The Deputy Commissioner of Income-tax, Corporate Circle–5(1), Chennai v. M/s Redington India Ltd
[Citation -2016-LL-0915-47]

Citation 2016-LL-0915-47
Appellant Name The Deputy Commissioner of Income-tax, Corporate Circle–5(1), Chennai
Respondent Name M/s Redington India Ltd.
Court ITAT-Chennai
Relevant Act Income-tax
Date of Order 15/09/2016
Assessment Year 2006-07
Judgment View Judgment
Keyword Tags non-deduction of tax • temporary structure • revenue expenditure
Bot Summary: Shri Shiva Srinivas, the Ld. Departmental Representative, submitted that the assessee claimed depreciation at the rate of 100 on the so-called temporary structures. The Assessing Officer disallowed the claim of the assessee. The assessee has also paid royalty to M/s Microsoft Corporation Inc. without deducting tax. The Assessing Officer levied penalty in respect of the claim of depreciation and non-deduction of tax on the ground that the assessee has filed inaccurate particulars of income. According to the Ld. D.R., when the temporary structure is not eligible for 100 depreciation, the claim of the assessee is not bonafide the assessee has furnished inaccurate particulars. We have heard Sh. R. Vijayaraghavan, the Ld.counsel for the assessee also. The assessee apparently treated the expenditure on temporary structures as capital and claimed 100 depreciation.


IN INCOME TAX APPELLATE TRIBUNAL BENCH, CHENNAI BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ITA No.2219/Mds/2015 Assessment Year : 2006-07 Deputy Commissioner of M/s Redington India Ltd., Income Tax, v. SPL Guindy House, Corporate Circle 5(1), 95, Anna Salai, Guindy, Chennai - 600 034. Chennai - 600 032. PAN : AABCR 0347 P (Appellant) (Respondent) /Appellant by : Shri Shiva Srinivas, JCIT Respondent by : Sh. R. Vijayaraghavan, Advocate /Date of Hearing : 28.07.2016 Date of Pronouncement : 15.09.2016 ORDER PER N.R.S. GANESAN, JUDICIAL MEMBER: This appeal of Revenue is directed against order of Commissioner of Income Tax (Appeals) 3, Chennai, dated 09.09.2015 and pertains to assessment year 2006-07, deleting penalty levied by Assessing Officer under Section 271(1)(c) of Income-tax Act, 1961 (in short 'the Act'). 2 I.T.A. No.2219/Mds/15 2. Shri Shiva Srinivas, Ld. Departmental Representative, submitted that assessee claimed depreciation at rate of 100% on so-called temporary structures. Assessing Officer, however, disallowed claim of assessee. assessee has also paid royalty to M/s Microsoft Corporation Inc. without deducting tax. Besides, assessee has paid consultancy charges. Assessing Officer levied penalty in respect of claim of depreciation and non-deduction of tax on ground that assessee has filed inaccurate particulars of income. However, CIT(Appeals) deleted penalty on ground that this Tribunal allowed claim of assessee as revenue expenditure in respect of temporary structures. With regard to payment made to M/s Microsoft Corporation Inc., according to Ld. D.R., matter was remitted back to file of Assessing Officer. According to Ld. D.R., when temporary structure is not eligible for 100% depreciation, claim of assessee is not bonafide, therefore, assessee has furnished inaccurate particulars. Hence, according to Ld. D.R., CIT(Appeals) ought not to have deleted penalty levied by Assessing Officer under Section 271(1)(c) of Act. 3 I.T.A. No.2219/Mds/15 3. We have heard Sh. R. Vijayaraghavan, Ld.counsel for assessee also. assessee s claim of 100% depreciation on temporary structure was examined by this Tribunal in subsequent assessment year, namely, assessment year 2007-08 and this Tribunal found on identical set of facts that expenditure has to be allowed as revenue expenditure. assessee apparently treated expenditure on temporary structures as capital and claimed 100% depreciation. Whether particular expenditure is revenue in nature or capital in nature would depend upon facts of each case and there can be difference of opinion depending upon individual is concerned. When assessee felt that expenditure on temporary structures is capital in nature and claimed 100% depreciation for year under consideration, this Tribunal is of considered opinion that it cannot be construed as furnishing inaccurate particulars of income or concealment of part of its income. Furthermore, with regard to non-deduction of tax on payment made to M/s Miscrosoft Corporation Inc., as rightly submitted by Ld. D.R., matter was remitted back to file of Assessing Officer for reconsideration. In view of these factual aspects, this Tribunal is of 4 I.T.A. No.2219/Mds/15 considered opinion that CIT(Appeals) has rightly deleted penalty levied by Assessing Officer Therefore, this Tribunal do not find any reason to interfere with order of lower authority and accordingly same is confirmed. 4. In result, appeal filed by Revenue is dismissed. Order pronounced on 15th September, 2016 at Chennai. sd/- sd/- (D.S. Sunder Singh) (N.R.S. Ganesan) Accountant Member Judicial Member Chennai, th Dated, 15 September, 2016. Kri. Copy to: 1. Appellant 2. Respondent 3. CIT(A)-3, Chennai 4. Principal CIT, Chennai-5, Chennai 5. DR 6. GF. Deputy Commissioner of Income-tax, Corporate Circle–5(1), Chennai v. M/s Redington India Ltd
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