DCIT 8(1), MUMBAI vs. EURO PRATIK ISPAT P. LTD, MUMBAI

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ITA 4885/MUM/2014Status: DisposedITAT Mumbai16 August 2016AY 2006-073 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal affirmed the order of the CIT(A) deleting the penalty. This was because the Tribunal in the quantum appeal had already decided the issue of additional depreciation in favour of the assessee.

What were the facts?

The revenue appealed against the deletion of penalty by the CIT(A) for AY 2006-07. The penalty was levied on the claim of additional depreciation on plant and machinery.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the primary disallowance leading to the penalty has been deleted by the Tribunal in quantum proceedings. Whether additional depreciation was allowable on machinery acquired before March 31, 2005, but put to use in the relevant financial year.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 32(1)(iia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI

Before: SHRI AMIT SHUKLA & SHRI RAMIT KOCHAR

For Appellant: Shri Prakash Pathade

आदेश ORDER �ी अिमत शु�ला, �या स: PER AMIT SHUKLA, JM:

1.

The aforesaid appeal has been filed by the revenue against impugned order dated 23.05.2014, passed by Ld. CIT(Appeals) -16, Mumbai, in relation to the penalty proceedings under section 271(1)(c), for the assessment year 2006-07.

2.

None appeared on behalf of the assessee.

At the outset, the Ld. DR admitted that, the Ld. CIT(A) has deleted the penalty on the ground that the Tribunal in the quantum proceedings had allowed the assessee’s appeal and, therefore, penalty on same disallowance will not sustain.

2 यूरो �तीक इ�पात �ाइवेट �ल�मटेड M/s Euro Pratik Ispat Private Limited ITA 4885/Mum/2014 3. After considering the aforesaid fact which is culled out from the impugned order, we find that penalty has been levied on the claim of “additional depreciation” of Rs.1,27,23,266/- on the plant and machinery, which as per the AO has been acquired before 31st March, 2005 though not put to use and the provision of section 32(1)(iia) relating to additional depreciation is allowable only in cases where new machinery are installed after 31st March, 2005. Assessee’s case was that though the machineries were shown as capital-work-in-progress as on 31.03.2005, but were put to use in this financial year and hence was included in the block of assets in the previous year, relevant to the assessment year 2006-07.

4.

The Ld. CIT(A) in para 2.3 of the impugned order has noted that, now in the quantum appeal, the Tribunal vide order dated 02.04.2014 in for the assessment year 2006-07 has held that, the assessee was entitled to claim additional deprecation @ 10%. In wake of the aforesaid fact that the issue of additional depreciation has been decided in favour of the assessee by the Tribunal in the quantum proceedings, we hold that the penalty levied on such a disallowance has no legs to stand, therefore, the order of the Ld. CIT(A) is affirmed and grounds raised by the revenue stands dismissed.

5.

In the result, appeal of the revenue stands dismissed. Order pronounced in the open court on 16th August, 2016 Sd/- Sd/- (रिमत कोचर) (अिमत शु�ला) लेखा सद�य �याईक सद�य (RAMIT KOCHAR) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date: 16th August, 2016

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