TMI Blog2019 (1) TMI 1520X X X X Extracts X X X X X X X X Extracts X X X X ..... es of opinion with regard to applicability of rate of depreciation on items of Electrical installation. Merely because assessee claimed depreciation at 25% treating items to be plant, which claim was not acceptable to revenue, would not by itself attract penalty under section 271 (1) (c) of the Act. The disallowance can at best be a wrong claim but not a false claim. See COMMISSIONER OF INCOME-TAX VERSUS BACARDI MARTINI INDIA LTD. [2006 (9) TMI 104 - DELHI HIGH COURT] - Decided in favour of assessee Penalty levied on account of technical assistance/know-how expenses - Nature of expenses - Held that:- It is observed that assessee offered explanation which has not been found false by Ld.AO or by Ld.CIT(A). Further in our considered opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271(1)(c) on additions on account of Technical Assistance/Know-how expenses of ₹ 35,69,931. The appellant craves to add, amend, alter the ground either before or at the time of hearing of the appeal. Assessment year 2007-08 ITA No.6568/Del/2013 (assessee s appeal) 1. That on the facts and circumstances of the case and in law, the Ld.CIT(A)-XVI ( the CIT(A) ) has erred in upholding the order of AO by levying penalty u/s 271(1)(c). 2. That on the facts and circumstances of the case and in law, the Ld.CIT(A)-XVI ( the CIT(A) ) has erred in upholding the order of AO by levying penalty u/s 271(1)(c) on additions on account of disallowance of depreciation of ₹ 4,74,334/- on electric fittings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) disallowing depreciation on UPS ₹ 72,559/- c) capitalisation of know-how Rs.35,69,931/- 3.1 . Aggrieved by additions made by Ld.AO assessee preferred appeal before Ld.CIT(A), which was dismissed vide order dated 31/08/10. Against order passed by Ld.CIT(A), assessee preferred appeal before this Tribunal. 4. Ld. AO issued notice under section 274 read with 271(1)(c) of the I.T.Act 1961, for furnishing inaccurate particulars. Assessee submitted various details in response to notice issued and after considering the same, Ld.AO levied penalty of ₹ 18,53,080/-. 5 . Aggrieved by penalty order of Ld. AO, asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, claiming of excess depreciation amounts to furnishing of inaccurate particulars of income, and therefore penalty deserves to be confirmed. She placed reliance upon decision of Hon ble Delhi High Court in the case of CIT vs Zoom Communication Pvt.Ltd. , reported in (2010) 191 Taxman 179 . 10. We have perused submissions advanced by both sides in light of records placed before us. 10.1. It is observed that assessee submitted it to be an inadvertent mistake to claim excess depreciation of 25% by considering Electrical fittings as Electrical installations. It is observed from orders of authorities below that assessee claimed depreciation at 25% on ground that these were electrical installations which are not in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re furnished inaccurately, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of assessee and such a claim cannot amount to furnishing inaccurate particulars. The order imposing penalty is quasi-criminal in nature and the burden lies on the Department to establish that the assessee had concealed his income or furnished inaccurate particulars. 10.3 . Respectfully following the same we are inclined to delete penalty levied by A.O. on the disallowance of depreciation. 11. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.Ltd. , reported in (2010) 191 Taxman 179 . 13. We have perused submissions advanced by both sides in the light of records placed before us. 13.1. It is observed that assessee offered explanation which has not been found false by Ld.AO or by Ld.CIT(A). Further in our considered opinion claim of capital versus revenue expenditure itself is debatable and therefore cannot be subject matter of penalty by way of concealment or filing of inaccurate particulars. We are therefore inclined to delete penalty levied by Ld.AO. 13.2. Accordingly this ground raised by assessee stands allowed. 14. In the result appeal filed by assessee for assessment year 2005-06 stands allowed. 15. Assessment year 2007-08 15.1. It is ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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