Income Tax Appellate Tribunal - Ahmedabad
The Ito, Ward-4(1),, Ahmedabad vs Gmd Services India Pvt. Ltd.,, ... on 3 April, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "D" BENCH
(BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
& SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER)
ITA. No: 2764/AHD/2013
(Assessment Year: 2009-10)
The Income-tax Officer, V/S GMD Services India Pvt.
Ward-4(1), Ahmedabad Ltd. 212 to 214, Platinum
Plaza, Judges Bunglow
Road, Bodakdev,
Ahmedabad
(Appellant) (Respondent)
PAN: AACCG5969K
Appellant by : Shri Antony Pariath, Sr. D.R.
Respondent by : None
(आदे श)/ORDER
Date of hearing : 24 -03-2017
Date of Pronouncement : 03-04-2017
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
1. This appeal by the Revenue is preferred against the order of the Ld. CIT(A)- VIII, Ahmedabad dated 14.08.2013 pertaining to A.Y. 2009-10.
2 ITA No. 2764/Ahd/2013. A.Y. 2009-10
2. The only grievance of the revenue is that the ld. CIT(A) erred in deleting the penalty of Rs. 10.85 lacs levied u/s. 271(1)(c) of the Act.
3. The roots for the levy of penalty lie in the assessment order dated 30.09.2011 framed u/s. 143(3) of the Act.
4. During the course of the scrutiny assessment proceedings and on verification of the details filed in respect of claim of depreciation. The A.O. noticed that the assessee had sold an existing office building for an amount of Rs. 60 lacs, the WDV of which was Rs. 24,46,405/-. The A.O. further noticed that the assessee has purchased another office building for an amount of Rs. 52.90 lacs. The A.O. found that after reducing the sale value of Rs. 60 lacs on block of assets. The assessee has claimed depreciation accordingly. The A.O. was of the opinion that the old property was never part of the new assets purchased during the year on which depreciation has been claimed. The A.O. issued a show cause notice to the assessee to explain why an amount of Rs. 26,47,592/- should not be treated as profit on sale of assets.
5. The assessee contended that the profit on sale of office will not be included in income as it forms block of assets as during the year, the assessee has purchased one office and disposed the previous office for Rs. 60 lacs.
6. The A.O. did not accept this submission of the assessee. The A.O. was of the firm belief that no depreciation is allowable on any assets which is sold 3 ITA No. 2764/Ahd/2013 . A.Y. 2009-10 during the previous year. The A.O. opined that the new asset purchased by the assessee was never part of the assets already sold by the assessee. Therefore, the assessee was not entitled to claim depreciation on the assets sold. The A.O. accordingly work out the profit u/s. 41(2) of the Act and added the same to the total income of the assessee.
7. Penal proceedings were simultaneously initiated by the A.O. for furnishing inaccurate particulars of income. In the penal proceedings, the assessee reiterated what has been stated during the course of the assessment proceeding, the A.O. was not convinced and proceeded by levying a penalty of Rs. 10.85 lacs.
8. Assessee carried the matter before the ld . CIT(A) and vehemently objected the levy of penalty. It was strongly contended that assessee was under a bona fide belief that depreciation is allowable on the block of assets. After considering the facts and the submissions, the ld. CIT(A) was of the opinion that there is no furnishing inaccurate particulars. The claim of the assessee was made under a bona fide belief which has not been accepted by the A.O. The ld. CIT(A) directed the A.O. to delete the penalty so levied drawing support from the decision of the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. 322 ITR 158.
9. Aggrieved by this, the revenue is before us. The ld. D.R. relied upon the findings of the A.O. 4 ITA No. 2764/Ahd/2013 . A.Y. 2009-10
10.None appeared on behalf of the assessee in spite of notice; therefore, we decided to proceed ex parte.
11. Having heard the contention of the ld. D.R., we have carefully perused the orders of the authorities below. We have also gone through the relevant assessment order.
12.There is no dispute that during the year, the assessee has sold old office building and has purchased another office building. Under the concept of block of assets, the assessee has claimed depreciation on the bloc of assets as per the procedure given in the relevant provisions of the Act. It appears that the claim of depreciation was under a bona fide belief and all the details were furnished along with the return of income. Therefore, in our considered opinion, there is no case of furnishing any inaccurate particulars of income. Reliance on the decision of the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. (supra) is well founded. We, therefore, decline to interfere.
13.Appeal filed by the Revenue is dismissed.
Order pronounced in Open Court on 03 - 04- 2017
Sd/- Sd/-
(RAJPAL YADAV) (N. K. BILLAIYA)
JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER
Ahmedabad: Dated 03 /04/2017
Rajesh