The ACIT, Baroda Circle-4(2),, Baroda v. Transpek Finance Ltd., Baroda

ITA 2005/AHD/2007 | 1996-1997
Pronouncement Date: 30-04-2010 | Result: Dismissed

Appeal Details

RSA Number 200520514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 2005/AHD/2007
Duration Of Justice 2 year(s) 11 month(s) 19 day(s)
Appellant The ACIT, Baroda Circle-4(2),, Baroda
Respondent Transpek Finance Ltd., Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 30-04-2010
Date Of Final Hearing 22-04-2010
Next Hearing Date 22-04-2010
Assessment Year 1996-1997
Appeal Filed On 11-05-2007
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI MUKUL SHRAWAT JM AND D.C.AGRAWAL AM ASSTT. CIT BARODA CIR.4(2) BARODA. V/S . M/S TRANSPEK FINANCE LTD. 1 ST FLOOR ABS TOWER OLD PADRA ROAD BARODA. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M. C. PANDIT SR.D.R. RESPONDENT BY:- SHRI J.P. SHAH AR O R D E R PER D.C. AGRAWAL ACCOUNTANT MEMBER. THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE REDUCTION IN QUANTUM OF PENALTY LEVIED UNDER SECTION 271(1)(C) B Y RAISING FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CON FIRMING PENALTY U/S 271(1)(C) @ 100% ON RS.5 10 968/- DESPI TE THE FACT THAT THE ASSESSEE HAD CLAIMED DEPRECIATION @ 100% I .E. RS.40 87 744/- IN THE RETURN OF INCOME OUT OF WHIC H THE CLAIM OF RS.5 10 968/- WAS FINALLY ALLOWED AND BALANCE AM OUNT OF RS.35 76 776/- WAS DISALLOWED AND BROUGHT TO TAX IN ASSESSMENT. THUS THE PENALTY SHOULD HAVE BEEN LEVIE D ON THE AMOUNT OF RS.35 76 776/- INSTEAD OF RS.5 70 968/- A S PER EXPLANATION 4 OF SECTION 271(1)(C) OF THE IT ACT 1 961. ITA NO.2005/AHD/2007 ALONG WITH C.O. NO.207/AHD/2008 ASST. YEAR :1996-97 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE TO THE ABOVE EXTENT AND THAT OF THE AO BE RES TORED. 2. THE ASSESSEE HAS FILED THE CROSS OBJECTION AGAIN ST THE SUSTAINED PART OF PENALTY BY RAISING FOLLOWING GROUNDS :- 1. THE CIT(A) ERRED IN UPHOLDING THE PENALTY OF RS.2 3 5 045/- U/S 271(1)(C) OF THE IT ACT 1961. 2. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THERE WAS NO CONCEALMENT OR FILING OF INACCURATE PARTICULARS BY THE ASSESSEE AND HENCE NO PENALTY U/S 271(1)(C) OUGHT TO HAVE B EEN SUSTAINED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY LISTED ON THE BARODA AND MUMBAI STOCK EXCHA NGES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO NOTICED THAT TH E ASSESSEE COMPANY HAS CLAIMED 100% DEPRECIATION ON MICRO PROCESSOR BA SED INTEGRATED RECEIVER DECODER BOXES (IN SHORT DECODER BOXES) WHI CH WERE CLAIMED TO HAVE BEEN PURCHASED AND PUT TO USE ON 