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2017 (9) TMI 1286 - AT - Income TaxPenalty u/s 271(1)(c) - Disallowance of depreciation on Bentley Car - Disallowance of loss on fixed assets - Held that:- There is no documentary evidence which could support the fact that the assessee owned the car since May, 2009 as the registration of the car in his name was completed in November, 2009 for which part payment was made in May, 2009 after the full payment was made and on completion of custom requirements. Moreover, the claim for depreciation only gets deferred to subsequent Years by claiming it for half year. In our view the deferral of depreciation allowance does not result into any concealment of income or furnishing of furnishing of any inaccurate particulars. However, it was a sheer accounting error in debiting loss incurred on sale of a fixed asset to profit and loss account instead of reducing the sale consideration from wdv of the block under block concept of depreciation. There was a sheer accounting error in debiting loss incurred on sale of a fixed asset to profit & loss account instead of reducing the sale consideration from wdv of the block under block concept of depreciation. There was a separate line item indicated loss on fixed asset of ₹ 1,69,429/- in the Income & Expenditure Account which was omitted to be added back in the computation. The error went un-noticed by the tax auditor as well as the same was overlooked while certifying the Income & Expenditure Account and by the tax consultant while preparing the computation of income. Hence, there was no intention to avoid payment of taxes. The quantum of assessee tax payments clearly indicates the assessee intention to be tax compliant. Moreover, the assessee with a returned income of 34.94 crores and tax payment of more than ₹ 10.85 crores which does not show any mala fide intention to conceal an income of ₹ 13.09 lacs (not even 0.4% of returned income) with an intention of evading tax of ₹ 4 lacs (not even 0.4% of taxes paid). Therefore, the allegation that assessee was having any mala fide intention to conceal his income or for furnishing inaccurate particulars of income is not correct, hence, the penalty in dispute needs to be deleted. - Decided in favour of assessee.
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