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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH AHMEDABAD
Before: SHRI PRAMOD KUMAR, & SHRI S. S. GODARA.
PER S. S. GODARA, JUDICIAL MEMBER
This assessee’s appeal for assessment year 2010-11 arises against the CIT(A)-I, Baroda’s order dated 22.04.2014, in case no. CAB-I/026/2013-14, confirming Assessing Officer’s action imposing penalty of Rs.12,94,000/-, in proceedings u/s. 271(1)(c) of the Income Tax Act, 1961; in short “the Act”. Heard both sides. Case file perused.
We advert to the relevant facts now. This assessee is a company manufacturing and trading in gold, silver and diamond ornaments/articles. It filed its return of income on 26.08.2010 declaring total income of Rs.2,63,83,980/-. The
ITA No. 1665/Ahd/14 (Gandevikar Jewellers Pvt. Ltd. vs. DCIT) A.Y. 2010-11 - 2 -
Assessing Officer thereafter took up scrutiny assessment on 08.06.2012 assessing assessee’s income as Rs.2,73,23,060/- including depreciation disallowance of Rs.38,87,603/- regarding valuation of closing stock pertaining the preceding assessment year 2009-10 to be taken as opening stock of the impugned assessment year for computing consequential profits. He further initiated the impugned penalty proceedings u/s. 271(1)(c) of the Act. The assessee does not seem to have preferred any appeal against the same. Quantum proceedings attained finality accordingly.
We now come to the impugned penalty proceedings. The Assessing Officer sought for the instant tax payer’s response regarding the above quantum addition. The assessee filed its reply on 26.06.2012 inter alia submitting therein that it had mistakenly interchanged written down value of various blocks of assets resulting in the abovestated quantum disallowance of depreciation amounting to Rs. 38,87,603/-. It therefore clarified that the same was not either an act of concealment or furnishing inaccurate particulars thereof. The Assessing Officer did not agree. He observed in the assessment order that the assessee had although filed the requisite particular pertaining to written down value of assets in the course of scrutiny but same were not sufficient to discharge it from consequential penalty as there was no revised return filed u/s.139(5) of the Act. He was therefore of the view that the assessee’s above alleged conduct in submitting wrong particulars of block of assets/WDV amounted to both concealment as well as furnishing of inaccurate particulars of income. The Assessing Officer therefore imposed the impugned penalty of Rs.12,94,000/- in his order dated 28.03.2013.
The CIT(A) confirms the Assessing Officer’s action. This leaves the assessee aggrieved.
We have given our thoughtful consideration to rival submissions. Case file perused. There can hardly be any dispute about the certain legal proposition in view of hon’ble apex court’s landmark decision CIT vs. Reliance Petroproducts
ITA No. 1665/Ahd/14 (Gandevikar Jewellers Pvt. Ltd. vs. DCIT) A.Y. 2010-11 - 3 -
322 ITR 158 (SC) that quantum and penalty proceedings are parallel wherein each and every disallowance/addition made in the course of former does not ipso facto attract latter penalty provision. We keep in mind the said fine distinction to deal with the relevant facts in the instant case. The assessee’s case throughout has been that it had inadvertently interchanged relevant written down value of the corresponding block of assets. We sought further clarification in this regard from the case file. Learned counsel took us to page 13 of the CIT(A). The assessee had pleaded before the CIT(A) that the opening written down value of furniture @ 10% as prescribed was mistakenly taken as corresponding rate @ 60% in case of computer’s block. His case therefore is that all this resulted in excess depreciation claim being raised for depreciation purpose. It is not in dispute that the assessee admitted its arithmetic mistakes during the course of scrutiny itself. Learned Departmental Representative fails to rebut this crucial fact. His only plea is that the assessee has not filed its revised return of income. We find no merit in the instant plea as the fact remains that it was purely a case of computation error which stood corrected at assessee’s behest itself. We therefore accept assessee’s arguments assailing correctness of the impugned penalty amounting to Rs.12.94lacs. The same stands deleted.
This assessee’s appeal is accordingly allowed.
[Pronounced in the open Court on this the 26th day of September, 2017.]
Sd/- Sd/- (PRAMOD KUMAR) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 26/09/2017 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT
ITA No. 1665/Ahd/14 (Gandevikar Jewellers Pvt. Ltd. vs. DCIT) A.Y. 2010-11 - 4 -
आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।