30.9.1995. TH ESE UNITS WERE PURCHASED FROM A CONCERN BASED AT BANGALORE. HE FOU ND THAT THESE UNITS COULD NOT REACH FROM BANGALORE TO NOIDA BY 30.9.199 5. HE HELD THAT IT IS DIFFICULT TO BELIEVE THAT SUCH UNITS COULD BE LOADE D ON THE TRUCKS TRANSPORTED BY ROADS UNLOADED AT NOIDA AND ALSO PU T TO USE BEFORE 30.9.1995. THEREFORE THE AO RESTRICTED THE DEPRECI ATION TO 50% ON THE GROUND THAT ASSETS WERE USED FOR LESS THAN 180 DAYS . 4. IN ADDITION TO THIS THE AO FURTHER HELD THAT EQ UIPMENTS IN QUESTION WERE NOT ELIGIBLE TO BE CONSIDERED AS ENERGY SAVIN G DEVICES BUT WOULD ONLY FALL IN THE CATEGORY OF PLANT AND MACHINERY. ACCORDINGLY HE DENIED 3 THE CLAIM OF 100% DEPRECIATION AT THE HIGHER RATE B UT ALLOWED DEPRECIATION @ 25% AVAILABLE ON PLANT AND MACHINER Y. THUS AS A RESULT OF TWO DISALLOWANCES THE CLAIM OF DEPRECIATION WAS RESTRICTED TO 12.5% AS AGAINST 100% CLAIMED BY THE ASSESSEE. IN TERMS OF M ONEY CLAIM FOR DEPRECIATION WAS FOR RS.49 50 400/- WHICH WAS RESTR ICTED TO RS.5 10 968/- THE ISSUE TRAVELED TO THE TRIBUNAL WHICH VIDE ITS O RDER DATED 10.3.2006 IN ITA NO.606/AHD/2000 DISMISSED ASSESSEES APPEAL AND UPHELD THE DISALLOWANCE OF DEPRECIATION MADE BY THE AO. 5. THE AO THEREAFTER ISSUED PENALTY NOTICE UNDER SE CTION 271(1)(C). IN RESPONSE TO SHOW CAUSE NOTICE ISSUED BY THE AO THE ASSESSEE FURNISHED FOLLOWING EXPLANATIONS :- (I) THE ASSESSEE HAD CLAIMED 100% DEPRECIATION ON MICRO PROCESSOR BASED INTEGRATED RECEIVER DECORDERS BOXES UNITS BAS ED ON A GENUINE AND TRUE BELIEF THAT THE SAME WOULD BE AVAILABLE AS PER OPINION FROM AN EXPERT M/S VAISH ASSOCIATES ADVOCATES NEW DELHI. (II) THE MICRO PROCESSOR BASED INTEGRATED RECEIVER DECODERS BOXES UNITS WERE DISCLOSED IN THE RETURN OF INCOME AND THE PROCEEDIN GS UNDER THE ACT. HENCE NO CONSCIOUS AND DELIBERATE CONCEALMENT CAN B E IMPEACHED WHEN DEPRECIATION CLAIM WAS BONA FIDE AND WITH OUT ANY M ALA FIDE INTENTION. (III) THE ASSESSEE HAS NOT FILED FURTHER REFERENCE TO THE HIGH COURT BECAUSE THE SAME WOULD NOT HAVE BEEN COST EFFECTIVE .(IV) THE ISSUE INVOLVED REGARDING THE CLAIM OF DEPRECIATION BEING AN ISSUE RELATED TO INTERPRETATION OF LAW DOES NOT FALL WITHIN AMBIT OF CONCEALMENT OR FURNISHING OF INACCURATE INFORMATION.