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Income Tax Appellate Tribunal, “A”
Before: SHRI S.S.GODARA & SHRI INTURI RAMA RAO
आयकर अपीलीय अिधकरण “ए” �ायपीठ पुणे म�। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपीलसं. / ITA No.1122/PUN/2019 िनधा�रणवष� / Assessment Year : 2010-11 Alpha Foam Limited, The DCIT, Circle-8, Pune. J-172, MIDC, Bhosari, Vs Pune – 411026. . PAN: AACCA 4196 J Appellant/ Assessee Respondent /Revenue Assessee by Shri Nikhil S Pathak – AR Revenue by Shri Ramnath P Murkunde – DR Date of hearing 07/09/2022 Date of pronouncement 16/11/2022 आदेश/ ORDER Per S.S.Godara, JM: This assessee’s appeal for Assessment Year 2010-11 is directed against the Commissioner of Income Tax(Appeal)-6, Pune’s in case no.PN/CIT(A)-6/10040/2018-19 dated 12.06.2019, in proceedings u/s.271(1)(c) of the Income Tax Act, 1961 [in short “the Act”]. Heard both the parties. Case file perused.
It emerges at the outset with the able assistance of both the parties that the assessee’s sole substantive grievance raised herein challenges correctness of section 271(1)(c) penalty amounting to Rs.3,41,940/- imposed by the Assessing Officer in his order dated 30.03.2018 regarding four folded disallowances of depreciation,
ITA No.1122/PUN/2019 for A.Y. 2010-11 (A) Alpha Foam Limited
sales promotion, section 40A(i) and legal professional expenses involving varying sums, which stand upheld to the extent of depreciation disallowance amounting of Rs.3,30,500/- as per the CIT(A)’s lower appellate discussion.
We further find that the Assessing Officer had framed his assessment on 31.01.2013 disallowing the assessee’s quantum claim of having installed its vaccum foaming machine on 31st March of 2010 and that the same had also been put up to use on the very date. The Assessing Officer held in page 2, para 4 of his assessment order that the assessee could not prove to have installed / put to use the said machine and therefore, he disallowed the same in issue of Rs.3,32,500/-. It is, in this factual backdrop that the learned lower authorities have imposed the impugned corresponding penalty which leaves the assessee aggrieved.
We have given our thoughtful consideration to vehement rival submissions and find merit in assessee’s stand. There could hardly be any dispute about the hon’ble apex court having settled the law that quantum and penalty proceedings are parallel in nature wherein any disallowance or addition made in the course of former does not ipso-facto attract the latter provision as per CIT vs. Reliance Petro- Products in 322ITR 158 (SC). We keep in mind that this fine distinction and note that the mere fact of the assessee having failed to
ITA No.1122/PUN/2019 for A.Y. 2010-11 (A) Alpha Foam Limited
prove its vaccum foaming machine having been put to use on 31.03.2010 for the purpose of raising depreciation claim would not make it liable for the impugned penalty. This is in view of the fact that the assessee’s books had duly claimed to have installed / put to use the above stated asset which ultimately could not be proved. Faced with this situation, we delete the impugned penalty. Ordered accordingly.
This assessee’s appeal is allowed.
Order pronounced in the open Court on 16th November, 2022.
Sd/- Sd/- (INTURI RAMA RAO) (S.S.GODARA) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 16th Nov, 2022/ SGR* आदेशक��ितिलिपअ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, पुणे / DR, ITAT, “A” Bench, Pune. गाड�फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.