Itxa/1185/2016 Of Pr. Commissioner Of Income Tax-Central-4 v. Reliance Petro Products Pvt. Ltd. Reported In 322_

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1185 OF 2016 Pr. Commissioner of Income Tax-4 .. Appellant v/s. Financial Technologies I. Ltd. .. Respondent Mr. Tejveer Singh for the appellant Ms. Vasanti Patel for the respondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. P.C. DATED : 21[st] JANUARY, 2019 1.The Revenue has raised following question of law for ourconsideration :- (i)Whether on the facts and in the circumstances of the caseand in law, the Tribunal is correct in holding that the issue ofdepreciation of IPRs could not be made subject matter ofassessment u/s 153A without appreciating the fact that thedirector of the assessee company had in his statement u/s132(4) during the course of the search withdrawn the claim ofdepreciation on IPRs and hence, the assessee was liable forpenalty in view of provisions of Section 271(1)(c) of the IT Act? 2.It is undisputed fact that the Revenue had raised identicalquestion in Income Tax Appeal No.801 of 2016 and other connectedappeals, concerning this very assessee for the earlier assessment years,arising out of the same judgment of the Tribunal. The Revenue'sappeal was dismissed making following observations :- “3.For the assessment year 2004-05, Revenue has questionedthe judgment of the Tribunal reversing the view of the CIT(A)and allowing the assessee's appeal and thereby deleting penaltyimposed under Section 271(1)(c) of the Income Tax Act, 1961(“the Act” for short). In the impugned judgment, the Tribunalnoted that the assessee in the return had raised the claim ofdepreciation on its intellectual property rights. During thesearch operation, director of the assessee company reduced theclaim of depreciation in his statement under Section 132(4) ofthe Act recorded by the Income Tax Authorities. The Tribunalfurther noted that during such search, no incriminating materialwas found on the basis of which the assessment could have beenframed in this respect. The Tribunal also noted that the originalreturn filed for the assessment year in question, when the claimwas made by the assessee, the same was disallowed by theAssessing Officer but in the appeal, the CIT(A) accepted thesame. The Tribunal further noted that Section 32 of the Actdoes not cover certain intangible assets for depreciation. TheTribunal relied upon the decision of the Supreme Court in thecase of CIT Vs. Reliance Petro Products Pvt. Ltd. Reported in 322 ITR 158(SC) for holding that being a plausible claim, mere factthat the same was withdrawn during the search would not giverise to the penalty. 4.As can be seen, the Tribunal has broadly proceeded on thebasis that the claim was part of the original return andtherefore, there was no concealment by the assessee and furtherthat CIT(A) had allowed such a claim for regular assessmentand Section 32 of the Act also gave rise to a debatable issue inthis respect. The Tribunal, therefore, in our opinion, correctlyplaced reliance in the decision in the case of Reliance PetroProducts Pvt. Ltd. (supra). No question of law arises. TheIncome Tax Appeals are, therefore, dismissed.” 3.In the result, this appeal is dismissed. (M.S. SANKLECHA, J.) (AKIL KURESHI, J.)