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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI INTURI RAMA RAO
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE
BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
ITA No.798/Bang/2015 Assessment year : 2010-11
M/s. Mann & Hummel Filter Pvt. Ltd., Vs. The Deputy Commissioner of Plot No.231/1, 11th Main Road, Income Tax, 1st Stage, 3rd Phase, Circle 12(1), Peenya Industrial Area, Bangalore. Bangalore – 560 058. PAN: AAECM 4056D APPELLANT RESPONDENT
Assessee by : Shri Narendra Sharma, Advocate Revenue by : Dr. P.V. Pradeep Kumar, Addl.CIT(DR)(ITAT)(Bengaluru)
Date of hearing : 04.12.2018 Date of Pronouncement : 31.12.2018 O R D E R Per N.V. Vasudevan, Vice President This appeal by the assessee is against the order dated 01.04.2015 of the CIT(Appeals)-4, Bangalore relating to assessment year 2010-11. In this appeal, the assessee has challenged the order of CIT(Appeals) whereby the CIT(A) confirmed the order of AO imposing penalty on the assessee u/s. 271(1)(c) of the Income Tax Act, 1961 (Act).
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The facts and circumstances leading to imposition of penalty by the AO are as follows. The assessee is a company engaged in the business of dealing in all types of automotive and industrial filters. In the course of assessment proceedings u/s. 143(3) of the Act, the AO noticed that the assessee had claimed depreciation on moulds and dyes at 30%. It is not in dispute that moulds and dyes used in plastic and rubber industries are alone eligible for depreciation @ 30%. According to the AO, since the assessee was in the business of mechanical engineering industry, the claim made for depreciation @ 30% was inappropriate. He held that the allowable depreciation was only 15% as it fell in the category of plant and machinery. Consequently, depreciation was disallowed to the extent of Rs.59,65,312.
The assessee had shown project development cost of Rs.2,92,94,687. In the Profit & Loss Account, the assessee had claimed depreciation at 100% of project development cost, as these costs had been capitalized in the books of accounts. In the computation of total income, the Assessee had disallowed depreciation and claimed the project development cost as allowable revenue expenditure. According to the AO, the assessee could not give any proper explanation with regard to the claim for deduction of project development cost. The AO disallowed the claim for deduction for the following reasons:-
“6. The claim of the assessee company cannot be accepted for the following reasons:- (i) In the preceding year, i.e., A.Y. 2009-10, the expense under the head `Project Development cost' was not claimed in profit and loss account. It was only capitalized. The AR has not been able to differentiate the facts, circumstances of A.Y. 2009-10 from A.Y. 2010-11. Hence, there is no reason that this expense
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should be charged to profit and loss account this year. This is violation of all principles of Accounting on the part of the assessee to follow two different methods for treatment of same expense in successive Assessment Years, (ii) From the financial statements of A.Y. 2010-11, it is noticed that the cost of Rs.2,92,94,687/- was first taken to block of assets, being addition to plant & machinery and then as an afterthought, it was claimed as Revenue expenditure. 7. The AR was asked to provide details on the nature of this expense of Rs.2,92,94687/- under the head 'Project Development cost'. The AR submitted the details on 14.03.2013. On analysis of these details, it was noticed that these were invoices for machinery purchased from the parent company M/ s. Mann & Hummel Japan Ltd. It is not clear from these details as to how this expense qualifies to be Revenue in nature. Even from the invoices produced the purpose of procuring the Machinery from the parent company and classifying, the expense as Project Development Cost' is not understandable. 8. Since, even after giving suitable opportunities, the AR / company has not been able to provide the reason / proof as to why this expense of Rs. 2,92,94,687/- should be charged to profit and loss account, when the purpose of this expense is not clear, the same is hereby disallowed and added to the income of the assessee.” 4. It is not in dispute that the aforesaid additions were not challenged by the assessee by filing an appeal. Therefore, the aforesaid additions have become final. It is in respect of aforesaid addition made in the course of assessment proceedings that the AO initiated penalty proceedings u/s. 271(1)(c) of the Act.
