Arvindbhai Dhanjibhai Chokshi, ... vs Assessee
- CitationITA No. 2233/Ahd/2011
Ratio decidendi
The rule this decision rests on
The Tribunal's reasoning rests on the following principles: Where a penalty under section 271(1)(c) of the Income-tax Act is levied on a disallowance of depreciation on the ground that the assessee was not the owner of the asset for the full year, the question of ownership of a movable asset turns on delivery of possession, not on the date of payment or the date of transfer of registration in the registration certificate book; an assessee who receives delivery of a movable asset becomes its owner from that date irrespective of when the price is paid. Where the assessee has furnished documentary evidence of delivery, and the Revenue brings no material to show that the document is false or incorrect, the claim cannot be treated as inaccurate or concealed, and a penalty for concealment of income in respect of the disallowed depreciation is not sustainable.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
ी एन0एस0 सैनी, लेखा सद य एवं ी कुल भारत, या%यक सद य के सम& BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 2233/Ahd/2011 %नधा)रण वष)/Assessment Year: 2002-2003
Shri Arvindbhai Dhanjibhai Chokshi ITO, Ward-(1) Prop: of Arvindkumar & Co. Vs Ahmedabad. 408/5, Arvind House C.G. Road, Ahmedabad.
PAN : AEIPC 5464 Q
अपीलाथ,/ (Appellant) -.यथ,/ (Respondent)
Assessee(s) by : None Revenue by : Shri M.K. Singh, SR.DR
सन ु वाई क तार ख/ Dateof Hearing : 26/03/2015 घोषणा क तार ख / Date of Pronouncement: 10/04/2015
आदे श/O R D E R
PER N.S. SAINI, ACCOUNTANT MEMBER: This is an appeal filed by
the assessee against the order of the Commissioner of Income-Tax-VI, Ahmedabad dated 16.6.2011.
2. The sole ground of appeal taken by the assessee is that the CIT(A) erred in confirming the levy penalty under section 271(1)(c) of the Act on disallowance of claim of depreciation on Mercedes car.
3. When the case was called for hearing, none was present on behalf of the assessee-appellant and neither any adjournment application was filed. Notice of hearing was served on the assessee as evidenced by acknowledgement card of the post office placed on record, evidencing the fact that the notice of hearing was served on the assessee on ITA No.2233/Ahd/2011 2
3.3.2015. The Bench of the view that the appeal of the assessee can be disposed of, in the absence of the assessee, by considering the evidence on record, and submission of the DR. Therefore, the appeal was heard ex parte qua the assessee-appellant, and disposed of after hearing of the DR and considering material available on record.
4. We have heard the DR and perused the materials available on record. In the instant case, the penalty under section 271(1)(c) of the Act was levied by the AO in respect of disallowance of depreciation of Rs.1,29,500/- on Mercedes car, because the payment in respect of the said car was made on 8.1.2002. According to the AO, though the assessee has allegedly received delivery of car on 21.9.2001, but since the payment was made on 8.1.2002, the assessee can be deemed as owner of the car from 8.1.2002 only, and therefore, was eligible for 50% depreciation only.
5. According to the CIT(A), it was unbelievable situation and at the best it only showed that the car was delivered but without paying for the same it could not be said that the assessee was its owner from that date. Therefore, the AO levied penalty under section 271(1)(c) of the Act in respect of the said amount of Rs.1,29,500/-.
6. On appeal, the CIT(A) confirmed the levy of penalty on the ground that in the quantum appeal, the Tribunal held that the assessee claimed depreciation for the full year on motor car which was owned by him for less than six months. Therefore, the CIT(A) held that the claim made by the assessee could not be substantiated, and therefore, the penalty for concealment was clearly leviable by virtue of Explanation 1 to section 271(1)(c) of the Act.
7. We find from the assessment order that the assessee had furnished copy of delivery note issued by Satyanarayan J. Jadia in support of its claim of receiving delivery of Mercedes car on 21.9.2001, ITA No.2233/Ahd/2011 3
and on inquiry made by the AO under section 133(6), the seller has also confirmed to the AO of making delivery of car in September, 2001. The car being movable property, the assessee becomes owner thereof on receipt of delivery of the same irrespective of the date of payment and date of transfer of registration in the R.C. book. We find that no material could be brought on record by the Revenue to show that the delivery note furnished by the assessee was false or incorrect. In these circumstances, the penalty under section 271(1)(c) of the Act in respect of disallowance of depreciation of Rs.1,29,500/- is unsustainable. We, therefore, delete the penalty levied under section 271(1)(c) of the Act and allow this ground of appeal.
8. In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on Friday, the 10th April, 2015 at Ahmedabad.
Sd/- Sd/-
(KUL BHARAT) ( N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 10 /04/2015
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free