Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 1319 - ITAT MUMBAIDepreciation – Disallowance on account of depreciation claimed at Rs.1.07 Crores of factory building which had not been used for business – Held that:- Ownership of building is not an essential precondition for claiming/allowing depreciation, but carrying on of business or profession is a mandatory condition - For claiming depreciation for a building it should be ‘put to use for business or profession’. Burden of proof is on assessee to prove that buildings was put to use for the business or profession - There is no doubt that keeping plant or machinery ready for use has been considered passive use of the asset and depreciation has been allowed for such assets. But, in such cases condition of using the asset for the business or profession has never been waived – In the present case, it is found that the asset in question was vacant for part period and not put to use by the assessee company for the purpose of carrying on its business and earning profits there from. Further, after the said asset was leased out from 07.11.2003 onwards, the income derived from it was offered under the head “income from house property” and not business income. The case under consideration is not a case of a small trader or a retailer carrying on a business at base level. Asssessee company is part of a Group that is advised by well qualified professionals – Considering the facts, disallowance of depreciation is confirmed – Decided against the Assessee. Penalty under section 271(1)(c) of the Income Tax Act – Held that:- In view of Explanation1 to section 271(1) (c), penalty for concealment of income or furnishing inaccurate particulars can be imposed if an assessee offers an explanation which is found by the AO / FAA to be false, or if the assessee offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide. In such matters the onus is on the assessee to offer an explanation in respect of the claims made by him in the return of income - Enactment of Section 271(1)(c) read with the Explanations is to provide for a remedy for loss of revenue. In other words, Section 271(1)(c) has to be strictly applied in the larger interest of discipline in filing correct returns by the assessees. Secondly, as per the established principles of tax-jurisprudence assessee should file some positive evidences whenever he makes a claim for deductions u/s. 30-37 of the Act. Therefore, if any claim, resulting in loss to Revenue, is made by an assessee without supporting evidences, he exposes himself to penalty u/s. 271(1)(c) – In the present case, assessee company had claimed depreciation u/s. 32 of the Act that was not allowable under the provisions of the Act, proves that the assessee company had claimed excess depredation and thereby evaded payment of taxes to that extent – Penalty u/s 271(1)(c) imposable – Decided against the assessee.
|