The plea of the assessee in the penalty proceedings was as follows:-
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(1) The P&L account filed for A.Y.2010-11 reflects the true and correct for the year ended 31.3.2010. There has been no concealment of any of the particulars of income including other incomes in the accounts of the company. (2) We have fully co-operated with the Income-tax Department in the conduct of the assessment proceedings. (3) Company has regularly filed its return of income over the years and remitted its tax obligations voluntarily. (4) Company did not furnish(ed) any inaccurate particulars thereof during the assessment proceedings.” 6. But this explanation was not accepted by the AO as proper explanation and he proceeded to impose penalty @ 100% of additions made.
On appeal by the assessee, the CIT(A) confirmed the order of the AO observing as follows:-
“4. From the facts recorded by the AO, it is clear that the assessee was fully aware that such expenditure claimed was capital in nature and by no stretch of imagination could be claimed as a deduction against the profits for the year. Nevertheless, it decided to make an intentional fabricated claim hoping that the case would not be picked up for scrutiny/audit. After perusing the authorities listed above, I find that they are fully applicable in the case of the assessee. In fact, the facts before the Delhi Bench of the Hon’ble Tribunal are identical to that of the assessee’s case. In such circumstances, I have no hesitation in confirming the action of the Assessing Officer.” 8. The CIT(A) has while coming to the aforesaid conclusion placed reliance on the following decisions:-
Yogesh T. Vani v. ITO, 129 ITD 61 (Ahd)
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ACIT v. Harvey Heart Hospitals Ltd. [2013] 32 taxman.com 348 (Chennai-Trib.) 3. CIT v. M. Thiruvengadam [2013] 36 taxman.com 321 (Madras) 4. Chadha Sugars P. Ltd. V. ACIT [2012] 18 taxman.com 241 (Delhi) 9. Aggrieved by the order of CIT(Appeals), the assessee has preferred the present appeal before the Tribunal.
The learned counsel for the Assessee submitted that in the show cause notice issued u/s.274 of the Act, the AO has mentioned that the Assessee is guilty of having furnished inaccurate particulars of income whereas in the order imposing penalty, the AO has given a finding that the Assessee is guilty of concealment of particulars of income. According to him ‘furnishing of inaccurate particulars of income’ and ‘concealing particulars of income’ carry different connotations. The AO should be clear as to which of the two limbs under which penalty is imposable, has been contravened or indicate that both have been contravened while initiating penalty proceedings. In this regard, he also drew our attention to the order of assessment and pointed out that the order of assessment, in which the additions were made and in respect of which additions penalty proceedings were initiated, also does not spell out the mind of the AO, except an observation that “penalty proceedings are being initiated separately”. According to him initiation of penalty proceedings cannot be in one limb and imposing penalty on another limb. He relied on the decision of the Hon’ble Bombay High Court in the case of CIT Vs. Shri Samson Perinchery ITA No.1154 of 2014 dated 5.1.2017, wherein the Hon’ble Bombay High Court on an identical argument, observed that the Hon’ble Supreme Court in the case of Ashok Pai Vs. CIT 292 ITR 11(SC) has clearly laid down that
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concealment of income and furnishing of inaccurate particulars of income in Sec.271(1)(c) of the Act, carry different meanings/connotations. Therefore, the satisfaction of the AO with regard to only one of the two breaches mentioned u/s.271(1)(c) of the Act, for initiation of penalty proceedings will not warrant/permit penalty being imposed for the other breach. The Hon’ble Court also observed that an Assessee would respond to the ground on which the penalty has been initiated/notice issued. Therefore, that the order imposing penalty has to be made only on the ground on which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the Assessee has not notice. In coming to the above conclusion, the Hon’ble Bombay High Court relied on the decision of the following passage in the decision of the Hon’ble Karnataka High Court in the case of Manjunatha Cotton and Ginning factory 359 ITR 565 (Karn.):-
“61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of T. Ashok Pai v. CIT [2007] 292 ITR 11/161 Taxman 340 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of CIT v. Manu Engg. [1980] 122 ITR 306 and the Delhi High Court in the case of CIT v. Virgo Marketing (P.) Ltd. [2008] 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of
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the relevant clauses will lead to an inference as to non-application of mind.” 11. The learned counsel thus submitted that the order imposing penalty has to be cancelled on this ground alone.
