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2013 (11) TMI 730 - HC - Income TaxPenalty u/s 271(1)(c) of the Income tax act - Detection in the course of survey that 100% depreciation claimed in respect of the alleged sale and lease back from M/s.Bellary Steel and alloys Limited (for short “Bellary Steel”) was held to be false claim by the assessing authority - Whether levy of penalty under Section 271(1) (c) of the Act is legally sustainable in the light of the fact, which surfaced in the survey under Section 133-A of Act, that claim of 100% depreciation made by the respondent-assessee was not only false but was made in respect of non-existent goods, and that penalty is liable to be levied not only for concealing the income but also for furnishing inaccurate particulars – The respondent M/s.BPL Sanyo Finance Limited (for short “the assessee”) was in the leasing business. They had filed return of income for the assessment years 1997-98, i.e. for the financial year 1-4-1996 to 31-3-1997, on 28th November 1997 under Section 139, declaring a total income of Rs.1,26,50,375/- as applicable u/s 115JA of the Act - Till 13-3-2000, i.e., when the original assessment was made, the claim of the assessee was found acceptable and accepted as such. Held that:- It is the case of the revenue, in the present case that the information/particulars furnished in the return of Income filed for the assessment year 2002-03 was inaccurate - Assessee had claimed 100% depreciation on rolls, claiming that they had purchased the rolls from BM Steels Pvt. Ltd., (for short “BM Steel”) and leased to Bellary Steel. That led the concerned authority to conduct survey under Section 133-A of the Act at the premises of Bellary Steel on 1st June 2000. In the course of survey, various incriminating documents were seized/found. An inventory of rolls at the premises of Bellary Steel revealed that they had only 361 rolls in their stock as against 3702 rolls accounted both as purchased and leased by Financial institutions and leasing companies, like the assessee in the present case. Having regard to the admitted facts, the assessee could not and did not prove that he filed return due to fraud committed by Bellary Steel. On the facts and circumstances of the case, it cannot be stated that the assesee was completely innocent/ignorant of the fact that the assets/rolls were not in existence at all and that they claimed 100% depreciation in respect thereof without having any knowledge thereof. Similarly, it cannot be stated that the return filed was incorrect and it would not amount to furnishing inaccurate particulars or concealing of the income – Penalty levied u/s 271(1)(c) is correct – Decided in favor of Revenue.
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