(V) PENALTY PR OCEEDINGS BEING QUASI CRIMINAL NATURE THE FACTS NECESSARY TO ATTRACT THE PROVISIONS SHOULD BE PROVED BEYOND DOUBT. THE AO HOWEVER WAS NOT CONVINCED WITH THE EXPLANA TIONS. ACCORDING TO THE AO ASSESSEE INTENTIONALLY TRIED TO AVAIL BEN EFIT OF 100% DEPRECIATION ON THE UNITS WHICH WERE NOT PRIMA FACI E FALLING UNDER THE ITEMS III(3)(III)(B) OF DEPRECIATION TABLE I.E. AS AN INSTRUMENTATION AND MONITORING SYSTEM FOR MONITORING ENERGY FLOW. (II) BOTH THE CIT(A) AND 4 THE TRIBUNAL HAVE NOT APPROVED THE FALSE CLAIM 100% DEPRECIATION ON THE MICRO PROCESSOR BASED INTEGRATED RECEIVER DECODER B OXES UNITS WHICH ARE ONLY USED IN TRANSMISSION OF AUDIO/VIDEO SIGNAL S IN TV CHANNELS WIDELY USED BY PUBLIC TO WATCH VARIOUS TV CHANNELS. ACCORDING TO THE AO THE ASSETS WERE PURCHASED IN MARCH 1996 AND NOT IN THE MONTH OF SEPTEMBER 1995 AS CLAIMED BY THE ASSESSEE COMPANY. (III) THE CLAIM MADE ON THE BASIS OF OPINION OF ADVOCATE IS NOT ACC EPTABLE AS IT IS CONTRARY TO INCOME-TAX PROVISIONS. (IV) EXPLANATION -1 TO SECTION 271(1)(C) SHIFTS THE BURDEN ON THE ASSESSEE TO PROVE THE ABSE NCE OF MENS REA. (V) IT IS NOTHING BUT A TAX EVASION PLANNING. (VI) THE ASS ESSEE FAILED TO SUBSTANTIATE THE EXPLANATION AND FAILED TO PROVE TH AT EXPLANATION IS BONA FIDE. HE ACCORDINGLY LEVIED MAXIMUM PENALTY OF RS.4 9 35 948/-. WHEN THE MATTER WENT TO THE LD. CIT(A) HE HELD THAT IMPO SITION OF PENALTY ON MAXIMUM RATE IS NOT WARRANTED AS THE FACTS OF THE C ASE DO NOT JUSTIFY THE CONDUCT OF THE ASSESSEE EITHER AS CONTUMACIOUS DIS HONEST OR IN WILLFUL DISREGARD OF THE LAW. SECONDLY HE HELD THAT THERE IS NO CONCEALMENT OF ANY PRIMARY FACT WHICH COULD LEAD TO THE CONCLUSION THAT THE MACHINERY IN QUESTION WAS NOT AN ENERGY SAVING DEVICE AS ASSES SEE HAD REASONABLE GROUND ON THE BASIS OF LEGAL OPINION THAT IT COULD GET DEPRECIATION @ 100%. AS THE AO HELD A DIFFERENT VIEW IN RESPECT OF CLASSIFICATION OF ASSETS IT IS NOT SUFFICIENT TO IMPOSE PENALTY ON T HE ASSESSEE. 6. IN RESPECT OF SECOND ISSUE AS THE WHETHER ASSETS WERE USED FOR 180 DAYS OR LESS THE LD. CIT(A) NOTICED THAT ISSUE BEI NG A QUESTION OF FACT WAS DECIDED AGAINST THE ASSESSEE BY THE LD. CIT(A) AND THE SAME WAS NOT CONTESTED BEFORE THE TRIBUNAL. SINCE EQUIPMENTS WER E USED FOR LESS THAN 180 DAYS IT COULD BE SAID THAT ASSESSEE HAS LODGED AN INCORRECT CLAIM FOR DEPRECIATION AND THIS WOULD AMOUNT TO FURNISHING IN ACCURATE PARTICULARS OF INCOME. THUS LD. CIT(A) ALLOWED THE RELIEF TO THE A SSESSEE ON TWO COUNTS 5 (I) HE REDUCED THE PENALTY FROM 300% TO 100% AND SE CONDLY (II) ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT IN HIS VIEW AS SESSEE HAD PURCHASED ENERGY SAVING DEVICES WHICH ARE ENTITLED FOR 100 % DEPRECIATION. HE ACCORDINGLY CONFIRMED THE PENALTY AT RS.2 35 045/- BEING THE 100% OF THE TAX SOUGHT TO BE EVADED. 