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2021 (3) TMI 260 - AT - Income TaxPenalty u/s 271(1)(c) - excess depreciation claim on plant and machinery u/s.32(1)(iia) - disallowance of claim as appellant has started production only in the current year and therefore the assessee cannot be said to have been already engaged in the business of manufacturing - HELD THAT:- While deciding the matter in favour of the assessee the Ld. Tribunal in M/S CERA SANITARYWARE LTD. VERSUS ACIT (OSD) , RANGE-1, AHMEDABAD [2017 (1) TMI 390 - ITAT AHMEDABAD] limited company declaring total income of ₹ 11.43 Crores approx. and having no mens rea of claiming excess depreciation of just ₹ 7,80,826/-, rather it was claimed in regular course with the firm belief that it is legally allowable which was further supported by statutory Audit Report and therefore, imposition of penalty is unjustified. The A.O. decided the matter against the assessee on the contention that depreciation can be allowed on the show room building as it could not be deemed to be put to use on 05.03.2007 as claimed by the assessee but was put to use on 31.05.2007 after the completion of Bath Studio. On that premises the penalty imposed u/s.271(1)(c) of the Act was declared to be unjustified as the assessee has only committed an undoubtful bona fide error without having any intention of concealment of income or furnishing inaccurate particulars of income. Thus relying on the same ratio when there was full disclosure of the claim made by the assessee in the case in hand certified by the Chartered Accountant penalty is not justified merely on the ground of rejection of claim on merit and, thus, quashing of penalty by the Ld.CIT (A), in our considered opinion, is just and proper so as to warrant inference. Decided against revenue.
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