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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
स्थधमी रेखध सं./जीआइआय सं./PAN :AABCV0359B अऩीरधथी ओय से / Appellant by None प्रत्मथी की ओय से/Rspondent by Shri Chandip Singh सुनवधई की तधयीख / Date of Hearing : 15.10.2015 घोषणध की तधयीख /Date of Pronouncement : 15.10.2015 आदेश / O R D E R PER B.R. BASKARAN (AM) Both the appeals filed by the assessee are directed against the two separate orders passed by Ld CIT(A)-9, Mumbai and they relate to the assessment year 2001-02.
The appeal No.6183/Mum/2012 relates to the penalty levied under section 271(1)(c) of the Income Tax Act, 1961 and other appeal relates to the quantum assessment proceedings. None appeared on behalf of the assessee even though the notices were sent to the assessee by RPAD on earlier three occasions. Hence, we proceed to dispose of the appeal ex- parte, without the presence of the assessee.
We shall take up the quantum appeal filed by the assessee first.
3.1 We heard the ld. DR and perused the record. The assessment in the hands of the assessee for the year under consideration was completed u/s 143(3) of the Act on 31.7.2003 accepting the returned loss of Rs.7.04 lakhs. Subsequently, the ld. CIT(A) initiated revision proceedings u/s 263 of the Act and passed the order with a direction to the AO to verify the depreciation claim of Rs.2.54 lakhs made by the assessee on factory building and plant and machinery. The assessee had declared job work charges of Rs.1.75 lakhs and had claimed depreciation on the assets. However, before the AO, the assessee changed the stand and submitted that his factory was let out to M/s Ranisati Weaving Works. Since the assessee could not prove the claim of leasing out of the factory premises by producing any document, the AO disbelieved the claim of leasing out of the factory building. Hence the AO assessed the sum of Rs.1.75 lakhs, referred above, as unexplained cash credit u/s 68 of the Act. Accordingly, the AO disallowed the depreciation of Rs.2.54 lakhs claimed by the assessee. The AO also levied penalty u/s 271(1)(c) of the Act on the false claim of depreciation on the ground that the assessee has furnished inaccurate particulars of income.
The assessee filed appeals challenging the quantum assessment order as well as penalty order. However, in the appellate proceedings, the assessee did not appear before the ld.CIT(A) and hence the first appellate authority confirmed the disallowance of depreciation as well as penalty. Aggrieved, the assessee has filed this appeal before us.
With regard to the claim of receipt of Rs.1.75 lakhs, we notice that the assessee had initially declared the same as job work charges received by it. Subsequently, it changed the stand and submitted that the same represents rental income. However, the assessee did not furnish any document to show that its factory building and plant & machinery had been leased out. Hence, the AO was constrained to assess the sum of Rs.1.75 lakhs as unexplained cash credit. Consequently, the AO has disallowed the depreciation claim of Rs.2.54 lakhs, since the same is not allowable as deduction u/s 68 of the Act. Before the ld. CIT(A) as well as before us, the assessee did not furnish any material to contradict the findings given by the AO. Hence, we do not find any infirmity in the order of ld.CIT(A) in confirming the disallowance of depreciation amount.
With regard to the penalty levied on disallowance of depreciation, we notice that the assessee had claimed depreciation with wrong declaration that income of Rs.1.75 lakhs represents job work charges. Though the assessee has changed its stand at time of assessment proceedings with regard to the nature of receipt of Rs.1.75 lakhs, yet it could not prove that the same represents rental income. Thus, the assessee has claimed depreciation by furnishing inaccurate particulars of income. Hence, we are of the view that the Ld CIT(A) was justified in confirming the penalty levied u/s 271(1)(c) of the Act.
In the result, both the appeals filed by the assessee are dismissed.
Pronounced accordingly in the open court on 15th Oct, 2015. घोषणध खुरे न्मधमधरम भें ददनधंकः 15th Oct, 2015 को की गई । Sd sd (RAMLAL NEGI) ( B.R. BASKARAN) न्याययक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER भुंफई Mumbai: 15th Oct, 2015.