7. BEFORE US LD. DR SUBMITTED THAT BY NOT FURNISHIN G FULL AND CORRECT PARTICULARS IN RESPECT OF THE DEVICE AND ON THE BAS IS OF INCOMPLETE AND INCORRECT PARTICULARS THE CLAIM OF DEPRECIATION AT 100% IS INCORRECT AND PENALTY IS LEVIABLE UNDER THE MAIN SECTION. BY NO C OUNT IT COULD BE SAID THAT DEVICES PURCHASED BY THE ASSESSEE WERE ENERGY SAVING DEVICES AND THAT IT SATISFIED ALL THE CONDITIONS LAID DOWN FOR CLAIMING 100% DEPRECIATION. THE LD. DR SUBMITTED THAT FOR CLAIMIN G 100% DEPRECIATION ONE OF THE TWO CONDITIONS LAID DOWN UNDER ITEM III( 3)(III)(B) OF DEPRECIATION TABLE IS THAT THE DEVICE PURCHASED BY THE ASSESSEE IS FOR THE PURPOSES OF MONITORING ENERGY FLOW WHEREAS DECODER BOXES ARE ONLY THE DEVICE THAT FACILITATE RECEIVING AND ONWARD TRANSMI SSION OF SIGNALS. IT IS THEREFORE NOT AN ENERGY SAVING DEVICE. THEREFORE IT WOULD STAND DISQUALIFIED AT THE THRESHOLD NOT FALLING WITHIN TH E RELEVANT CLAUSE III(3) (III) (I.E. ENERGY SAVING DEVICE). THE LD. DR SUB MITTED THAT ENERGY SAVING FROM THAT DEVICE REMAINED UNPROVED AND WOULD BE MINIMAL AND WOULD ONLY BE INCIDENTAL TO THE OPERATION OF THE UN IT AS THEY ARE BASED ON SUPERIOR TECHNOLOGY. GOING BY THE ASSESSEES ARGUME NTS GADGET OR EQUIPMENT REPRESENTING A BETTER TECHNOLOGY WOULD AL WAYS BE THE ENERGY SAVING DEVICE. THUS BY MISQUALIFYING THE DEVICE TH E ASSESSEE HAS SOUGHT TO CLAIM 100% DEPRECIATION TO WHICH IT WAS NOT ENTI TLED. 8. REGARDING SECOND ISSUE AS TO THE DATE OF INSTALL ATION OF THE DEVICE LD. DR SUBMITTED THAT ASSESSEE HAS FURNISHED INACCU RATE PARTICULARS BY 6 CLAIMING THAT THOSE DEVICES WERE INSTALLED AND PUT TO USE PRIOR TO 30 TH SEPTEMBER 1995 WHEREAS ACTUALLY THEY WERE INSTALLE D AND PUT TO USE IN MARCH 1996. BY PUTTING UP INCORRECT FACTS THE ASS ESSEE HAS SOUGHT TO CLAIM DEPRECIATION FOR WHOLE OF THE YEAR WHEREAS DE PRECIATION COULD BE ALLOWED ONLY ON THE PREMISES THAT IT WAS PUT TO USE FOR LESS THAN 180 DAYS I.E. ONLY HALF OF THE DEPRECIATION COULD BE ALLOWED TO THE ASSESSEE. FOR THE DETAILED REASONS AND FACTS LD. DR RELIED ON THE PE NALTY ORDER PASSED BY THE AO. 9. THE LD. AR ON THE OTHER HAND SUBMITTED THAT CLAI M OF 100% DEPRECIATION WAS MADE ON THE BASIS OF EXPERTS REPO RTS AND INFORMATION THAT THE INSTRUMENTS PURCHASED BY THE ASSESSEE ARE ENERGY SAVING DEVICES. FURTHER DOCUMENTARY EVIDENCES SUGGEST THA T DEVICES WERE PURCHASED IN SEPTEMBER 1995 AND THEREFORE CLAIM FOR DEPRECIATION BY TREATING THE USE FOR ENTIRE YEAR WAS MADE. IN ANY C ASE LD. AR SUBMITTED THAT NO INCORRECT FACTS HAVE BEEN FOUND BY THE REVE NUE AND THE PENALTY COULD NOT BE LEVIED MERELY ON THE BASIS OF UNSUSTAI NABLE CLAIM. THE LD. AR REFERRED TO THE DECISION OF HON. SUPREME COURT I N CIT VS. RELIANCE PETRO PRODUCTS 322 ITR ITR 158 (SC). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. IN OUR MOST CONSIDERED VIEW THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF LD. CIT(A). THERE ARE MAINLY THREE ISS UES INVOLVED IN THE PRESENT APPEAL ONE IS THAT AO HAS IMPOSED PENALTY @ 300% OF THE TAX SOUGHT TO BE EVADED WHICH HAS BEEN REDUCED BY LD. C IT(A) TO 100% OF THE TAX SOUGHT TO BE EVADED. SECONDLY PENALTY HAS BEEN LEVIED ON DISALLOWANCES OF THE CLAIM MADE BY THE ASSESSEE FOR 100% DEPRECIATION ON MICRO PROCESSOR BASED INTEGRATED RECEIVER DECODE RS (IN SHORT DECODER BOXES) BY PRESUMING THEM TO BE ENERGY SAVI NG DEVICES FALLING 7 UNDER ITEM III(3)(III)(B). THIS ISSUE HAS TRAVELED TO THE TRIBUNAL WHICH VIDE ITS ORDER IN ITA NO.606/AHD/2000 ASST. YEAR 19 96-97 DATED 10.3.2006 DECIDED AS UNDER :- 8.1 WE FIND THE ASSESSEES CLAIM AS UNTENABLE ON T WO COUNTS. FIRSTLY BEING NOT A MONITORING SYSTEM USED FOR THE PURPOSE OF MONITORING ENERGY FLOW ITS CASE WOULD NOT FALL UNDER ITEM # III(3)(I II)(B) OF THE DEPRECIATION TABLE I.E. AS AN INSTRUMENTATION AND MONITORING SY STEM FOR MONITORING ENERGY FLOW. AS SUCH WHETHER OR NOT IT IS A MICRO PROCESSED BASED SYSTEM OR NOT BECOMES IRRELEVANT BEING DISQUALIFIE D ON FUNCTIONAL GROUNDS. FURTHER AS APPARENT THE DECODER BOX IS N OT A CONTROL SYSTEM. AS SUCH THOUGH MICRO PROCESSOR BASED UNIT IT CANNO T BE SAID TO BE A MICRO PROCESSOR BASED CONTROL SYSTEM SO THAT IT WO ULD EVEN OTHERWISE I.E. W.R.T. THE PARTICULAR DESCRIPTION OF PLANT AND MACHINERY BE NOT ENTITLED THE CONTROL ELEMENT IS INTRINSIC TO MONITO RING. SECONDLY AS ALSO POINTED OUT BY THE LD. CIT(A) THE DECODER BOX IS A DEVICE THAT FACILITATES THE RECEIVING AND ONWARD TRANSMISSION OF SIGNALS AN D CANNOT BE CONSIDERED ON THAT SCORE AS AN ENERGY SAVING DEVI CE SO THAT IT WOULD STAND DISQUALIFIED AT THE THRESHOLD NOT FALLING WI THIN THE RELEVANT CLAUSE III(3)(III) I.E. ENERGY SAVING DEVICE ITSELF. THE F ACT OF ENERGY SAVING WHICH OTHERWISE STANDS UNPROVEN WOULD ONLY BE ONLY MINIMA L AND FURTHER ONLY INCIDENTAL TO THE OPERATION OF THE UNIT BEARING A S UPERIOR TECHNOLOGY. GOING BY THE ASSESSEES ARGUMENTS ANY ITEMGADGET/ EQUIPMENT REPRESENTING A BETTER TECHNOLOGY E.G. A REFRIGERAT OR OR A ROOM AIR- CONDITIONER WHICH CONSUMES LESS AMPERES (OF ELECTR IC CURRENT) AND THUS LESS POWER THAN THE EXISTING ONES WOULD ALSO QUALI FY TO BE ENERGY SAVING DEVICES. OR SAY CARS OF THE PRESENT GENERATION WHI CH ARE MORE FUEL EFFICIENT THAN THEIR PREDECESSOR VERSIONS AND HAVE MICRO PROCESSOR BASED FUEL