TMI Blog2017 (11) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... shable on facts, as against those involved in the case of the present assessee. We thus after deliberating at length on the well reasoned order of the CIT(A), find to be in agreement with the view taken by him. - Decided against revenue. - I.T.A. No. 1800/Mum/2013 - - - Dated:- 25-9-2017 - SHRI G.S. PANNU, AM AND SHRI RAVISH SOOD, JM For The Revenue : Mrs. Vidisha Katra, D.R. For The Assessee : Shri Vipul Joshi, A.R. ORDER PER RAVISH SOOD, JUDICIAL MEMBER The present appeal filed by the revenue is directed against the order passed by the Commissioner of Income tax (Appeals)-4, Mumbai (for short CIT(A) ) , dated 06.12.2012, which in itself arises from the assessment order passed by the A.O u/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act ) , dated 18.12.2006. The revenue assailing the order of the CIT(A), had raised the following grounds of appeal before us:- On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below: 1. The order of the CIT(A) is opposed to law and facts of the case. 2. On facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome filed on 31.10.2005 claimed depreciation on the co-generation plant and mill rollers at the rate of 100%. The A.O during the course of the assessment proceedings for the year under consideration, viz. A.Y. 2004-05, vide its letter dated. 09.11.2006 called upon the assessee to furnish the details of the machinery in respect of which depreciation was claimed @100%. The A.O observed that the assessee in its reply to the aforesaid information called for by the A.O, had thus vide its letter dated 11.11.2006 filed a revised claim of depreciation and restricted its claim of deprecation in respect of the co-generation plant and mill rollers to 80% as against the claim of 100% depreciation raised in the return of income. The A.O thereafter proceeded with and concluded the assessment vide his order passed u/s 143(3) on 18.12.2006, determining the total loss of the assessee at ₹ 42,33,66,467/- and book loss at ₹ 2,17,32,056/-. 4. The A.O while passing the assessment order had initiated penalty proceedings u/s 271(1)(c) for furnishing of inaccurate particulars of income by the assessee in respect of its excess claim for depreciation on co-generation plant and mill roller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had claimed a higher rate of depreciation on the co-generation plant and mill rollers at the rate of 100%, as against the allowable rate of 80% in its return of income for AY: 2003-04, no penalty was levied by the A.O. The CIT(A) while concluding that the disallowance of depreciation in the hands of the assessee could safely be held to be a genuine mistake, relied on the judgment of the Hon ble Supreme Court in the case of CIT Vs. Reliance Petro Product Pvt. Ltd. (2010) 322 ITR 158 (SC) . The CIT(A) while exonerating the assessee from the levy of penalty u/s 271(1)(c), observed as under:- 4. I have considered the facts of the case and submissions of the assessee. The assessee claimed depreciation @ 100% on co-generation plant instead of 80% allowable to the assessee in the year under consideration. The assessee has claimed that earlier rate of depreciation was 100%, whereas, it is reduced to 80% from A.Y. 03-04, but it lost sight off at the time of filing of return and, therefore by mistake a claim of 100% was made. Whereas, A.O. has held that even after passing of one year a wrong claim by the assessee cannot be treated a mere mistake and even the claim has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o-operative Sugar Mills 129 TTJ 92, as claimed by the assessee. Therefore, respectfully following the above mentioned two decisions the penalty is deleted. In result, the ground of appeal is allowed. 6. The revenue being aggrieved with the order of the CIT(A) had carried the matter in appeal before us. The ld. Departmental Representative (for short D.R. ) submitted that the assessee in the course of the assessment proceedings for the immediately preceding year, viz. AY: 2003-04, had acknowledged its mistake of claiming the depreciation on the co-generation plant at the rate of 100% as against the allowable rate of 80%. The ld. D.R submitted that the assessee during the course of the assessment proceedings for A.Y. 2003-04, had vide its letter dated 22.03.2006 filed with the A.O, revised its claim of depreciation in respect of the co-generation plant and thus restricted the same to 80% as against that raised in the return of income at the rate of 100%. In the backdrop of the aforesaid facts, it was submitted by the ld. D.R that unlike the preceding year, viz. AY: 2003-04, the assessee despite being aware of the fact that it had filed a wrong claim of depreciation in its r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010) 322 ITR 158 (SC) . The ld. A.R in order to drive home his