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2013 (11) TMI 937 - AT - Income TaxPenalty u/s 271(1)(c) - Capitalisation of the cost of machinery - Disallowance of depreciation - Held that:- The computation of total income given in the assessment order, shows that this amount was allowed as depreciation on the travelling expenses of Rs. 1,46,308/- capitalised by the A.O. and although submission to this effect was made by the assessee before the ld. CIT(A), it appears that no finding whatsoever has been given by the ld. CIT(A) on this aspect. In our opinion, there was thus no justification in imposing the penalty in respect of the amount of Rs. 36,577/- which did not represent any addition made to the total income of the assessee. - Decided in favor of assessee. Machinery was used for 182 days making the assessee entitled for depreciation at full rate. The claim of the assessee for depreciation at full rate thus was a bonafide claim and although the assessee accepted the disallowance made by the A.O. on this issue by restricting to only half, we are of the view that no penalty u/s 271(1)(c) of the Act in respect of addition of Rs. 55,375/- could be imposed. - decided in favor of assessee. Penalty due to claim of additional depreciation - Held that:- Provisions of section 32(1)(iia) are very plain and clear which provide that additional depreciation is allowable in the case of any new machinery or plant which has been acquired and installed after 31st March, 2005. The proviso to section 32(1)(iia) makes it further clear that no deduction on account of additional depreciation shall be allowed in respect of any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person. In the present case, additional depreciation u/s 32(1)(iia) was claimed by the assessee on the old machinery which was already used by other person and this relevant fact was not disclosed by the assessee in any form in the return of income filed for the year under consideration. The same was revealed as a result of survey followed by scrutiny assessment done by the A.O. and when it was confronted by the A.O. to the assessee, the later had no option but to surrender its claim for additional depreciation - Therefore, penalty is confirmed on this issue to the extent additional depreciation claimed - Decided against the asssessee.
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