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Brijbasi Art Press Ltd. Versus ACIT, Circle – 3 (1) , New Delhi

2016 (7) TMI 2 - ITAT DELHI

Penalty u/s 271(1)(c) - depreciation on the entire cost of factory building and land sold - admission of the additional evidences - Held that:- In the present case, it appears that the assessee was claiming depreciation on the entire cost of factory building and land at Sivakashi, Tamilnadu. Later on when the factory was sold, its value was reduced from the block of fixed assets and no long term capital gain was shown on the land. The assessee furnished additional evidences by way of computation .....

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vidence furnished by the assessee first time before the ITAT and by providing due & reasonable opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. - ITA No. 5939/Del./2013 - Dated:- 29-4-2016 - Sh. N. K. Saini, AM AND Sh. Kuldip Singh, JM For The Appellant : Sh. Satyam Seth, Adv. & A.J.Panda, Adv. For The Respondent : Sh. K.K.Jaiswal, DR ORDER PER N.K. SAINI, A.M. This is an appeal by the Assessee against the order dated 11/09/2013 of the Ld. .....

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- by making the various additions on account of long term capital gain interest on FBT and depreciation on computer peripheral. The AO also initiated the penalty proceedings u/s 271(1)(c) of the Act. 3. The submissions of the assessee before the AO were as under : The assessee under the bona fide belief deducted the whole amount of consideration from the block. As soon as the assessee came to know, it offered the long term capital gain on the value of land to be included in its income. Nothing h .....

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of CIT vs. Reliance Petro Products Pvt. Ltd. reported at (2010) 322 ITR 158. The AO however, did not find any merit in the submissions of the assessee and considered ₹ 17,64,915/- added by the AO on account of long term capital gain as concealed income and accordingly penalty of ₹ 5,99,895/- was levied u/s 271(1)(c) of the Act. 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the assessee was claiming depreciation on the total cost of the facto .....

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lock as the value of the factory was included in the block of factory building and the profit earned on the sale of factory building was shown as income under the head Other Income . It was further submitted that during the course of regular assessment, the assessee segregated the cost of land and building on the basis of formula adopted by the AO and offered the capital gain tax, on the value of land accordingly the AO made the addition of ₹ 17,69,915/- on account of long term capital gai .....

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come, Profit & Loss Account and Balance Sheet. Therefore, nothing had been concealed nor inaccurate particulars were furnished in the return of income and the mistake was an inadvertent one not with the motive to defraud the Revenue. The assessee also pointed out mistake in calculation of the tax and the penalty. 5. The ld. CIT, however, did not find merit in the submissions of the assessee and sustained the penalty levied by the AO. Now the assessee is in appeal and had furnished an applica .....

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as its factories at (i) A-81, Sector-5, Noida, UP, (ii) Greater Noida, UP and (iii) Shivakasi, Tamilnadu. During the year, the Appellant had sold its factory building and the land at Shivakasi, Tamilnadu for a consideration of ₹ 46,00,000/-. The Appellant had purchased this property In the assessment year 1994- 95 for ₹ 9,25,055/-. 3. For the assessment year 2009-10, return declaring income of ₹ 1,31,77,350/- was filed on 30.9.2009, which was computed as under: Net profit as pe .....

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0/- was reduced from the block of fixed assets (building). 5.The assessment u/s 143(3) was made at an income of ₹ 1,49,70,219/-. In computing the income, the profit on sale of factory at Shivakasi was assessed as long term capital gain, which was computed at ₹ 17,64,915/-. 6. The Assessing Officer levied penalty of ₹ 5,99,895/- u/s 271(l)(c), for the reason that the capital gain was not shown in the return and only after the query, the same was offered to tax under the head  .....

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t the Appellant did not show capital gain on sale of the factory including the land situated at Shivakasi is to be seen in the context of the fact that the Appellant had reduced the entire sale consideration of ₹ 46,00,000/- from the WDV of block of assets. Non declaration of capital gain is not to be seen in-isolation. It is submitted that though the non declaration of capital gain on sale of factory building with land was incorrect but the question is whether the conduct of the Appellant .....

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f income for assessment year 2010-11 to 2014-15 with balance sheets and the assessment orders for the respective years are being filed at pages 10 to 63 of the paper book. . The assessment orders for assessment years 2010-11, 2011-12 and 2012-13 would show that the Appellant has forgone the depreciation in the later years. 10. That the position that emerges is that by reducing the block of asset of factory building by the amount of sale consideration of ₹ 46,00,000/- , the Appellant increa .....

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hat the Appellant on account of wrong claim in past has suffered from all sides. In the assessment years earlier to the sale of factory building i.e. 2003-04 to 2008-09 depreciation was not allowed on the entire cost and year of sale i.e. 2009-10, capital gain was charged on the sale of factory and in the years subsequent to sale of factory i.e. 2010-11 to 2014-15, depreciation was claimed and allowed on the reduced WDV. 12. Appellant submits that though it made a wrong claim but the complete pa .....

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s are vital to decide the issue of levy of penalty u/s 271(l)(c) of the Act. The evidence being filed is on the record of the Assessing Officer but for the later assessment years. Admission of additional evidence would not cause any prejudice to the department, rather, it would advance the cause of justice. In view of the above, it is submitted that in the interest of justice and to enable this Hon'ble Tribunal to arrive at a just decision, the additional evidence may be admitted and be adju .....

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