M/s Anurena Tristar,, New Delhi v. ACIT, New Delhi

ITA 1108/DEL/2010 | 2003-2004
Pronouncement Date: 07-01-2011 | Result: Dismissed

Appeal Details

RSA Number 110820114 RSA 2010
Assessee PAN AAAFA5876A
Bench Delhi
Appeal Number ITA 1108/DEL/2010
Duration Of Justice 9 month(s) 25 day(s)
Appellant M/s Anurena Tristar,, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 07-01-2011
Date Of Final Hearing 27-10-2010
Next Hearing Date 27-10-2010
Assessment Year 2003-2004
Appeal Filed On 12-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A BEFORE HONBLE VICE PRESIDENT SHRI G.E.VEERABHADRAP PA AND SHRI A.D.JAIN JUDICIAL MEMBER ITA NO. 1108/DEL/2010 ASSTT.YEAR: 2003-04 M/S ANURENA TRISTAR VS ASSTT.C.I.T. 303 ANAND KUNJ VIKAS PURI CIR. 25(1) NEW DELH I. NEW DELHI-110018. (PAN: AAAFA5876A) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAJESH MAHANA ADV. RESPONDENT BY: MRS PRATIMA KAUSHIK SR.D.R O R D E R PER VEERABHADRAPPA V.P. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER DATED 20.10.2009 OF THE CIT (APPEALS) NEW DELHI FOR THE ASSESSMENT YEA R 2003-04. 2. THE ONLY DISPUTE IN THIS APPEAL RELATES TO THE L EVY OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT. DURING THE ASSESSM ENT PROCEEDINGS IT WAS DISCOVERED THAT THE ASSESSEE WHICH IS A FIRM HAS I NSTALLED PLANT AND MACHINERY AT NOIDA AND CLAIMED DEPRECIATION AT 40% INCLUDING THEREIN THE ADDITIONAL DEPRECIATION OF 15% IN TERMS OF SECTION 32 OF THE ACT. THE A.O WENT THROUGH THE PURCHASE BILLS OF THE MACHINERY AN D HE FOUND THAT THEY WERE ALL USED COMPONENTS AND NOT NEW MACHINERY. HEN CE THE CLAIM OF ADDITIONAL DEPRECIATION OF 15% WAS DISALLOWED. ACCO RDING TO THE A.O THE CLAIM OF ADDITIONAL DEPRECIATION ON SECOND HAND PLA NT AND MACHINERY WAS ITA NO. 1108/DEL/2010 2 NOT PERMISSIBLE. ALL THE ASSETS HAVE ONCE BEEN USED OUTSIDE INDIA AND THEY WERE RECONDITIONED IN INDIA AFTER PURCHASING THE SA ID USED COMPONENTS FROM ABROAD. 3. THE ADDITION NOW STANDS CONFIRMED IN THE QUANTUM PROCEEDINGS. 4. NOW WITH REFERENCE TO THE IMPUGNED ADDITION THE A.O IMPOSED THE PENALTY FOR CONCEALMENT U/S 271(1)(C) OF THE ACT. T HE CIT (A) WAS OF THE VIEW THAT THE A.O HAS CONCLUSIVELY ESTABLISHED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND THE PENALTY WAS HELD TO BE JUSTIFIED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE WHO APPEARE D VEHEMENTLY RELIED UPON THE DECISION OF THE DELHI HIGH COURT DATED SEP TEMBER 14 2009 IN ITA NO. 256/2009 WHEREIN ACCORDING TO HIM THEIR LORDS HIPS HAVE ADMITTED THE APPEAL ON IDENTICAL ISSUE INVOLVING THE IMPORTING O F CERTAIN COMPONENTS FROM ABROAD. THE VERY FACT THAT THE HIGH COURT HAS ADMITTED THE QUESTION AS DEBATABLE CLEARLY CONFIRMS THAT THE ASSESSEE HAD N OT FURNISHED INACCURATE PARTICULARS. THE ASSESSEE HAS FILED THE COPY OF THE AUDIT REPORT BALANCE SHEET AND COPY OF THE JUDGMENT OF THE HIGH COURT IN THE A SSESSEES OWN CASE AND ON THE BASIS OF THIS IT WAS ARGUED THAT IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OR CONCEALED PARTI CULARS OF INCOME INVITING IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. 6. THE LEARNED D.R ON THE OTHER HAND JUSTIFIED TH E IMPOSITION OF PENALTY. THE ASSESSEE HAS CLEARLY CONCEALED THE PAR TICULARS OF INCOME. SHE DREW OUR ATTENTION TO THE COPIES OF THE BILLS WHICH CLEARLY SHOW THAT THESE WERE ONLY USED MACHINES AND THE ASSESSEE WAS AWARE THAT THESE WERE SECOND ITA NO. 1108/DEL/2010 3 HAND UNITS AND STILL IT CLAIMED ADDITIONAL DEPRECIA TION WITHOUT BOTHERING TO THE CONTRARY PROVISIONS OF THE ACT CONTAINED U/S 3 2(1) OF THE ACT. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS AND GONE THROUGH THE RECORDS. THE SHIPPING DOCUMENTS AND THE PURCHAS E BILLS WHICH ARE ON RECORD CLEARLY SHOW THAT THE ASSESSEE IMPORTED USED MACHINES AND HAS RECONDITIONED THEM SO AS TO MAKE THEM USABLE IN ITS BUSINESS. THE ASSESSEE HAS WRONGLY CLAIMED THE ADDITIONAL DEPRECIATION ON SUCH SECOND HAND MACHINES. THE DISALLOWANCE OF ADDITIONAL DEPRECIATI ON ON THESE ITEMS OF PLANT AND MACHINERY HAVE FINALLY BEEN UPHELD BY THE HIGH COURT VIDE ITS ORDER DATED SEPTEMBER 1 2009 COPY OF WHICH IS ON R ECORD. THE PROVISIONS OF SECTION 32(1)(IIA) WHICH ARE RELEVANT FOR CLAIMING THE ADDITIONAL DEPRECIATION READ AS UNDER: 32(1) IN RESPECT OF DEPRECIATION OF (I) X X X X (II) X X X X (IIA) IN THE CASE OF ANY NEW MACHINERY OR PLANT (OT HER THAN SHIPS AND AIRCRAFT) WHICH HAS BEEN ACQUIRED AND INSTALLED AF TER THE 31 ST DAY OF MARCH 2002 BY AN ASSESSEE ENGAGED IN THE BUSINESS OF MAN UFACTURE OR PRODUCTION OF ANY ARTICLE OR THING A FURTHER SUM EQUAL TO FIF TEEN PER CENT OF THE ACTUAL COST OF SUCH MACHINERY OR PLANT SHALL BE ALLOWED AS DEDUCTION UNDER CLAUSE (II): PROVIDED THAT SUCH FURTHER DEDUCTION OF FIFTEEN PER CENT SHALL BE ALLOWED TO (A) A NEW INDUSTRIAL UNDERTAKING DURING ANY PREVIOU S YEAR IN WHICH SUCH UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ANY AR TICLE OR THING ON OR AFTER THE IST DAY OF APRIL 2002; OR (B) ANY INDUSTRIAL UNDERTAKING EXISTING BEFORE THE IST DAY OF APRIL 2002 DURING ANY PREVIOUS YEAR IN WHICH IT ACHIEVES THE S UBSTANTIAL EXPANSION BY WAY OF INCREASE IN INSTALLED CAPACITY BY NOT LESS THAN TEN PER CENT: ITA NO. 1108/DEL/2010 4 PROVIDED FURTHER THAT NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF (A) ANY MACHINERY OR PLANT WHICH BEFORE ITS INSTAL LATION BY THE ASSESSEE WAS USED EITHER WITHIN OR OUTSIDE INDIA B Y ANY OTHER PERSON; OR (B) ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE PREMISES OR ANY RESIDENTIAL ACCOMMODATION INCLUDING ACCOMMODATION IN THE NATURE OF A GUEST HOUSE; OR (C) ANY OFFICE APPLIANCES OR ROAD TRANSPORT VEHICLE S; OR (D) ANY MACHINERY OR PLANT THE WHOLE OF THE ACTUAL COST OF WHICH IS ALLOWED AS A DEDUCTION (WHETHER BY WAY OF DEPRECIAT ION OR OTHERWISE) IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION OF AN Y ONE PREVIOUS YEAR; PROVIDED ALSO THAT NO DEDUCTION SHALL BE ALLOWED UN DER CLAUSE (A) OR AS THE CASE MAY BE CLAUSE (B) OF THE FIRST PROVISO UNLES S THE ASSESSEE FURNISHES THE DETAILS OF MACHINERY OR PLANT AND INCREASE IN THE I NSTALLED CAPACITY OF PRODUCTION IN SUCH FORM AS MAY BE PRESCRIBED ALONG WITH THE RETURN OF INCOME AND THE REPORT OF AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288 CERTIFYING THA T THE DEDUCTION HAS BEEN CORRECTLY CLAIMED IN ACCORDANCE WITH THE PROVISIONS OF THIS CLAUSE. EXPLANATION FOR THE PURPOSES OF THIS CLAUSE - (1) NEW INDUSTRIAL UNDERTAKING MEANS AN UNDERTAKI NG WHICH IS NOT FORMED - (A) BY THE SPLITTING UP OR THE RECONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE; OR (B) BY THE TRANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE; (2) INSTALLED CAPACITY MEANS THE CAPACITY OF PROD UCTION AS EXISTING ON THE 31 ST DAY OF MARCH 2002. ITA NO. 1108/DEL/2010 5 8. IN THE LIGHT OF THE AFORESAID PROVISION IT CANN OT BE SAID THAT THE CLAIM OF DEDUCTION OF ADDITIONAL DEPRECIATION BY THE ASSE SSEE WAS BONAFIDE. IN OTHER WORDS THE ASSESSEE COULD NOT HAVE CLAIMED BE NEFIT OF ADDITIONAL DEPRECIATION UNDER THE EXPRESS PROVISIONS OF THIS A CT. IN AN IDENTICAL CIRCUMSTANCE DELHI HIGH COURT IN CIT VS. ZOOM COMMUNICATION P.LTD. 327 ITR 510 (DEL) EVEN AFTER CONSIDERING THE DECISION OF THE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS P.LTD. 322 ITR 158 (SC) HAS JUSTIFIED THE IMPOSITION OF PENALTY U/S 271(1)(C). THE ASSESSEES CLAIM FOR ADDITIONAL DEPRECIATION IN RESPECT OF THE USED ITEM S OF PLANT AND MACHINERY IS AN ACT OF CONCEALMENT AND ALSO FURNISHING OF INACCU RATE PARTICULARS AS REGARDS THE INCOME. IN THE LIGHT OF THIS DISCUSSION WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE ASSESSING OFFICER IN IMPOSING THE PENA LTY UPON THE ASSESSEE FOR AN ACT OF CONCEALMENT U/S 271(1)(C) OF THE ACT. WE UPHOLD THE ORDER OF THE CIT (APPEALS) CONFIRMING THE PENALTY. 9. IN THE RESULT THE APPEAL IS DISMISSED. PRONOUNCED IN OPEN COURT ON 07.01.2011. SD/- SD/- (A.D.JAIN) (G.E.VEERABHADRAPPA) JUDICIAL MEMBER VICE PRESIDENT DATED: JANUARY 07 2011. DRS COPY OF THE ORDER FORWARDED TO: 1. M/S ANURENA TRISTAR 303 ANAND KUNJ VIKAS PURI NEW DELHI-110018. 2. ASSTT.CIT CIR. 25(1) NEW DELHI. 3. CIT 4. CIT(A)-XXIV NEW DELHI. 5. DR ASSTT. REGISTRAR ITAT