Shiv Vilas Rsorts P Ltd., Jaipur vs Department Of Income Tax

Jh vkj-ih-rksykuh] U;kf;d lnL; ,oa Jh Vh-vkj-ehuk] ys[kk lnL; ds le{k BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM

vk;dj vihy la-@ITA No. 746/JP/2012 fu/kZkj.k o"kZ@Assessment Year : 2008-09

A.C.I.T. cuke M/s Shiv Vilas Resorts Pvt. Ltd. Circle-5, Jaipur. Vs. Near G.Ramchandran Petrol Pump, N.H. 8, Kukas, Jaipur.

LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAGCS 5817 G vihykFkhZ@Appellant izR;FkhZ@Respondent

jktLo dh vksj ls@ Revenue by : Shri Kailash Mangal (JCIT) fu/kZkfjrh dh vksj ls@ Assessee by : Shri H.M. Singhvi (C.A.)

lquokbZ dh rkjh[k@ Date of Hearing : 16/03/2015 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/04/2015

vkns'k@ ORDER

PER: T.R. MEENA, A.M.

This is an appeal filed by the revenue against the order dated

15/06/2012 passed by the learned CIT(A)-II, Jaipur for A.Y. 2008-09.

The sole ground of appeal is as under:-

"(i) Deleting penalty of Rs. 20,51,508/-imposed by the A.O. U/s 271(1)(c) of the I.T. Act, 1961 without appreciating the fact that the assessee has deliberately claimed wrong depreciation at higher

2 ITA 746/JP/2012_ ACIT Vs. Shiv Bilas Resorts

rate not only in the year under consideration but in the last year also."

2. The sole ground of appeal is against deleting the penalty of Rs.

20,51,508/- imposed by the A.O. U/s 271(1)(c) of the Income Tax Act,

1961 (in short the Act). The Ld. Assessing Officer observed that the

assessee is running a Luxurious Hotel. In this case, scrutiny U/s 143(3)

of the Act was made by the Assessing Officer. The assessee filed its

return showing NIL income on 29/09/2008 electronically and submitted

the acknowledgement of the same to this office on 31/09/2008. During

the course of assessment proceedings, it was noticed that the assessee

had charged depreciation of Rs. 22,27,310/- and Rs. 3,96,26,581/- for

crockery & cutlery and Blanket, Linen & dresses respectively @ 100%

and Rs. 34.21 lacs on furnishing and decoration @ 80%. The assessee

was asked to explain the admissibility of above depreciation as per the

Act. In response thereof, the AR of the assessee vide its letter dated

28/12/2010 has replied, which has been reproduced at page No. 2 of

the assessment order. After considering the assessee's reply he held

that the explanation offered by the assessee is not satisfactory and it is

established that the assessee has furnished inaccurate particulars of

income by charging depreciation at higher rates by Rs. 66,39,183/- and

therefore, he imposed a penalty of Rs. 20,51,508/-.

3 ITA 746/JP/2012_ ACIT Vs. Shiv Bilas Resorts

3. Being aggrieved by the order of the Assessing Officer, the

assessee carried the matter before the learned CIT(A), who had deleted

the penalty by observing that the assessee company had claimed

depreciation @ 100% on the crockery, cutlery, blankets, linen and

dresses and @ 10% on furnishings and decorations. The depreciation

on the identical rates had been allowed to the assessee in the

assessment proceedings for A.Y. 2007-08. However, in the year under

consideration, the A.O. confronted the assessee as to why the

depreciation had been claimed @ 100% and @ 80% on various items.

In compliance thereof, just to avoid litigation, the assessee company

revised its claim of depreciation to 15% on the crockery, cutlery,

blankets, linen and dresses and @ 10% on furnishing and decorations.

It is seen that the assessee had disclosed all material facts pertaining to

the claim of depreciation admissible U/s 32 of the Act. There was no

deliberate attempt on the part of the assessee to conceal the particulars

of the income or filing inaccurate particulars of income. The ld CIT(A)

has relied on the various case laws cited in his order and finally directed

the Assessing Officer to cancel the order levying penalty of Rs.

20,51,508/- U/s 271(1)(c) of the Act.

4. Now the Revenue is in appeal before us. The learned D.R.

vehemently supported the order of the Ld. Assessing Officer. At the 4 ITA 746/JP/2012_ ACIT Vs. Shiv Bilas Resorts

outset, the Ld. AR for the assessee has reiterated the submissions made

before the Ld. CIT(A) and supported his order.

5. We have heard the rival contentions of both the parties and

perused the material available on record. The issue whether the

depreciation on crockery and cutlery is allowed 100% and 80% in case

of blanket and linen is debatable. This claim of the assessee was

accepted by the Assessing Officer in A.Y. 2007-08. The assessee's claim

is bonafide during the year under consideration but in A.Y. 2008-09, the

assessee revised the depreciation claimed during the assessment

proceedings. The assets had been disclosed by the assessee, therefore,

no inaccurate particulars of income has been furnished. We, therefore,

uphold the order of the ld. CIT(A).

6. In the result, the revenue's appeal is dismissed.

Order pronounced in the open court on 10/04/2015.

Sd/- Sd/- ¼vkj-ih-rksykuh½ ¼Vh-vkj-ehuk½ (R.P.Tolani) (T.R. Meena) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated 10th April, 2015 *Ranjan 5 ITA 746/JP/2012_ ACIT Vs. Shiv Bilas Resorts

vkns'k dh izfrfyfi vxzsf'kr@Copy of the Order forwarded to:

1. vihykFkhZ@The Appellant- The ACIT, Circle-5, Jaipur.

2. izR;FkhZ@ The Respondent- M/s Shiv Vilas Resorts, Jaipur.

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDr@ vk;dj vk;qDr¼vihy½@The CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 746/JP/2012).

vkns'kkuqlkj@ By order,

lgk;d iathdkj@Asst. Registrar