MOHITE AND MOHITE (ENGINEERS AND CONTRACTORS),KOLHAPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR, CENTRAL CIRCLE, KOLHAPUR

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “C”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.286 to 288/PUN/2022 िनधा�रण वष� / Assessment Years : 2013-14 to 2015-16 Mohite and Mohite Vs. ACIT, Central Circle, (Engineers and Contractors), Kolhapur. 240/B, Mohite House, General Thorat Marg, Tarabai Park, Kolhapur- 416003. PAN : AACFM4102F Appellant Respondent Assessee by : None Revenue by : Shri Suhas Kulkarni Date of hearing : 21.12.2022 Date of pronouncement : 22.12.2022 आदेश / ORDER PER INTURI RAMA RAO, AM: These are the appeals filed by the assessee directed against the separate orders of the ld. CIT(A)-11, Pune [‘the CIT(A)’] dated 15.02.2022 for the assessment years 2013-14, 2014-15 and 2015-16 respectively. 2. Since the identical facts and common issues are involved in all the above captioned three appeals, we proceed to dispose of the same by this common order.

2 ITA Nos.286 to 288/PUN/2022 3. For the sake of convenience and clarity, the facts relevant to the appeal in ITA No.286/PUN/2022 for the assessment year 2013-14 are stated herein. ITA No.286/PUN/2022, A.Y. 2013-14 : 4. Briefly, the facts of the case are that the appellant is a partnership firm deriving income under the head “business”. The Return of Income for the assessment year 2013-14 was filed on 30.09.2013 declaring loss of Rs.5,09,65,530/-. Against the said return of income, the assessment was completed by the Assistant Commissioner of Income Tax, (Central) Circle, Kolhapur (‘the Assessing Officer’) vide order dated 21.03.2016 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at a total loss of Rs.4,33,10,773/- after making addition on account of short term capital gains on sale of Helicopter of Rs.44,63,718/- with which we are concerned. The Assessing Officer also made disallowance of excess depreciation of Rs.30,14,116/- and disallowance of Helicopter expenses of Rs.19,672/-. The factual matrix of the additions is as under :- During the previous year relevant to the assessment year under consideration, the appellant firm sold the Helicopter for consideration of Rs.1,20,78,500/- and also purchased new

3 ITA Nos.286 to 288/PUN/2022 Helicopter for Rs.76,00,291/-. While computing the amount of admissible depreciation under the provisions of Income Tax Act, the appellant firm had deleted the opening value of block of assets under which the Helicopter had fallen to the extent of WDV Rs.14,490/- instead of reducing the sale consideration from opening value of block of assets under which the Helicopter falls. The Assessing Officer had computed the short term capital gains under the provisions of section 50 by reducing the sale consideration from the opening WDV and brought to tax a sum of Rs.44,63,718/-. This addition was not contested in appellate forum. Thus, the assessment made by the Assessing Officer attained the finality. Simultaneously, the Assessing Officer also initiated the penalty proceedings u/s 271(1)(c) for alleging that the appellant firm is guilty of furnishing of inaccurate particulars of income. In response to the show cause notice, the appellant contended that the appellant firm is not guilty of concealment of particulars of income nor it furnished inaccurate particulars of income, the addition was made based on the details furnished by the assessee in the return of income. It was further contended that it was merely inadvertent mistake on the part of the assessee and, therefore, no penalty can be levied. The reliance was also placed on the decision of the Hon’ble Punjab & Haryana High Court in the case of CIT vs. Ajaib Singh &

