SH. HARDEEP SACHDEVA,NEW DELHI vs. ACIT, NEW DELHI

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ITA 5948/DEL/2014Status: DisposedITAT Delhi26 December 2018AY 2010-114 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 held that since similar depreciation claims were allowed in earlier years and the issue was debatable, there was no concealment of income or inaccurate particulars furnished. Therefore, the penalty under Section 271(1)(c) was not attracted.

What were the facts?

The assessee claimed depreciation on property, including land, which was disallowed by the Assessing Officer. Penalty proceedings under Section 271(1)(c) were initiated for concealment of income. The CIT(A) dismissed the assessee's appeal against the penalty.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied when the issue of depreciation on land and building is debatable and has been allowed in previous years.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI

Before: SHRI R. K. PANDA & MS SUCHITRA KAMBLE

Hearing: 19.12.2018Pronounced: 26.12.2018

This appeal is filed by the assessee against the order dated 18/09/2014 passed by CIT(A)-XXVIII, New Delhi for Assessment Year 2010-11.

2.

The grounds of appeal are as under:-

“1. That the Ld. Commissioner (Appeals) has erred in law as well as in facts by sustaining the penalty order u/s 271(1) (c) of the Assessing Officer .” 3. Assessment in this case was completed u/s 143(3) of the Income Tax Act, 1961 on 26/3/2013 at an income of Rs. 1,92,93,079/- against the return income of Rs. 1,04,46,937/-. During the assessment proceedings the following additions/disallowances was made by the Assessing Officer:- (i) Depreciation on property of Rs. 5,67,000/- (ii) Excess depreciation claimed on books of Rs. 5,20,800/- (iii) Disallowance of professional fees of Rs. 69,37,275/- (iv) Disallowance towards 14A of Rs. 1,13,542/- (v) Disallowance towards foreign travelling expenses of Rs. 5,08,967/- (vi) Disallowance towards personal of Rs.1,98,558/- Penalty proceedings u/s 271(1)(c) was initiated on the point No. (i) (ii) (iii) ( iv) &(v) by the Assessing Officer. The assessee preferred an appeal before the CIT(A) on Point No. (ii), (iii) & (v) and did not file any appeal for addition on account of depreciation of property i.e. Point No.

1.

Therefore, the Assessing Officer issued the penalty notice u/s 271(1)(c) for concealment of income and furnishing of inaccurate particulars. The assessee made submissions before the Assessing Officer. After considering the submissions of the assessee, the Assessing Officer imposed penalty of Rs. 1,75,200/-.

4.

Being aggrieved by the penalty order, the assessee filed appeal before the CIT (A). The CIT(A) dismissed the appeal of the assessee.

5.

The Ld. AR submitted that during the year, the assessee claimed depreciation of Rs. 11,34,000/- on the property situated at Greater Kailash, New Delhi. The assessee also claimed depreciation on the value of land as well. The assessee claimed these depreciations as per the various decisions of the Tribunals wherein the depreciation on land and building has been allowed in similar circumstances. Thus, the Ld. AR submitted that this issue is a debatable issue, and therefore, the Assessing Officer was not justified in initiating the penalty proceedings u/s 271(1)(c) as there is no element of concealment of income or inaccurate furnishing of documents. The Ld. AR relied upon the decisions of the Delhi Tribunal in case of Namaste Voyages Pvt. Ltd. Vs. ITO (2010) 5 ITR 19, wherein it is held that the value of land and building shown as composite figure and depreciation in that regard was inadvertently claimed which was allowed for the past years without reducing value of land does not amount to concealment of income. The Ld. AR further submitted that in similar circumstances in earlier Assessment Year, the revenue has allowed this depreciation.

6.

The Ld. DR relied upon the order of the Assessing Officer passed u/s 271(1)(c) and also relied upon the order of the Hon'ble Delhi High Court in case of Md. Raza Vs. CIT(A) 2016-TIOL-2026-SC-DEL-IT.

7.

We have heard both the parties and perused the material available on record. It is pertinent to note that in earlier Assessment Years similar claim of the depreciation has been allowed by the Revenue Authorities. The issue is debatable issue and some of the decisions decided in favour of the assessee on the issue of depreciation. Thus, there was no concealment of income or inaccurate furnishing of particulars on part of the assessee. The case law relied upon by the Ld. DR is not applicable in the present case as in that case the assessee did not disclose the details of the creditors nor their list but merely claimed in the return. In the present assessee’s case the assessee claimed the depreciation after filing the details and there was no concealment or inaccurate furnishing of documents as the issue is allowed in respect of depreciation claimed for land and building. Therefore, Section 271(1)(c) will not be attracted in the present case. The order of the CIT(A) is set aside and appeal of the assessee is allowed.

8.

In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 26th December, 2018.

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