M.V. Omni Projects (India) Ltd.,, Ahmedabad v. The Dy.CIT(OSD)-1, Circle-4,, Ahmedabad

ITA 3174/AHD/2014 | 2010-2011
Pronouncement Date: 15-11-2017 | Result: Allowed

Appeal Details

RSA Number 317420514 RSA 2014
Assessee PAN AADCM1155A
Bench Ahmedabad
Appeal Number ITA 3174/AHD/2014
Duration Of Justice 2 year(s) 11 month(s) 13 day(s)
Appellant M.V. Omni Projects (India) Ltd.,, Ahmedabad
Respondent The Dy.CIT(OSD)-1, Circle-4,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 15-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 15-11-2017
Assessment Year 2010-2011
Appeal Filed On 02-12-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER & SHRI S. S. GODARA JUDICIAL MEMBER) ITA. NO: 3174/AHD/2014 (ASSESSMENT YEAR: 2010-11) M.V. OMNI PROJECTS (INDIA) LTD. 74-A NEW YORK TOWER S.G. HIGHWAY THALTEJ AHMEDABAD- 380058 V/S THE DEPUTY COMMISSIONER OF INCOME-TAX (OSD)-1 CIRCLE-4 AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AADCM1155A APPELLANT BY : SHRI JIGNESH PARIKH AR RESPONDENT BY : SHRI MUDIT NAGPAL SR. D.R. ( )/ ORDER DATE OF HEARING : 01 -11-201 7 DATE OF PRONOUNCEMENT : 15 -11-2017 PER N.K. BILLAIYA ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)- VIII AHMEDABAD DATED 29.10.2014 PERTAINING TO A.Y. 2010-11. ITA NO3174/A HD/2014 . A.Y. 2010-11 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 22.03.2013 FRAMED U/S. 143(3) OF THE ACT. THE RETURNED INCOME OF THE ASSESSEE RS. 4 43 38 110/- WAS ASSESSED AFTER MAKING THE FOLLOWI NG ADDITIONS/DISALLOWANCES; (I) GRATUITY U/S.40A(7) RS. 6 37 870/- (II) EPF RS. 73 667/- (III) PRELIMINARY EXPENSE RS. 3 71 660/- (IV) DISALLOWANCE U/S. 40(A)(IA) RS. 24 000/- (E) EXCESS CLAIM OF DEPRECIATION RS. 1 33 961/-. 4. PENALTY PROCEEDING WERE SEPARATELY INITIATED. 5. DURING THE COURSE OF THE PENAL PROCEEDINGS THE ASS ESSEE WAS ASKED TO EXPLAIN WHY PENALTY SHOULD NOT BE LEVIED U/S. 271(1)(C) OF THE ACT FOR CONCEALMENT OF ITS INCOME BY FURNISHING INACCURATE PARTICULAR WITH IN THE MEANING OF SECTION 271(1)(C) OF THE ACT. 6. ASSESSEE FILED A DETAILED REPLY CLAIMING THAT THE P ROVISION FOR GRATUITY WAS IN FACT AS PER AND IN ACCORDANCE WITH THE ACCRUAL SYST EM OF ACCOUNTING REGULARLY EMPLOYED BY THE COMPANY AND THE AUDITOR HAS NOT POI NTED OUT ANY ERROR OR IRREGULARITY IN CREATING SUCH PROVISION. THE PRELIM INARY EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT WAS IN FACT WITH REFERENCE TO THOSE EXPENSES WHICH WERE REQUIRED TO BE DEBITED AS SUCH AND THE AUDITORS HAV E NOT QUALIFIED THEIR REPORT. THE DEPRECIATION HAS BEEN DISALLOWED BY RE-CALCULAT ING THE WRITTEN DOWN VALUE OF THE DEPRECIABLE ASSETS AND THIS DISALLOWANCE IS BASED UPON THE VIEW TAKEN ITA NO3174/A HD/2014 . A.Y. 2010-11 3 WHILE PASSING THE ASSESSMENT ORDER FOR A.Y. 2006-07 . IT WAS STRONGLY CONTENDED THAT THE ASSESSEE HAS NOT CONCEALED/FILED ANY INACC URATE PARTICULARS OF INCOME AND ALL ITS CLAIMS ARE BASED ON THE AUDITORS REPOR T. 7. THE CONTENTIONS OF THE ASSESSEE DID NOT FIND ANY FA VOUR WITH THE A.O. WHO CONCLUDED BY LEVYING PENALTY OF RS./ 3 43 043/- U/S . 271(1)(C) OF THE ACT. 8. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 9. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE REITERA TED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. PER CONTRA THE LD. D .R. STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE FIND IN THE NOTED TO THE ACCOUNTS THE AU DITORS HAVE CLEARLY MENTIONED AT CLAUSE 11 THAT THE COMPANY HAS ADOPTED POLICY FOR PROVISION OF GRATUITY PAYABLE BASED ON THE ELIGIBLE EMPLOYEES AN D ACCORDINGLY RS. 7 37 870/- HAS BEEN CREATED UNDER THE HEAD PROVISION AND CHARG ED TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR. THESE FINANCIAL STATEMENTS WE RE FURNISHED BY THE ASSESSEE WITH THE RETURN OF INCOME. THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAD CONCEALED OR FILED INACCURATE PARTICULARS OF INCOME . WE FIND THAT THE AUDITORS HAVE ALSO NOT FOUND ANY IRREGULARITY IN THE CREATIO N OF SUCH PROVISION. FURTHER THE EXCESS DEPRECIATION DISALLOWED BY THE A.O. IS B ASED UPON THE RE-WORKING OF THE WDV WHICH WAS BASED ON THE FINDINGS GIVEN IN A. Y. 2006-07. THE ASSESSEE CANNOT BE EXPECTED TO KNOW WHAT VIEW WOULD BE TAKEN BY THE A.O. IN THE PRECEDING ASSESSMENT YEARS. THE ASSESSEE HAD CLAIME D DEPRECIATION ON THE ITA NO3174/A HD/2014 . A.Y. 2010-11 4 WDV AS PER ITS BOOKS OF ACCOUNTS. THEREFORE THE SA ME CANNOT BE CONSIDERED AS FILING INACCURATE PARTICULARS. 11. INSOFAR AS THE WRITE OFF OF PRELIMINARY EXPENSES IS CONCERNED WE FIND THAT THE AUDITORS IN CLAUSE 50 OF FORM 3CD HAS CLEARLY MENTI ONED THE AMOUNT OF PRELIMINARY EXPENSES AT RS. 5 32 860/- AS ADMISSIBL E U/S. 35D OF THE ACT. BASED UPON THESE OBSERVATIONS OF THESE AUDITORS TH E ASSESSEE CLAIMED THE WRITE OFF OF PRELIMINARY EXPENSES. THEREFORE IT CANNOT B E SAID THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME OR HAS CONCE ALED PARTICULARS OF INCOME. 12. ON THE FACTS OF THE CASE MENTIONED/DISCUSSED HEREIN ABOVE WE DO NOT FIND THIS TO BE A FIT CASE FOR THE LEVY OF PENALTY U/S. 271(1 )(C) OF THE ACT. WE ACCORDINGLY DIRECT THE A.O. TO DELETE THE PENALTY SO LEVIED. AP PEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 15- 11- 20 17 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY A CCOUNTANT MEMBER AHMEDABAD: DATED 15/11/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHME DABAD