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2019 (2) TMI 517 - AT - Income TaxPenalty u/s. 271(1)(c) - depreciation at higher rates on valuation of the office flats - assessee on realising its mistake has suo motto revised aforesaid depreciation during assessment proceedings and claimed depreciation on lower value on which the asset was transferred subsequently on 05.08.2006 - Held that:- The assessee had justifiable cause for claiming higher depreciation in the return of income filed with Revenue for impugned assessment year AY 2006-07 as the said office premises was transferred in the books of account of the assessee for value recorded at ₹ 167.58 lakhs during impugned assessment which was based on valuation certificate and it could not be said that the said valuation is without any cause or justification, thus it led the assessee to claim higher depreciation but however for whatever reasons the said assets was transferred vide registered agreement entered into on 05.08.2006 at lower value of ₹ 92.29 lacs which led the assessee to revise its claim of depreciation downward for impugned assessment year by withdrawing claim of depreciation to the tune of ₹ 3,63,548/-. Thus under these circumstances in our considered view , the assessee has come out with bonafide explanation and under these circumstances no penalty is exigible on the assessee u/s 271(1)(c) of the 1961 Act as the assessee case is covered by Explanation 1 to Section 271(1)(c) of the 1961 Act. Depreciation on assets purchased in the name of M/s S.D. Construction proprietary concern of Shri. Shekhar Dadarkar who is partner in the assessee firm - Held that:- The vendors had inadvertently made invoices in the name of this concern as it is well known concern in market. It is submitted that the assessee accounted for these purchases in its books of accounts and these assets were transferred to the assessee books of accounts through journal entries. It is also being averred that no depreciation was claimed by S.D. Construction on these assets. Claim of the assessee for depreciation on these assets did not found favour by the all the authorities concurrently while adjudicating quantum additions till the stage of tribunal and the appeal of the assessee was dismissed by tribunal on this ground for AY 2006-07 [2012 (8) TMI 1149 - ITAT MUMBAI]. So far as leviability of penalty u/s 271(1)(c) is concerned, we are of considered view that the assessee has indeed brought this asset in its books of accounts by transferring these assets to its books of accounts through journal entries. It is also claimed that the asset was used for business purposes. It could not be refuted by learned DR that the said assets were not used for business purposes of the assessee. The invoices were only drawn by vendor in the name of other concern M/s S.D.Construction and the said concern did not avail depreciation on these assets as is claimed by the assessee. Under these circumstances, we are of the considered view that no penalty u/s 271(1)(c) is exigible on the assessee - Decided in favour of assessee
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