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2016 (12) TMI 1809 - AT - Income TaxPenalty u/s 271(1)(c) - excess depreciation claim - assessee engaged in development of integrated Textile Park in the Special Economic Zone Visakhapatnam, installed water supply and treatment plant for the benefit of users and claimed 100% depreciation on such water treatment plant and equipments - HELD THAT:- Whether the assessee is developing exclusive infrastructure facility of water treatment plants is eligible for 100% depreciation or providing in house water supply project or water treatment plant in a integrated infrastructure facility being Textile park in Special Economic Zone is a debatable issue which involves two possible views. The assessee had taken one of the possible view which was supported by sound legal contention and also certified by the tax auditor cannot be considered as furnishing of inaccurate particulars of income within the meaning explanation 1 to sec. 271(1)(c) of the Act. Moreover, even after disallowance of excess depreciation, the returned loss continued to be in loss and which does not results into taxable income, so as to claim that the assessee has claimed excess depreciation to evade payment of tax. Excess depreciation claim made by the assessee is a bonafied claim without any fraudulent intention to evade tax, which does not tantamount to furnishing inaccurate particulars of income warrants levy of penalty u/s 271(1)(c) of the Act. The CIT(A), after considering relevant facts, rightly deleted penalty levied by the A.O. We do not see any reasons to interfere with order of the CIT(A). Therefore, we upheld the CIT(A) order and dismissed appeal filed by the revenue.
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