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2016 (10) TMI 5 - AT - Income TaxPenalty under Section 271(1)(c) - disallowance of depreciation in respect of assets given under finance lease by treating the lease transaction as finance transaction - Held that:- As decided in assessee's own case for the instant assessment year 2002-03 under appeal by holding that the assessee is entitled to claim depreciation in respect of assets given under ‘sale and lease back basis’ The AO was directed to withdraw the corresponding benefit given to the assessee by excluding the value of capital component of the lease rent from the income of the assessee. The Tribunal has in the assessee’s own case has also allowed the assessee’s claim of depreciation in respect of assets given under ‘sale and lease back basis’ for the assessment years 1995-96 to 1999-00 following the judgment of Hon’ble Supreme Court in the case of ICDS Limited v. CIT (2013 (1) TMI 344 - SUPREME COURT ) and the AO was directed to withdraw the corresponding benefit given to the assessee by excluding the value of capital component of the lease rent from the income of the assessee. The Tribunal has also allowed the afore-stated relief for assessment year 2000-01 to 2003-04 in assessee’s own case The Tribunal has also deleted the penalty levied by the AO and as sustained by learned CIT(A) on the disallowance of the assessee’s claim of depreciation in respect of assets given under ‘sale and lease back basis’ for the assessment years 1995-96 to 1999-00 . Under the above circumstances, we are of the considered view that the penalty levied by the AO and as confirmed/sustained by the learned CIT(A) on the disallowance of the assessee’s claim of depreciation in respect of assets given under ‘sale and lease back basis’ for the instant assessment year 2002-03 cannot survive as quantum additions itself had already been deleted by the Tribunal as set out above and hence we order deletion of penalty levied u/s 271(1)(c) of the Act by the AO and as confirmed/sustained by the learned CIT(A). - Decided in favour of assessee.
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