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2015 (6) TMI 1116 - AT - Income TaxPenalty u/s. 271(1)(c) - Deduction claimed u/s. 80I and 80IA on manufacturing and sale of Gutka, Treating sales tax incentive as capital receipt - Held that:- We are of the considered view that since the first two issues on which the penalty has been levied u/s. 271(1)(c) involves substantial question of law, therefore, no penalty is leviable thereon. The Hon'ble jurisdictional High Court in the case of CIT Vs. M/s. Nayan Builders and Developers (2014 (7) TMI 1150 - BOMBAY HIGH COURT) has held that where the debatable and arguable issues are involved and substantial question of law is framed in quantum proceedings, no case for levy of penalty is made out. Depreciation on structures incidental or ancillary structure to the windmill - Held that:- No penalty was levied by the Assessing Officer on similar disallowance in the preceding assessment year, therefore, the penalty cannot be levied in succeeding assessment year for the same disallowanceLevy of penalty for disallowance of depreciation claim on structures ancillary to windmill is deleted. Rate of depreciation is concerned, the assessee has admitted that the mistake in adopting rate at 100% was bonafide. We accept the explanation furnished by the assessee in erroneously applying higher rate of depreciation. It was in the impugned assessment year that rate of depreciation was reduced from 100% to 80%. The assessee applied 100% rate of depreciation instead of 80%. The mistake can be said to be a silly mistake caused by callousness. The assessee should have been more careful in applying the rate of depreciation. In view of the facts of the case, we are of the view that levy of penalty is not justified. - Appeal Decided in favour of assessee
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