INJECTION SYSTEMS. AND SO ON. 11. THUS THE TRIBUNAL HAS HELD THAT DECODER BOXES ARE NOT ENTITLED FOR 100% DEPRECIATION. THE CLAIM FOR 100% DEPRECIATION TREATING THE DECODER BOXES AS ENERGY SAVING DEVICES WAS MADE AS CLAIMED BY THE ASSESSEE ON THE BASIS OF EXPERTS REPORTS AND INFORMATION WHICH FACT IS NOT DENIED BY THE REVENUE OFFICERS. THE CLAIM WAS NOT ACCEPTED BY THE TRIBUNAL AND THE ISSUE ATTAINED FINALITY. ON THESE FACTS THE RA TIO OF THE DECISION OF HON. 8 SUPREME COURT IN CIT VS. RELIANCE PETRO PRODUCTS (S UPRA) WILL BE APPLICABLE. IT IS HELD THEREIN THAT ON MERE MAKING OF CLAIM WHICH IS NOT SUSTAINABLE BY LAW BY ITSELF WILL NOT AMOUNT TO FUR NISHING OF INACCURATE PARTICULARS OF INCOME OF THE ASSESSEE. IF THE CONTE NTION OF REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLA IM MADE IS NOT ACCEPTED BY THE AO FOR ANY REASON THE ASSESSEE WIL L INVITE PENALTY UNDER SECTION 271(1)(C). THIS IS NOT CLEARLY THE INTENTME NT OF THE LEGISLATURE. 12. IN VIEW OF THIS WE CONFIRM THE ORDER OF LD. CI T(A) IN RESPECT OF DELETION OF PENALTY ON AN ADDITION MADE BY AO BY DI SALLOWING THE CLAIM OF 100% DEPRECIATION ON DECODER BOXES. 13. REGARDING THIRD ISSUE WHICH IS APPEARING FROM T HE ORDER OF LD. CIT(A) IS THE LEVY OF PENALTY IN RESPECT OF DISALLO WANCE OF THE CLAIM OF DEPRECIATION MADE FOR WHOLE OF THE YEAR BY PUTTING UP THE FACTS BEFORE THE AO THAT DECODER BOXES WERE USED FOR WHOLE OF THE YE AR WHEREAS FACTS BROUGHT OUT BY THE AO CLEARLY INDICATE THAT DECODER BOXES WERE PUT TO USE ONLY AFTER 1 ST OCTOBER 1995. IN THE ASSESSMENT ORDER PASSED BY T HE AO ON 25.2.2002 AFTER GIVING APPEAL EFFECT ORDER OF THE O RDER OF LD. CIT(A) IT IS NOTICED THAT ENQUIRIES CARRIED OUT BY THE AO FROM M /S SRITECH INFORMATION TECHNOLOGIES (P) LTD. BANGALORE REVEAL ED THAT DECODER BOXES WERE SOLD TO THE ASSESSEE IN THE MONTH OF MAR CH 1996. IN THIS REGARD THE AO NOTED FOLLOWING COMMUNICATIONS FROM M /S SRITECH INFORMATION TECHNOLOGIES (P) LTD.:- IN CONTINUATION TO OUR LETTER DATED 01.12.99 WE F URTHER CONFIRM THAT WE HAVE SOLD ONLY 140 UNITS OF MULTI CHANNEL INTEGRATE D RECEIVER DECODER (BASE UNIT WITH 2 CHANNELS) VIDE OUR INVOICE NO.004 N DTD.23.03.1996 (AS PER YOUR ANNEXURE B) FOR A SUM OF RS.39 31 200/- TO M/S TRANSPEK FINANCE LTD. ON ACCOUNT OF M/S SRISHTI VEDEOCORP LT D. DELHI. 