CIT vs. CONVERGYS INDIA SERVICES PVT LTD

PDF · subscribers
ITA - 619 / 2011HC Delhi08 April 20111 pages
For Petitioner: DEEPAK ANAND
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Department's appeal with costs of Rs. 10,000. The Court found no reason for the Department to file an appeal in this case. The Court observed that depreciation is allowed even on computer accessories and peripherals. Therefore, the imposition of penalty under Section 271(1)(c) was unjustified. The Court noted that if the assessee had challenged the AO's order in the quantum proceedings, they would have succeeded. Consequently, there was no basis for imposing any penalty. The issue of depreciation on computer accessories and peripherals was implicitly decided in favor of the assessee, leading to the deletion of the penalty.

What were the facts?

The assessee claimed depreciation at 60% on computer accessories and peripherals, such as printers, USP, ports, routers, and racks. The Assessing Officer (AO) allowed 60% depreciation only on computer software, restricting it to 25% for computer accessories. The AO also initiated penalty proceedings under Section 271(1)(c) and imposed a penalty of Rs. 27,97,253. The assessee accepted the AO's order on the quantum of income but challenged the penalty. The Commissioner of Income Tax (Appeals) deleted the penalty, and the Income Tax Appellate Tribunal (ITAT) affirmed the CIT(A)'s order. The Department filed an appeal against the ITAT's decision.

What were the issues?

1. Whether the Department's appeal against the deletion of penalty under Section 271(1)(c) is maintainable, given that depreciation is allowable on computer accessories and peripherals. The Revenue argued that the appeal was filed against the ITAT's order which affirmed the deletion of penalty. The Assessee's contention, as understood from the High Court's observation, was that depreciation was indeed allowable on computer accessories and peripherals at the claimed rate, and therefore, the penalty for concealment of income or furnishing inaccurate particulars was not warranted. The judgment does not explicitly detail the Revenue's arguments beyond the fact that they filed the appeal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . 08.04.2011 . Present: Ms. Prem Lata Bansal, Sr. Advocate with Mr. Deepak Anand, Advocate for the appellant. Mr. Prakash Kumar, Advocate for the respondent. . + ITA No. 619/2011 . 1. The assessee, herein, had claimed depreciation @ 60% on computer accessories and peripherals like printers, USP, ports, reuters, racks, etc. The Assessing Officer was of the view that the assessee is entitled to depreciation @ 60% only on computer software and not on computer accessories. Insofar as, computer accessories are concerned, the depreciation was allowed @ 25%. At the same time, penalty proceedings were also started by the Assessing Officer under Section 271(1)(c) of Income Tax Act and penalty of Rs.27,97,253/- was imposed. Insofar as, quantum proceedings are concerned, assessee had accepted the order, however, the order of penalty was challenged by the assessee. The CIT(A) deleted the penalty and ITAT has affirmed the order of CIT(A). . 2. In a case like this, we fail to understand as to why even an appeal is filed by the Department. Insofar as, the issue of depreciation on computer accessories and peripherals are concerned, depreciation is allowed even on such items. Had the assessee challenged the order of the Assessing Officer in the . . quantum proceedings, the assessee would have even succeeded therein. In a case like this, there is no question of imposition of any penalty. . 3. This appeal, is accordingly, dismissed with costs quantifying to `10,000/-. . A.K. SIKRI, J. . M.L. MEHTA, J. APRIL 08, 2011 AK . . . 24 #

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →