SHILPA ARCHITECTS PLANNERS & DESIGNERS P LTD.,CHENNAI vs. DCIT, CHENNAI

PDF · subscribers
ITA 1063/CHNY/2017Status: DisposedITAT Chennai18 February 2021AY 2012-133 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal deleted the penalty, stating that once the quantum addition is deleted, the penalty levied on that basis will not survive. The lower authorities' orders were set aside.

What were the facts?

The assessee's appeal concerns the levy of penalty under Section 271(1)(c) for disallowance of depreciation on intangibles. The quantum appeal for a prior assessment year had resulted in the deletion of this disallowance.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying disallowance leading to the penalty has been deleted in a related appeal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGHAND SHRI G. MANJUNATHA

Hearing: 27.01.2021Pronounced: 18.02.2021

आदेश /O R D E R PER MAHAVIR SINGH, VP: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-15, Chennai in ITA No.274/A.Y.2012-13/CIT(A)-15/2015-16 dated 27.03.2017. The assessment was framed by DCIT, Corporate Circle 6(1), Chennai for the assessment year 2012-13 u/s. 143(3) of the Income Tax Act (herein after referred to as the Act), vide his order dated

1.

16.02.2015. The penalty under dispute was levied by DCIT, Corporate Circle – 6(1), Chennai u/s. 271(1)(c) of the Act, vide his order dated 31.08.2015 (the penalty under dispute).

2.

The only issue in this appeal of the assessee is levy of penalty u/s.271(1)(c) of the Act, confirmed by CIT(A) on disallowance of depreciation on intangibles. For this, assessee has raised various grounds, which we need not to reproduce.

3.

At the outset, the ld.counsel for the assessee stated that the quantum appeal in for assessment year 2009-10 was decided by the Tribunal vide order dated 06.06.2019, whereby Tribunal has deleted the disallowance by observing as under in para No.5 as under:- 5. It is now well settled that consideration by way of issuance of shares on the entire value of net assets and liabilities is a valid consideration. Reliance in this regard is placed on the decision of Hon’ble Kerala High Court in the case of Commonwealth Trust (India) Ltd vs CIT reported in 306 ITR 356 (Ker). The Hon’ble Kerala High Court had categorically observed that: if shares were transferred to the shareholders of the foreign company, then the transfer of property to the appellant company is against consideration in the form of value of shares allotted to the shareholders of the amalgamating company. Share capital is a liability of the company to the shareholders and so much so, value of shares allotted constitute value of the property acquired by the company in the course of amalgamation.

In view of the aforesaid findings in the facts and circumstances of the case and respectfully following the judicial precedents relied upon herein above, we direct the Ld.AO to grant depreciation on revalued portion of intangible assets for all the years in appeal before us. Accordingly the Ground Nos.1 to 7 raised by the assessee for the assessment year 2009-10 are allowed.

This quantum deletion in assessment year 2009-10 was applied in this assessment year 2012-13 also. Once, the quantum is deleted, penalty levied by AO and confirmed by CIT(A) u/s.271(1)(c) of the Act, on account of disallowance of depreciation on intangible assets will not survive. Hence, we delete the penalty and set aside the orders of lower authorities i.e., AO & CIT(A).

4.

In the result, the appeal of the assessee is allowed.

Order pronounced in the court on 18th February, 2021 at Chennai.

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 →