TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 757
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....als) erred in confirming levy of penalty of Rs. 30,40,000/- by A.O. in respect of claim for depreciation on building amounting to Rs. 91,31,916/- given up in course of assessment proceedings. 2. The appellant craves leave to add, alter, modify or delete the above Ground of Appeal." 3. The brief facts of the case are that the assessee is into manufacturing, retail trading and servicing of gold, silver and diamond ornaments. The business of M/s. Waman Hari Pethe Sons (The Firm) was transferred to the assessee company with effect from 01.04.2010. The AO observed that WDV of the building as on 31.03.2010 in the hands of the said firm stood at Rs. 3,67,36,754/-, whereas WDV of the Building as on 01.04.2010 is at Rs. 12,80,55,911/- in the hands of the assessee company. The AO, thus, observed that the assessee has claimed excess depreciation on the additional amounts of Rs. 9,13,19,157/-. During the course of assessment proceedings before the AO, the assessee submitted that the said difference of Rs. 9,13,19,157/- was on account of revaluation of assets (building) which was done in the hands of the firm. It was submitted that valuation of the Building was increased by Rs. 9,13,19,157....
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....y issuance of shares of the assessee company. It was submitted that the company filed its first return of income for AY 2011-12 with income to the tune of Rs. 11.66 crores which was computed after taking into effect depreciation on revaluation of two shops. It was submitted that there was revaluation done by erstwhile firm M/s Waman Hari Pethe Sons of two shops and transfers were made to the assessee by the said firm after revaluation of the two shops. The assessee submitted that the assessee took over these assets on revalued figures and the depreciation is claimed on the actual cost of acquisition by the assessee which was the revalued figures of the two shops. The said difference in valuation on account of revaluation of two shops was credited to the partners accounts of the said firm M/s Waman Hari Pethe Sons on 30-03-2010 while the takeover took place on 01-04-2010. It was submitted that excess depreciation was claimed based upon the opinion of Advocate of Supreme Court Shri. V.H. Patil dated 12.08.2010 which was later re-confirmed again by the said Advocate on 08.02.2013 wherein the said advocate opined that the assessee is entitled for depreciation on revalued figures of the....
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....ate of Section 271(1)(c). 6. Aggrieved by losing at both the forums viz. AO and learned CIT(A), the assessee has come in an appeal before the tribunal. The Ld. Counsel for the assessee submitted before the tribunal that assessee was incorporated on 30.03.2010 with an object to take over partnership firm namely M/s Waman Hari Pethe Sons. The said firm revalued its building consisting of two shops on 30-03-2010 by upward revision amounting to Rs. 9.13 crores from existing w.d.v. of Rs. 3.67 crores to Rs. 12.80 crores, which differential amount in valuation stood credited to the partners capital accounts on 30-03-2010. The assessee has taken over the assets and liabilities of the firm M/s Waman Hari Pethe Sons w.e.f. 01-04-2010 at its revalued figures and the agreement entered into by the assessee with the said firm dated 01.04.2010 is placed in paper book /page no. 73 to 110. It was submitted that there was a valuation report which was obtained which valued the said two shops at Rs. 12.80 crores. It was submitted that the genuineness of said increased valuation is not disputed by the Revenue and no such allegation is made by the Revenue that any fraud is perpetrated by the assessee ....
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....ucts Private Ltd.(2010) 322 ITR 158(SC) and submitted that making of claim which is not accepted by revenue does not lead automatically to levy of penalty u/s 271(1)(c). The Ld. DR relied upon decision of authorities below and submitted that it was not a case of acquisition but succession of partnership into a company. Our attention was drawn to provisions of Section 47(xiii). 7. We have considered rival contentions and have perused the material on record including case laws relied upon by both the parties. We have observed that the assessee is into manufacturing, retail trading and servicing of gold, silver and diamond ornaments. We have observed that the assessee was incorporated on 30.03.2010 with an object to take over the assets and liabilities of the partnership firm M/s. Waman Hari Pethe Sons which was infact taken over w.e.f. 01.04.2010. The agreement entered into by the assessee with the said firm wherein the said firm M/s. Waman Hari Pethe Sons was succeeded by the assessee company is placed in paper book/page 73-110. Before the said succession/ take-over of the said firm by the assessee w.e.f. 01-04-2010, the said firm M/s. Waman Hari Pethe Sons revalued its building co....
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.... assessment years 2012-13 and 2013-14 returns of income were revised by the assessee wherein the said claim of excess depreciation was withdrawn by the assessee and due taxes paid to the Revenue. It is pertinent mention here that the impugned AY under consideration is effectively first year of operation of the assessee company as it was incorporated on 30-03-2010 and the turnover declared by the assessee was Rs. 263.69 crores with an income of Rs. 11.66 crores was offered for taxation within provisions of 1961 Act on the very first year of operations which by any standards is not a meagre income. The assessee has claimed that it relied on opinion of an advocate of Hon'ble Supreme Court Shri. V.H. Patil who has given an opinion that assessee is entitled for depreciation on revalued figure of the two shops at which the said shops stood acquired by the assessee, vide opinion dated 12.08.2010 which was later reconfirmed by him vide opinion 08.02.2013. The said opinions are placed in paper book filed with the tribunal. The genuineness of the said revaluation of the two shops which was done by the said firm M/s. Waman Hari Pethe Sons from Rs. 3.67 crores to Rs. 12.80 crores was not doubt....