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2022 (7) TMI 1347 - AT - Income TaxPenalty u/s 271(1)(c) - mere wrong/inadmissible claim - disallowance of certain expenditure on estimated basis on some notional basis - disallowance of higher rate of depreciation - HELD THAT:- To invoke Section 271(1)(c), the entirety of circumstances must reasonable point to the conclusion that the disputed amount represents income and the assessee has concealed the particulars or furnished inaccurate particulars thereof. As noted, the quantum addition has been confirmed on the premise that the assessee is not eligible for higher rate of depreciation in the facts of the case. It is not the case of the Revenue authorities that the assessee has, in fact, concealed the fact relating to claim of depreciation allowance beyond any doubt. The Revenue Authorities have determined the lower claim of depreciation eligible to assessee on the basis of reappreciation of existing facts. In order to attract penalty under Section 271(1)(c) of the Act, it is necessary that there must be concealment by the assessee of particulars of his income or furnishing of inaccurate particulars thereof. The disallowance of certain expenditure on estimated basis on some notional basis is neither the concealment of income particulars of income nor furnishing of inaccurate particulars as such. While the claim towards expenditure may not be found acceptable in quantum proceedings, such disallowance per se cannot invite rigors of penalty. Where all material facts relevant to the issue were placed on record, mitigating circumstances to disprove any culpability of any sort against the assessee is established by implication. The claim of depreciation allowance, at best, can be taken as erroneous claim by the assessee. In the case of CIT (International Taxation) vs. Gracemac Corporation [2022 (3) TMI 904 - DELHI HIGH COURT] held that penalty under Section 271(1)(c) is not leviable as a matter of course in the absence of any element of falsity per se. Mere making of claim, which is not sustainable in law, by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee. A variance in depreciation claim made in the return does not thus tantamount to furnishing inaccurate particulars per se. See Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - Decided in favour of assessee.
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