DCIT, CHENNAI vs. REDINGTON INDIA LTD., CHENNAI

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

This appeal of the Revenue is directed against the order of

the Commissioner of Income Tax (Appeals) – 3, Chennai, dated

09.09.2015 and pertains to assessment year 2006-07, deleting the

penalty levied by the Assessing Officer under Section 271(1)(c) of

the Income-tax Act, 1961 (in short 'the Act').

2 I.T.A. No.2219/Mds/15

submitted that the assessee claimed depreciation at the rate of

100% on the so-called temporary structures. The Assessing

Officer, however, disallowed the claim of the assessee. The

assessee has also paid royalty to M/s Microsoft Corporation Inc.

without deducting tax. Besides, the assessee has paid consultancy

charges. The Assessing Officer levied penalty in respect of the

claim of depreciation and non-deduction of tax on the ground that

the assessee has filed inaccurate particulars of income. However,

the CIT(Appeals) deleted the penalty on the ground that this

Tribunal allowed the claim of the assessee as revenue expenditure

in respect of temporary structures. With regard to payment made to

M/s Microsoft Corporation Inc., according to the Ld. D.R., the matter

was remitted back to the file of the Assessing Officer. According to

the Ld. D.R., when the temporary structure is not eligible for 100%

depreciation, the claim of the assessee is not bonafide, therefore,

the assessee has furnished inaccurate particulars. Hence,

according to the Ld. D.R., the CIT(Appeals) ought not to have

deleted the penalty levied by the Assessing Officer under Section

271(1)(c) of the Act.

3 I.T.A. No.2219/Mds/15

the assessee also. The assessee’s claim of 100% depreciation on

the temporary structure was examined by this Tribunal in the

subsequent assessment year, namely, assessment year 2007-08

and this Tribunal found on identical set of facts that the expenditure

has to be allowed as revenue expenditure. The assessee

apparently treated the expenditure on temporary structures as

capital and claimed 100% depreciation. Whether a particular

expenditure is revenue in nature or capital in nature would depend

upon the facts of each case and there can be difference of opinion

depending upon the individual is concerned. When the assessee

felt that the expenditure on the temporary structures is capital in

nature and claimed 100% depreciation for the year under

consideration, this Tribunal is of the considered opinion that it

cannot be construed as furnishing inaccurate particulars of income

or concealment of part of its income. Furthermore, with regard to

non-deduction of tax on the payment made to M/s Miscrosoft

Corporation Inc., as rightly submitted by the Ld. D.R., the matter

was remitted back to the file of the Assessing Officer for

reconsideration. In view of these factual aspects, this Tribunal is of

4 I.T.A. No.2219/Mds/15

the considered opinion that the CIT(Appeals) has rightly deleted the penalty levied by the Assessing Officer Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

Order pronounced on 15th September, 2016 at Chennai.

sd/- sd/- (�ड.एस. सु�दर �संह) (एन.आर.एस. गणेशन) (D.S. Sunder Singh) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member

चे�नई/Chennai, �दनांक/Dated, the 15th September, 2016.

Kri.

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A)-3, Chennai 4. Principal CIT, Chennai-5, Chennai 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.