On merits, the learned counsel for the Assessee brought to our notice the following facts with regard to both the additions made in the order of assessment for which penalty was imposed u/s.271(1)(c) of the Act as follows:-
In the assessment proceedings the Assessee could not bring correct facts to the notice of the AO with regard to claim of deduction of product development expenses. However, in an application dated 29.4.2013 u/s.154 of the Act against the order of assessment dated 14.3.2013, a copy of which is at page-47 of Assessee’s paper book, the Assessee brought to the notice of the AO the fact that the Assessee was in the business of producing high-tech filters in a competitive automobile sector and these filters need to be re- engineered regularly. Consequently, the filter products are re- designed, re-modeled to suit the prototype engines of the new vehicles coming in the automobile sector. Till the new filters match the technical parameters of the vehicle manufacturers, the Assessee does not get sales orders and in due course, technical obsolescence sets in. When evidence is available of obsolescence, which would have adverse impact on the Assessee’s operations, no further resources are put in support of these product. The Assessee as a policy writes off product development cost in the year it is incurred, where the commercial aspect of the product cannot be economically established. These costs are initially capitalized as fixed assets in
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the books of account but once the products developed did not show economic viability, the same is fully depreciation/impaired in the books of accounts of the Assessee as per the guidelines of Accounting Standard 28 issued by the Institute of Chartered Accountants of India. The loss being a loss in the course of business operations of the Assessee, the same is allowable as revenue expenditure.
As far as claiming depreciation on Moulds and dyes at 30%, the Assessee brought to the notice of the AO the fact that the Assessee is in the business of manufacture of hi-tech plastic filters and the Moulds & Dies purchased were for manufacturing of these plastic filters and therefore depreciation was claimed on moulds and dies used in plastic or rubber products. Therefore, there was no furnishing of inaccurate particulars.
The learned counsel further submitted that there can be no concealment of particulars of income in the present case, as all facts were placed by the Assessee before the AO and imposing of penalty on the ground that the Assessee concealed particulars of income is untenable. There cannot be any case of furnishing of inaccurate particulars of income also, because the claim made by the Assessee for deduction of product development cost as well as depreciation on moulds and dyes were on some basis and not with any intent to furnish inaccurate particulars of income. He submitted that imposition of penalty is only discretionary and all facts should be kept in mind and the bonafides of the claim should also be seen. The fact that a claim made by the Assessee is not accepted in the assessment proceedings will not ipso facto lead to the conclusion that penalty for concealment or furnishing inaccurate particulars should be
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imposed automatically. He also distinguished the cases cited by the learned CIT(A) in the impugned order as decisions rendered on their own facts and not application to the case of the Assessee.
The learned DR submitted that the argument of the learned counsel for the Assessee that there is complete non-application of mind by the AO in as much as in the show cause notice u/s. 274 of the Act the charge is furnishing of inaccurate particulars of income whereas the order imposing penalty the charge and finding is that the Assessee has concealed particulars of income, should not be accepted. According to him, the purpose of show cause notice is only to afford opportunity of being heard to the Assessee. His further submission was that the AO in the course of penalty proceedings is free to examine both or either of the limbs of Sec.271(1)(c) of the Act viz., “furnishing of inaccurate particulars of income” or “concealing particulars of income”. It is not the case of the Assessee that he was not afforded opportunity of being heard. He drew our attention to para-4 at page-3 of the order imposing penalty, wherein the AO after noticing the reply of the Assessee, held as follows:-
“4. On verification of the written submissions made by the Assessee vide letter dated 29.9.2013, it is noticed that the Assessee has not given proper satisfactory explanation on the addition made of Rs.2,92,94,687/-. In view of the no proper explanation given by the Assessee company for the addition made of Rs.2,92,94,687/-, I am of the opinion that there is concealment of income and fit case to levy penalty u/s/271(1)( c) of the Act ….” 15. He further placed reliance on the decision of the Hon’ble Supreme Court in the case of Amitabh Bachchan 384 ITR 200 (SC). In the aforesaid case a revisional order u/s.263 passed by the Commissioner of Income Tax (CIT) was in challenge. The CIT proposed to revise the order of
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assessment already passed on certain grounds set out in the show cause notice. However, in the course of proceedings u/s.263 of the Act, he noticed certain other aspects of assessment not set out in the show cause notice u/s.263 of the Act and after putting assessee on notice on those aspects passed order u/s.263 of the Act, revising the order of assessment. When such action was challenged on the ground that the ground on which revision power was exercised was not set out in the show cause notice issued u/s.263 of the Act, the Hon’ble Supreme Court held that since opportunity was given to the Assessee, such objection cannot be sustained. The learned DR submitted on similar analogy, the argument of the learned counsel for the Assessee that there is complete non-application of mind by the AO in as much as in the show cause notice u/s.274 of the Act the charge is furnishing of inaccurate particulars of income whereas the order imposing penalty the charge and finding is that the Assessee has concealed particulars of income, should not be accepted. He submitted that the purpose of issue of show cause notice u/s.274 of the Act before imposing penalty u/s.271(1)( c) of the Act, is only to afford opportunity of being heard to the Assessee.
