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2016 (8) TMI 376 - ITAT MUMBAIPenalty levied u/s. 271(1)(c) - additional depreciation claimed u/s. 32 (ii) r. w. s. 32(iia) on the addition to the plant and machinery - Held that:- We find that the assessee had claimed additional depreciation at the rate of 20% though the plant and machinery was used only for period of six months, that during the assessment proceedings it submitted letter to the AO to reduce the additional depreciation, that the Chartered Accountant had, in the audit report, recommended the claim of depreciation at the rate of 20%. In our opinion, considering the clear facts and circumstances of the case, it is not a case of filing inaccurate particulars of income for considering the particulars of income. It was an inadvertent mistake. The assessee had acted on the advice of a professional and his advice was found not as per the provisions of the Act. Penalty levied u/s. 271(1)(c) to be deleted. - Decided in favour of assessee. Penalty with regard to disallowance of expenditure incurred on account of increase in share capital - Held that:- There is no ambiguity about the nature of the expenditue. The expenses incurred by the assessee for issuing shares on right basis cannot be treated as revenue expenditure. It is neither a debatable issue nor there are two opinions about the said expenditure. The assessee had made a patently wrong claim. There is a difference between a debatable claim and a wrong claim. In the first instance because of the divided judicial opinions the assessee can argue that it had opted for one of the opinions. But, as far as the second category is concerned nobody can argue that the claim is supported by judicial pronouncement. The claim made by the assessee, in the case under consideration, falls under the second category. We find that the assessee had not challenged the finding of fact given by the AO that it did not file any reply in response to the penalty notice. By not filing any reply to notice issued by the AO the assessee had indirectly admitted the charge leveled by him. However, considering the fact that it had agitated the issue before the FAA and he had decided the issue on merits, we want to hold that his order does not suffer from any legal infirmity. So, confirming the same, effective ground of CO is decided against the assessee.
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