/3/06 THE APPELLANT FILED A REVISED CHART DURING ASSESSMENT PROCEEDINGS CONTAI NING THE BREAK UP OF THE W.D.V. OF THE BLOCK OF PLANT AND MACHINERY FOR WHIC H 25% DEPRECIATION WAS ALLOWABLE AND ELECTRIC FITTINGS FOR WHICH 15% DEPR ECIATION IS TO BE CONSIDERED. SINCE THE ASSESSMENT ORDER IN THE CASE WAS PASSED O N 31/3/06 ALL THE MATERIAL WAS BEFORE THE A.O. TO CONSIDER IT IN PROPER PERSPE CTIVE AND HENCE FOLLOWING THE RATIO OF THE CASE REFERRED TO SUPRA IT CAN BE TAKE N THAT THE APPELLANT CONCEALED THE FACTS AND THEREFORE PENALTY U/S. 271(1)(C) DOES N OT BECOME LEVIABLE IN ITS CASE. 6 ITA NO. 424-AHD-2009 & CO-47-AHD-2009 10. WITH REGARD TO SECOND DISALLOWANCE OF RS.31 45 860/- I.E. EXCESS DEPRECIATION ON HOTEL BUILDING THE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS) IN PARA 5.5.2 HELD THAT IT CANNOT BE SAID THAT THE ASSESSEE HAS CONSCIOUSLY MADE EFFORTS FOR CONCEALING HIS INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE DETAILS ABOUT THE DEPRECIATION ON ELECTRICAL INSTALLATIONS AS MACHINERY OR AS ELECTRICAL FITTINGS WERE VERY MUCH BEFORE THE ASSESSING OFFICER WHILE HE PASSED THE ASSESSMENT ORDER. SIMILARLY WRONG CLAIM AND AL LOWANCE OF DEPRECIATION ON HOTEL BUILDING WAS SUO MOTU BROUGHT TO THE NOTICE OF THE DEPARTMEN T BY THE ASSESSEE ASKING THEREBY FOR A RECTIFICATION OF THE MISTAKE INADVERTENTLY COMMITTE D. UNDER THESE CIRCUMSTANCES NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE. 11. AGGRIEVED WITH THE ORDER OF LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 12. AT THE TIME OF HEARING BEFORE US ON BEHALF OF REVENUE SHRI K. MADHUSUDAN LD. SR. D.R. APPEARED AND CONTENDED THAT THERE IS A DEEMED CONCE ALMENT IN ACCORDANCE WITH EXPLANATION 1 TO SECTION 271(1)(C) AND EXPLANATION FURNISHED BY THE ASSESSEE IS NOT BONAFIDE THEREFORE PENALTY UNDER SECTION 271(1)(C) WAS RIGHTLY LEVIED BY THE A SSESSING OFFICER AND THEREFORE THE SAME BE RECTIFIED. 13. ON THE OTHER HAND SHRI VIJAY RANJAN LD. COUNS EL APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). HE SUBMITTED THAT AFTER CONSIDERING THE FACT THE ASSES SEE-COMPANY ITSELF FILED A REVISED CHART DURING THE COURSE OF ASSESSMENT PROCEEDINGS CONTAINING THE BREAK-UP OF WDV OF THE BLOCK OF PLANT AND MACHINERY FOR WHICH 25% DEPRECIATION WAS ALLOWABLE AND ELECTRICAL FITTINGS FOR WHICH 15% DEPRECIATION IS TO BE CONSIDERED PENALTY UNDER SEC TION 271(1)(C) IS NOT LEVIABLE ON DISALLOWANCE OF DEPRECIATION TO THE EXTENT OF RS.47 472/-. IN RE SPECT OF DISALLOWANCE OF DEPRECIATION ON HOTEL BUILDING AMOUNTING TO RS.31 45 860/- THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) AFTER APPRECIATING THE FACT THAT THE ASSESSEE HIMSELF POI NTED OUT THE MISTAKE PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE. HE ACCORDINGLY PLEADED T HAT EXPLANATION FURNISHED BY THE ASSESSEE WAS BONAFIDE WHICH HAS BEEN ACCEPTED BY THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS) IN THE 7 ITA NO. 424-AHD-2009 & CO-47-AHD-2009 IMPUGNED ORDER THEREFORE THE VIEW TAKEN BY THE LE ARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 14. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS.- RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN 322 ITR 158 (SC) HELD THAT MAKING INCOR RECT CLAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME. THE HEAD-NOTES OF THE S AID JUDGMENT READS AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PEN ALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOC UMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE THE LIABILITY WOULD ARISE. TO ATTRACT P ENALTY THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MER E MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS . 15. IN THE RETURN OF INCOME THE ASSESSEE CLAIMED E XCESS DEPRECIATION TO THE EXTENT OF RS.47 472/- BECAUSE AUDITORS OF THE ASSESSEE-COMPAN Y IN FORM NO. 3CD COMPUTED DEPRECIATION @ 25% ON THE ENTIRE BLOCK OF PLANT AND MACHINERY AN D ELECTRICAL INSTALLATIONS. IN OUR OPINION THIS WAS ON ACCOUNT OF BONAFIDE MISTAKE FOR WHICH P ENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE IN RESPECT OF DISALLOWANCE OF RS.31 45 860/- ON ACC OUNT OF DEPRECIATION ON HOTEL BUILDING IT IS PERTINENT TO NOTE THAT DUE TO CHANGE OF THE ACT TH E DEPRECIATION ON HOTEL BUILDING WAS REDUCED FROM 20% TO 10% WITH EFFECT FROM 2003-04. THE ASSES SEE-COMPANY INADVERTENTLY CLAIMED THE DEPRECIATION @ 20% WHICH THE ASSESSING OFFICER ACCE PTED AS SUCH IN THE ASSESSMENT ORDER UNDER 8 ITA NO. 424-AHD-2009 & CO-47-AHD-2009 SECTION 143(3) ON 31.03.2006. THE SAID ORDER WAS RE CTIFIED UNDER SECTION 154 OF THE ACT. THIS CLEARLY INDICATES THAT FURTHER DISALLOWANCE OF DEPR ECIATION ON HOTEL BUILDING AMOUNTING TO RS.31 45 860/- WAS MADE AT THE INSTANCE OF THE ASSE SSEE. 15.1. LOOKING TO THE CONDUCT OF THE ASSESSEE WE AR E OF THE VIEW THAT PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF DISALLOWANCE OF DEPRECIATIO N IS NOT LEVIABLE KEEPING IN VIEW THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANC E PETRO PRODUCTS PVT. LTD. (SUPRA). TO SUM UP WE ARE OF THE VIEW THAT THE LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) HAS GIVEN COGENT REASON FOR CANCELLING THE PENALTY OF RS.11 73 470/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. WE INCLINE TO UPHOLD THE ORDE R OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). RESULTANTLY THE APPEAL FILED BY THE REV ENUE IS DISMISSED. 16. THE GROUNDS OF CROSS OBJECTION FILED BY THE ASS ESSEE WERE NOT PRESSED BY THE LD. COUNSEL OF THE ASSESSEE AT THE TIME OF HEARING. THEREFORE BOTH THE GROUNDS OF CROSS OBJECTION ARE DISMISSED BEING NOT PRESSED. 17. IN THE RESULT THE APPEAL FILED BY THE DEPARTME NT AS WELL AS THE CROSS OBJECTION BY THE ASSESSEE BOTH ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 10.12.20 10 SD/- SD/- (A.N. PAHUJA) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10 / 12 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A.) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR ITAT AHMEDABAD LAHA/SR.P.S.