TMI Blog2004 (1) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee during the period and, therefore, he did not allow the claim of the assessee for depreciation. However, in the subsequent year, the claim for depreciation was allowed by the AO. In the meanwhile, the AO initiated penalty proceedings under s. 271(1)(c) of the Act as, according to him, the assessee had made false claim of depreciation on truck which was not used during the accounting period. The penalty was levied after considering the objections of the assessee with the prior approval of the Dy. CIT. 2.1 The assessee carried the matter in appeal before the CIT(A) and submitted before him that the matter of depreciation was only a matter of opinion since the AO had allowed depreciation in the subsequent year. It was submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for the assessee reiterated the submissions which he made before the CIT(A) and submitted that the assessee did not hide anything from the Department and there was no case of the Department that the assessee concealed any particulars of income or declared wrong income. The only dispute was relating to the allowability of depreciation which had been denied by the AO. Therefore, there was no concealment of income by the assessee and even the assessee had not concealed any particulars of income from the Department. As such, the CIT(A) rightly deleted the penalty. Reliance was placed on the following cases: (i) Decision of Hon ble Gujarat High Court in the case of CIT vs. Manu Engineering Works (1979) 8 CTR (Guj) 141 : (1980) 122 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Harshvardhan Chemicals Minerals Ltd., held that: "No penalty was leviable in view of the finding of the Tribunal that when the assessee had claimed deduction of an amount that was debatable it could not be said that the assessee had concealed any income or furnished inaccurate particulars for evasion of tax". In the instant case also, the issue as to whether depreciation should be allowed in the year under consideration or in the subsequent year, was a debatable issue. Therefore, it cannot be said that the assessee had concealed any income or furnished inaccurate particulars of income. Therefore, the AO was not justified in levying the penalty and the CIT(A) had rightly deleted the same. 2.7 On a similar issue, the Hon ble High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings and if some addition/disallowance had been made in the assessment proceedings, that itself will not prove that the assessee concealed particulars of income or furnished inaccurate particulars of income for which he will be liable to be penalised under s. 271(1)(c). For imposing penalty under s. 271(1)(c), two things are required: (i) concealment of income and (ii) furnishing of inaccurate particulars of such income. 2.10 In the instant case, neither the assessee furnished inaccurate particulars of income nor concealed any particulars of such income and under the bona fide belief claimed depreciation on the truck which was purchased during the year under consideration. This fact has not been denied by the AO. 2.11 We, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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