Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 954 - AT - Income TaxPenalty u/s 271(1)(c) - Claim of depreciation on financed leased assets - Held that:- We note that the Assessing Officer while disallowing the depreciation has not excluded the capital / principle component in the lease rentals which are included in the total income of the assessee. If the Assessing Officer has taken a view that the transaction in question is a finance lease and depreciation on such asset is not allowable to the assessee then only the interest component in the lease/repayment amount received by the assessee can be assessed to tax instead the entire lease amount. Therefore we find that the Assessing Officer while disallowing the claim of the assessee on account of depreciation of ₹ 7,27,04,961 has not excluded the principle component in the lease rental of ₹ 14,84,88,074. If the Assessing Officer would have computed the correct income of the assessee then despite being disallowance of the depreciation the total income of the assessee would have been much less than the total income by allowing the claim of depreciation. We note that the assessee has included in the total income a sum of ₹ 17,63,40,728 being lease rentals which includes principle as well as finance charges. Therefore in view of the above facts when the Assessing Officer while disallowing the claim of depreciation has not considered the exclusion of the principle component of the lease rental clearly shows that the penal provisions of Section 271(1)(c) of the Act cannot be attracted in this case. Even otherwise, it is a case of difference of opinion on an issue of allowabilty of depreciation on lease assets wherein the Assessing Officer has not accepted the view and belief of the assessee which has been confirmed by this Tribunal however, in view of the judgment of Hon'ble Supreme Court in the case of ICDS Ltd. Vs. CIT [2013 (1) TMI 344 - SUPREME COURT ], this issue is a debatable issue and if the assessee has claimed depreciation on leased asset which is a possible view then disallowing of said claim of the assessee would not ipso facto amount to concealment of income or furnishing of inaccurate particulars of income. Accordingly, in view of the above discussion, we do not find any error or illegality in the impugned order of the CIT (Appeals). - Decided against revenue.
|