His further submission was that the law laid down by the Hon’ble Karnataka High Court in the case of Manjunatha Cotton & Ginning factory (supra) was contrary to the law laid down by the Hon’ble Supreme Court in the case of K.P.Madhusudan (2001) 118 Taxman 324 (SC). In the case of K.P.Madhusudan (supra), the Hon’ble Supreme Court the Hon’ble Supreme Court held that express invocation of any part of Explanations to Sec.271(1)( c) of the Act in the notice u/s.271 is not necessary. He relied on the following observations of the Court:-
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“8. The Bench of the High Court at Bombay that delivered the judgment in the case of P.M. Shah (supra) followed it in the case of CIT v. Dharamchand L. Shah [1993] 204 ITR 462. It is said, "……….. in the absence of invoking the Explanation specifically, the burden would remain on the revenue to bring the assessee's case within the mischief of the main provisions of section 271(1)(c) of the Act. 9. We find it difficult to accept as correct the two judgments aforementioned. The Explanation to section 271(1)(c) is a part of section 271. When the ITO or the AAC issues to an assessee a notice under section 271, he makes the assessee aware that the provisions thereof are to be used against him. These provisions include the Explanation. By reason of the Explanation, where the total income returned by the assessee is less than 80 per cent of the total income assessed under section 143 or 144 or 147 of the Act reduced to the extent therein provided, the assessee is deemed to have concealed the particulars of his income or furnished inaccurate particulars thereof, unless he proves that the failure to return the correct income did not arise from any fraud or neglect on his part. The assessee is, therefore, by virtue of the notice under section 271 put to notice that if he does not prove, in the circumstances stated in the Explanation, that his failure to return his correct income was not due to fraud or neglect, he shall be deemed to have conceal the particulars of his income or furnished inaccurate particulars thereof and, consequently, be liable to the penalty provided by that section. No express invocation of the Explanation to section 271 in the notice under section 271 is, in our view, necessary before the provisions of the Explanation therein are applied. The High Court at Bombay was, therefore, in error in the view that it took and the Division Bench in the impugned judgment was right.”
He also relied on the decision of the Hon’ble Madras High Court in the case of Sundaram Finance Ltd. 403 ITR 407(Mad) wherein the Hon’ble Madras High Court did not follow the ruling of Hon’ble Karnataka High Court in the case of Manjunatha Cotton & Spinning Mills Ltd. (supra). He also brought to our notice that Hon’ble Supreme Court in the case of CIT
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Vs. State Bank of Mysore in SLP (Civil) Diary No(s) 34294/2018 on 29.10.2018 has admitted SLP questioning the ratio laid down in the case of Manjunatha Cotton & Spinning Mills Ltd.(supra).
He also relied on decision of ITAT Bangalore Bench in the case of PM Abdulla ITA No.1224 &/Bang/2012 wherein it was held that striking off irrelevant portion in the show cause notice u/s.274 of the Act is a curable defect u/s.292B of the Act. This argument is irrelevant in the present case because the AO has specifically mentioned in the show cause notice u/s.274 of the Act that the charge against the assessee is furnishing inaccurate particulars of income.