4 ITA Nos.286 to 288/PUN/2022 Co., 253 ITR 630 (P&H) and the decision of the Hon’ble Supreme Court in the case of M/s. Flexituff International Ltd. However, the Assessing Officer had rejected the said contention of the appellant that the mistake was inadvertent and proceeded with levy of penalty u/s 271(1)(c) of Rs.23,77,951/- vide penalty order dated 19.09.2016. Even on appeal before the ld. CIT(A), the ld. CIT(A) confirmed the levy of penalty. 5. Being aggrieved, the appellant is in appeal before us in the present appeal. 6. When the appeal was called on, non-appeared on behalf of the appellant-assessee despite due service of notice of hearing. 7. On the other hand, ld. Sr. DR submits that the contention of the appellant that it was an inadvertent mistake, cannot be accepted. It is mere a wrong claim and the ratio of the decision of the Hon’ble Delhi High Court in the case of CIT vs. Zoom Communication (P.) Ltd. [2010] 191 Taxman 179 (Delhi) is squarely applicable. Thus, it was prayed that the orders of the lower authorities should be sustained. 8. We heard the ld. Sr. DR and perused the material on record. The issue in the present appeal relates to levy of penalty u/s 271(1)(c) of the Act. The Assessing Officer had levied penalty on the basis of addition made u/s 50 of the Act. The factum of sale of

5 ITA Nos.286 to 288/PUN/2022 Helicopter for a consideration of Rs1,20,78,500/- was duly reflected in the annual accounts of the assessee. However, while computing the amount of admissible depreciation, the appellant had reduced from the opening value of the WD of the Helicopter instead of entire sale consideration as provided u/s 50 of the Act. The addition was made based on the information provided by the appellant during the course of assessment proceedings and on the basis of information contained in the Return of Income. Therefore, the appellant cannot be held guilty of furnishing of inaccurate particulars of income nor concealing of particulars of income. Since the information filed along with return of income, unequivocally stated that the Helicopter was sold for a consideration of Rs.1,20,78,500/- but, the appellant had failed to reduce the entire consideration received on sale of Helicopter from opening WDV of the block of assets under which the Helicopter falls and offered to tax the excess of sale consideration over opening value WDV of block of the assets. It is not even a case of wrong claim made by the assessee in the return of income. The fact that the entire information regarding the sale of the Helicopter was available in the return of income, an accompanied document, would go to show that it is bona-fide inadvertent error and the ratio of the decision of the Hon’ble Supreme Court in the case of Price Waterhouse Coopers

6 ITA Nos.286 to 288/PUN/2022 (P.) Ltd. vs. CIT, 25 taxmann.com 400 (SC) is squarely applicable. The mere fact that the assessee had chosen not to contest the addition in the appellate forum, cannot automatically entail levy of penalty as held by the Hon’ble Supreme Court in the case of Sir Shadi Lal Sugar & General Mills Ltd. vs. CIT, 168 ITR 705 (SC). 9. In the light of the above discussion, the appellant cannot be held guilty of furnishing inaccurate particulars of income or concealing the particulars of income and it is not a fit case for levy of penalty u/s 271(1)(c) of the Act. Hence, we reverse the orders passed by the lower authorities and quash the penalty order. Thus, the grounds of appeal filed by the assessee stand allowed. 10. In the result, the appeal filed by the assessee in ITA No.286/PUN/2022 for A.Y. 2013-14 stands allowed. ITA Nos.287 & 288/PUN/2022, A.Ys. 2014-15 & 2015-16 : 11. Since the facts and issues involved in all the above captioned three appeals are identical, therefore, our decision in ITA No.286/PUN/2022 for A.Y. 2013-14 shall apply mutatis mutandis to the remaining two appeals of the assessee in ITA Nos.287 & 288/PUN/2022 for A.Ys. 2014-15 & 2015-16 respectively. Accordingly, the remaining two appeals of the assessee in ITA

7 ITA Nos.286 to 288/PUN/2022 Nos.287 & 288/PUN/2022 for A.Ys. 2014-15 & 2015-16 are allowed. 12. To sum up, all the above captioned three appeals of the assessee stand allowed. Order pronounced on this 22nd day of December, 2022. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 22nd December, 2022. Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A)-11, Pune. 4. The Pr. CIT (Central), Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “C” ब�च, 5. पुणे / DR, ITAT, “C” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.