9 THE AO ALSO CARRIED OUT ENQUIRIES FROM SRISHTI VEDE OCORP LTD. NOIDA TO WHOM THE DECODER BOXES WERE LEASED OUT. M/S SRISHTI VIDEOCORPN LTD. SUBMITTED ITS REPLY VIDE LETTER DATED 23 RD DECEMBER 1999 WHICH REVEALED THAT THEY HAD TAKEN ON LEASE 140 BASE UNIT OF DECOD ER BOXES FROM THE ASSESSEE VIDE AGREEMENT DATED 25 TH SEPTEMBER 1995 AND LEASE RENTALS OF RS.3 02 965/- PER QUARTER WERE PAID. SUBSEQUENT ENQ UIRIES REVEALED THAT THE DECODER BOXES WERE SUPPLIED TO CABLE OPERATORS FREE OF COST AND M/S SRISHTI VIDEOCORP LTD. SEEMS TO HAVE CLOSED OPERATI ON AS THE FACTORY WAS FOUND LOCKED AT NOIDA AS INDICATED FROM THE ENQUIRI ES CARRIED OUT BY THE ITO NOIDA. OPPORTUNITIES WERE ALSO GIVEN TO THE AS SESSEE. HOWEVER THE FACTS COLLECTED BY THE AO REVEALED THAT SRITECH INF ORMATION TECHNOLOGIES (P) LTD. DID NOT SUPPLY DECODER BOXES BEFORE 30 TH SEPTEMBER 1995 REMAINED UNCONTROVERTED. HOWEVER THE ASSESSEE COMP ANY PROVIDED DETAILS OF THE PAYMENT MADE TO SRITECH INFORMATION TECHNOLOGIES (P) LTD. BANGALORE ONLY. IN VIEW OF THESE FACTS WE HOLD TH AT ASSESSEE COMPANY HAD FURNISHED INCORRECT PARTICULARS BY CLAIMING THA T DECODER BOXES WERE TRANSPORTED TO M/S SRISHTI VIDEOCORP (P) LTD. PRIOR TO 30 TH SEPTEMBER 1995 WHEREAS THE FACTS WERE THAT THEY WERE ONLY SUP PLIED IN MARCH 1996 ON THE BASIS OF WHICH ASSESSEE COULD BE ENTITLED TO ONLY 50% OF THE DEPRECIATION AND NOT 100% OF THE DEPRECIATION AT TH E SCHEDULED RATES. WE THEREFORE AGREE WITH THE LD. CIT(A) THAT DEPRECIAT ION FOR WHOLE OF THE YEAR WAS CLAIMED ON THE BASIS OF WRONG FACTS WHICH FALL UNDER THE CATEGORY OF FURNISHING INACCURATE PARTICULARS AS P ROVIDED IN SECTION 271(1)(C). THE CASE OF THE ASSESSEE WOULD ALSO FALL S IN CLAUSE-A OF EXPLANATION-1 TO SECTION 271(1)(C) WHICH HOLD THE ADDITION TO THE TOTAL INCOME AS DEEMED CONCEALMENT OF INCOME AND INCOME I N RESPECT OF WHICH ASSESSEE HAS FURNISHED INACCURATE PARTICULARS IF EXPLANATION FURNISHED BY THE ASSESSEE IS FOUND FALSE. IN THE PR ESENT CASE THE 10 EXPLANATION OF THE ASSESSEE THAT IT HAD PURCHASED T HE DECODER BOXES BEFORE 30 TH DECEMBER 1995 AND ALSO PUT TO USE BEFORE THAT DAT E WAS FOUND FALSE ON THE BASIS OF FACTS DISCOVERED BY THE AO AND WHIC H REMAINED UNCONTROVERTED. ACCORDINGLY PENALTY FOR CONCEALMENT IS LEVIABLE IN RESPECT OF THIS PORTION OF THE ADDITION. 14. SO FAR AS REDUCING THE PENALTY FROM 300% TO 100 % IS CONCERNED WE AGREE WITH THE LD. CIT(A) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE ONLY MINIMUM PENALTY BEING 100% OF TAX SOUGHT TO BE EVADED SHOULD BE LEVIED. 15. AS A RESULT APPEAL FILED BY THE REVENUE AS WEL L AS THE CO FILED BY THE ASSESSEE ARE DISMISSED. SD/- SD/- (MUKUL SHRAWAT) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 30/4/2010 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD ORDER PRONOUNCED IN OPEN COURT ON 30/4/2010