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2016 (12) TMI 294 - AT - Income TaxPenalty u/s. 271(1)(c) - depreciation u/s. 32(l)(ii) on leasehold rights in industrial land belonging to MIDC as an intangible asset - Held that:- The provisions of the Act cannot be interpreted to mean that leasehold rights granting such type of ownership over land, etc. would also qualify as intangible assets for the purpose of depreciation under the Act. According to the Tribunal in assessment year 2006-07, this would lead to a conflicting situation where land acquired on freehold basis would not be eligible for depreciation but similar land acquired on leasehold basis would be eligible for depreciation that too at a higher rate. In the facts and the circumstances of the case, the Tribunal confirmed the action of the AO in disallowing the claim of depreciation on leasehold rights over the land treating the same as intangible asset u/s 32(1)(ii) of the Act. Thus as claim of the assessee in any case, was not sustainable in law and in view of the above, where the explanation of the assessee is not found to be bonafide, the assessee is liable to levy of penalty under section 271(1)(c) of the Act. Accordingly, we uphold the order of CIT(A) in confirming the levy of penalty under section 271(1)(c) of the Act. - Decided against assessee
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