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2016 (1) TMI 129 - AT - Income TaxPenalty u/s 271(1)(c) - Reopening of assessment - lower appellate order deleting depreciation disallowance - Held that:- A perusal of the case file reveals that the installation report of this asset. Page 41 of the paper book reveals lease rent income therefrom in assessee’s P & L account. Page 43 is sales tax challan of the asset. It transpires from the case file that this Kanpur entity went into liquidation. The assessee filed company application before hon’ble Allahbad high court for inspection and possession of its lease asset. More particular, the air pollution control equipment in question by specifically stating value thereof as per lease agreement dated 18-03- 1996. Their lordships passed order 11-12-2002 issuing necessary directions to the official liquidator. He issued intimation to assessee on 08-01-2003 appointing a valuer for inspecting the factory site. This valuer visited the factory site. We confronted ld. department representative with all these overwhelming evidence. He sought time to produce the search inventory. The same stands submitted in the courses of hearing. Page 53 thereof reveals that the very air pollution control equipment was found during the course of search. We observe on the basis of these facts and evidence that the assessee has been able to prove genuineness of its depreciation claim qua the air pollution control equipment in question leased out to M/s Rajendra Steels Ltd, Kanpur. The Revenue’s argument accordingly are declined. We affirm the CIT(A)’s findings extracted hereinabove granting depreciation relief to assessee. The Revenue’s second substantive ground fails. This failure of Revenue’s second substantive ground renders entire reassessment unsustainable in law. All other disallowances/additions of loss on shares and investments and that of depreciation are deleted as a necessary corollary. Section 271(1)(c) penalty relating to depreciation claim hereinabove is allowed since the main disallowance/addition does not survive. - Decided in favour of assessee.
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