Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (10) TMI 392 - ITAT MUMBAILevy of penalty u/s 271(1)(c) - Claim of depreciation on leased assets - Inaccurate particulars furnished - sham transactions - Tax avoidance - Held that:- The search/survey operation on M/s. Western Pacques India Ltd., which was one of the major lessees having the transaction of lease with the assessee, it was found that the leased assets were neither installed nor put to use by the lessee and were in fact non-existent - the most of the assets stated in the lease agreement were not eligible for 100% depreciation - there were huge over invoicing of the assets - even the assessee itself, in the statement of facts has mentioned that in some cases the party (lessee) had taken the assessee for a ride by cheating the assessee with regard to the purchase of assets - The assessee had come to know about this fact only from the assessment order - This explanation given by the assessee itself proves that the assessee neither purchased/owned the alleged leased assets nor was aware as to whether the said assets were ever purchased by the lessees - Had the assessee leased the assets in question, the assessee firstly would have purchased those assets either from the manufacturer in case of simple lease transactions and/or from the lessee itself in case of “sale and lease back transaction” - When the assessee itself was not aware about the existence of assets, it was obvious that such a transaction could not fall in the definition of lease transactions. The assessee had mentioned that the AO in the assessment order had mixed up the facts which would be explained at the time of hearing - the assessee had put a wrongful claim of depreciation and thereby had furnished inaccurate particulars of income for the purpose of concealment of real income, hence, the penalty proceedings were correctly initiated by the AO - It was not a case of tax planning by the assessee so as to avoid or reduce its taxes by remaining within the framework of the law - The transactions entered into by the assessee were sham and bogus transactions which were intended to defeat the provisions of law - tax avoidance by way of tax planning or structuring the transactions so as to reap the largest tax benefit may be permissible under law but fraudulent transfer of assets or income or engaging in sham transactions with the object of reducing the tax liability cannot be said to be a case of tax avoidance but of tax evasion - Any act or attempt to reduce the tax liability by deceit, subterfuge or concealment is not permissible under law - It was a clear cut case of furnishing of inaccurate particulars of income and as such the penalty has been correctly levied by the lower authorities - neither the assessee offered any explanation nor the assessee could show that the claim of the assessee regarding the depreciation was bonafide – thus, the order of the CIT(A) is to be upheld – Decided against assessee.
|