The learned DR filed a written argument and the arguments set out in paragraph 6 of such note at page-6 & 7 are irrelevant for the reason that the AO has specifically mentioned in the show cause notice u/s.274 of the Act that the charge against the assessee is furnishing inaccurate particulars of income. The argument of the learned counsel for the Assessee is only non-application of mind by the AO while passing the order imposing penalty and in that context a reference was made to the fact in the show cause notice issued u/s.274 of the Act, the AO has mentioned that the Assessee is guilty of having furnished inaccurate particulars of income whereas in the order imposing penalty, the AO has given a finding that the Assessee is guilty of concealment of particulars of income.
His further submission was that on merits of the order imposing penalty, the Assessee has not given any acceptable explanation and therefore the imposition of penalty is justified in the facts and circumstances of the present case.
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The learned counsel for the Assessee in rejoinder submitted that the proceedings u/s.263 of the Act and that u/s.271(1)(c) of the Act are different. He submitted that imposition of penalty is quasi-criminal in nature and therefore it was necessary to set out the charge against the Assessee and seek his explanation. The very fact that the legislature has chosen to prescribe issue of show cause notice and procedure before imposing penalty under a specific statutory provision Sec.274 of the Act shows that the legislature intended that proceedings for imposing penalty should be treated differently from other provisions providing for opportunity of being heard. His further submission was that the decision of Hon’ble Supreme Court in the case of K.P. Madhusudan (supra) was in the context whether for applying deeming fiction in explanation to Sec.271(1) (c) of the Act, a reference should be made in the show cause notice u/s.271 of the Act. The analogy cannot be extended to the basic charge against the Assessee being specified in a show cause notice viz., whether the Assessee is guilty of “concealing particulars of income” or “furnishing inaccurate particulars of income”. In any event, he submitted that the decision of the Hon’ble Karnataka High Court in the case of Manjunatha cotton & Spinning Mills Ltd., followed by the Hon’ble Bombay High Court in the case of Shri Samson Perinchery (supra) lays down the law specifically in the context of show cause notice u/s.274 of the Act and should be considered as not running contrary to the law laid down by the Hon’ble Supreme Court in the case of K.P. Madhusudan (supra).
We have given a very careful consideration to the rival submissions. The charge against the Assessee is that it had concealed particulars of income, in respect of the two additions in respect of which penalty was imposed on the Assessee. The copy of the return of income filed by the Assessee is at page-2 of the paper book of the Assessee and the same is
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given as Annexure-1 to this order. The starting point of computation of total income by the Assessee is profit as per profit and loss account. To the same the Assessee has deducted depreciation claimed in the books of accounts. The depreciation so claimed includes Rs.2,92,94,687/- which was product development cost. The Assessee has thereafter added to the depreciation admissible under the Act and has also duly disclosed the fact that a sum or Rs.2,92,94,687/- which was claimed as depreciation in the profit and loss account is being claimed as revenue expenditure. Thus the primary facts are duly disclosed in the return of income and there cannot be any charge of concealment of particulars of income in so far as the claim for deduction of a sum of Rs.2,92,94,687/- being product development expenses.