aforesaid contention that in the backdrop of the facts involved it was not exigible to levy of penalty u/s. 271(1)(c), relied on a host of judicial pronouncements, as under: (i) Price Waterhouse Cooper (P) Ltd. Vs. CIT-(2012) 348 ITR 306 (SC) (ii) DIT Vs. Asia Attractive Dividend Stock Fund (2013) 35 taxmann.com 265 (Bom). (iii) CIT Vs. Somany Evergreen Knits Ltd. (2013) 352 ITR 592 (Bom) (iv) CIT Vs. Shri Hiralal Doshi (2016) 383 ITR 19 (Bom). (v) CIT Vs. Stoll India (P.) Ltd. (2013) 35 taxmann.com 263 (Bom). (vi) CIT Vs. Brahmaputra Consortium Ltd. (2012) 348 ITR 339 (Del). (vii) CIT Vs. Royale Manor Hotels Ind. Ltd. (2014) 41 taxmann.com 491 (viii) DCIT Vs. Khanna Industrial Pipes (P.) Ltd. (2014) 35 ITR (T) 314 (Mum) (ix) ACIT Vs. Raj Multiplex (P.) Ltd. (2010) 6 ITR (T) 76 (Ahd.) (x) DCIT Vs. Shahabad Co-Op. Sugar Mills (2010) 129 TTJ 92 (Chandigarh- Trib.) (xi) DCIT Vs. Apollo Hospitals Enterprise Ltd. (2013) 23 ITR (T) 49 (Chennai- tribunal) (xii) Simran Singh Gambhir Vs. DCIT (2015) 42 ITR (T) 624 (Del-Trib.) Alternatively, it was submitted by the ld. A.R that as the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter of fact that up to AY: 2002-03 the depreciation on co-generation plant was allowable at the rate of 100%. However, with effect from A.Y: 2003-04 the rate of depreciation was scaled down by the legislature in all its wisdom to 80%. It remains as a matter of fact that the assessee while filing its return of income for the immediately preceding year, viz. AY: 2003-04 had in the said year also wrongly claimed depreciation on the cogeneration plant at the rate of 100%, as against the allowable rate of 80%. That it was only during the course of the assessment proceedings for A.Y. 2003-04, when the assessee was confronted by the A.O as regards the excessive claim of depreciation raised by it in the return of income, that it had vide its letter dated 22.03.2006 revised its claim and restricted the claim of depreciation on the co-generation plant to 80%. We find that the A.O while framing the assessment in the hands of the assessee for AY: 2003-04 had not initiated penalty proceedings u/s 271(1)(c) in respect of the wrong claim of depreciation that was raised by the assessee at the rate of 100%, as against the allowable rate of 80%. The aforesaid fact stands substantiated from a perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the assessee had learnt about its mistake of having wrongly claimed depreciation at an excessive rate for A.Y 2003-04, then it should have been extra vigilant and should have without waste of any further time came forth with a revision of such a claim, which too was wrongly raised at an excessive rate of 100% during the year under consideration, i.e AY: 2004-05. Be that as it may, we are of the considered view that it remains as a matter of fact that the assessee had furnished the complete details in respect of the cogeneration plant on which the depreciation was claimed by it at the rate of 100%, as against the allowable rate of 80%. We are of the considered view that in the backdrop of the fact that in the past the depreciation at the rate of 100% was allowed on the co-generation plant, therefore, it can safely be concluded that the assessee on account of a bonafide mistake had claimed the depreciation as per the pre-amended rate in the succeeding years, viz. AY: 2003-04 and AY: 2004-05. We are unable to persuade ourselves to accept the contention of the ld. D.R that merely because the depreciation at an excessive rate was claimed by the assessee in its return of income, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f penalty under Sec. 271(1)(c) can safely be held to be covered by the judgment of the Hon ble High court of Bombay in the case of CIT Vs. Somany Evergreen Knits Ltd. (2013) 352 ITR 592 (Bom). 9. We have given a thoughtful consideration to the facts of the case and deliberated on the contentions of the authorized representatives for both the parties. We are of the considered view that in the backdrop of our observations recorded hereinabove, the claim of depreciation on cogeneration plant raised by the assessee at the rate of 100% as against the rate of 80% to which it was entitled during the year under consideration can safely be characterized as a bonafide mistake on its part, as result whereof, it would not be exigible to levy of penalty u/s 271(1)(c). Before parting, we may herein observe that the reliance placed by the ld. D.R. on the judgments of the Hon ble High Court of Delhi in case of Zoom Communications Ltd. (Supra) and Escorts Finance Ltd.(supra) are distinguishable on facts. We find that unlike the facts involved in the case of the present assessee before us, in the aforesaid cases the penalty imposed by the A.O under Sec. 271(1)(c) was upheld by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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