As far as furnishing of inaccurate particulars of income is concerned, the AO has not disputed that the quantum of expenditure incurred in product development was Rs.2,92,94,687/-. The case of the AO is that it is capital expenditure. The plea of the Assessee for claiming the aforesaid expenditure as revenue expenditure was explained in an application dated 29.4.2013 u/s.154 of the Act against the order of assessment dated 14.3.2013, a copy of which is at page-47 of Assessee’s paper book. In this letter, the Assessee has brought to the notice of the AO the fact that the Assessee was in the business of producing high-tech filters in a competitive automobile sector and these filters need to be re-engineered regularly. Consequently, the filter products are re-designed, re-modeled to suit the prototype engines of the new vehicles coming in the automobile sector. Till the new filters match the technical parameters of the vehicle manufacturers, the Assessee does not get sales orders and in due course, technical obsolescence sets in. When evidence is available of obsolescence, which would have adverse impact on the Assessee’s
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operations, no further resources are put in support of these product. The Assessee as a policy writes off product development cost in the year it is incurred, where the commercial aspect of the product cannot be economically established. These costs are initially capitalized as fixed assets in the books of account but once the products developed did not show economic viability, the same is fully depreciation/impaired in the books of accounts of the Assessee as per the guidelines of Accounting Standard 28 issued by the Institute of Chartered Accountants of India. The loss being a loss in the course of business operations of the Assessee, the same is allowable as revenue expenditure. This explanation which holds good in the penalty proceedings as well, was not considered at all by the AO or the first appellate authority. The fact that the addition has been accepted by the Assessee without any further appeal cannot be held against the Assessee. The law is well settled that findings in the quantum proceedings are not conclusive in the penalty proceedings and are only relevant. The claim made by the Assessee was a plausible claim and just because the same is rejected, it cannot lead to automatic imposition of penalty. The reliance placed by the learned counsel for the Assessee on the decision of the Hon’ble supreme Court in the case of Reliance Petro Products (2010) 322 ITR 158 (SC), in our view, is acceptable in the facts and circumstances of the present case. The Hon’ble Supreme Court in the aforesaid decision held that mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income. Such claim made in the return cannot amount to inaccurate particulars. In the present case, as we have already observed, the claim is a plausible claim and therefore the ratio laid down by the Hon’ble Supreme Court will apply with greater force in the present case. We are therefore of the view that imposition of penalty in the given
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facts and circumstances of the case on addition of Rs.2,92,94,687/- cannot be sustained.
As far as imposition of penalty on the disallowance of depreciation is concerned, the first aspect which we notice is that all facts have been disclosed and there cannot be any charge of concealment of particulars of income. As far as furnishing inaccurate particulars in concerned, the depreciation claimed as per the Act is a sum of Rs.5,44,59,619/-. The chart of depreciation is at page-37 of the Assessee’s paper book and the same is given as Annexure-2 to this order. Perusal of the same shows that the Assessee has claimed depreciation at 30% on opening written down value (WDV) of Rs.3,50,53,696/- and the corresponding depreciation claimed was Rs.1,05,16,109. If 50% of this is to be disallowed, then it will be only a sum of Rs.52,58,054/- and not a sum of Rs. 59,65,312/-. The AO has disallowed depreciation even where the Assessee has claimed only 15% depreciation. This shows clear non-application of mind by the AO. The Assessee has also not pointed out this defect in the proceedings before the AO/CIT(A). Besides the above, the items of moulds and dyes on which 30% depreciation was claimed was opening WDV thereby implying that similar claim was allowed in the earlier AY. Be that as it may, the fact remains that there cannot be a charge of furnishing inaccurate particulars of income in the facts and circumstances of the present case. It is not disputed that for moulds and dyes used in plastic and rubber industries permissible depreciation is 30%. The plea of the Assessee is that it is in the business of manufacture of hi-tech plastic filters and the Moulds & Dyes purchased were for manufacturing of these plastic filters and therefore depreciation was claimed on moulds and dyes used in plastic or rubber products. This plea was not found incorrect by the revenue authorities. Again the findings in the Assessment proceedings on this
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aspect is also not conclusive. Therefore, there was no furnishing of inaccurate particulars, keeping in view the ratio laid by Hon’ble Supreme Court in the case of Reliance Petroproducts (supra).
In the given facts and circumstances of the case, we are of the view that discretion not to impose penalty ought to have been exercised. We direct that the penalty imposed be cancelled. We are not dealing with the preliminary objection of non-application of mind by the AO and consequent order imposing penalty being bad in law, as we find that in the facts and circumstances of the present case imposition of penalty is not justified. We, however, place on record our appreciation for the efforts taken by the learned DR, Dr. Pradeep Kumar, while countering the argument of the Assessee regarding the order imposing being invalid on the ground of non- application of mind by the AO.
In the result, appeal by the Assessee is allowed.
Pronounced in the open court on this 31st day of December, 2018.
Sd/- Sd/-
( INTURI RAMA RAO ) ( N.V. VASUDEVAN) Accountant Member VICE PRESIDENT
Encl: Annexure-I & II
Bangalore, Dated, the 31st December, 2018.
/ Desai Smurthy /
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Copy to:
Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file
By order
Assistant Registrar, ITAT, Bangalore.
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ANNEXURE-I
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ANNEXURE -II