TMI Blog2010 (9) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... ese appeals is whether or not the learned Commissioner (Appeals) was justified in upholding the penalty imposed on the assessee under section 271(1)(c) of the Income Tax Act, 1961 ( the Act in short), on the issue of disallowance of claim of depreciation in respect of assets given on lease. The assessment years involved are 1998-99, 1999-00 and 2000-01. In terms of the requirements of Hon ble Supreme Court s judgment in the case of ONGC Vs Collector of Central Excise (104 CTR 31), the assessee, being a public sector undertaking, has obtained the requisite clearance of the Committee on Disputes (Cabinet Secretariat). 2. Learned counsel submits that the issue in appeal before us is now squarely covered by Hon ble Supreme Court s judgment in the case of CIT Vs Reliance Petroproducts Pvt Ltd (322 ITR 158) inasmuch as there is nothing more than rejection of depreciation claim made by the assessee, and particularly as there were several judicial precedents in favour of the assessee on admissibility of the said claim, which has led to the impugned penalty having been levied on the assessee. It is pointed out that while the assessee s claim is that, on the admitted facts of the case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, it will still not be a fit case for imposition of concealment penalty under section 271(1)(c). 3. Learned Departmental Representative, on the other hand, vehemently relies upon the orders of the authorities below and submits that as the things stand now and the disallowance of depreciation having been confirmed in appeal, the onus is entirely on the assessee to demonstrate the bonafides of its claim of depreciation. There is nothing more than assessee s unsubstantiated claims of having made the claim of depreciation bonafide. Just because assessee makes a submission that it is a bonafide claim, one cannot proceed on the basis that it must be a bonafide claim. The fact that the claim of the assessee has been rejected by the Assessing Officer, as also in appeal, it is clear that the claim of the assessee is neither correct nor bona fide. 4. In our considered view, a plain reading of the assessment order shows that there is no dispute about the facts of the case and that perceptions of the assessee and the revenue differ only on the legal implications of these facts. In assessment order for the assessment year 1998-99, for example, Assessing Officer observes as follows: . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be seen, found, observed or discovered. That is certainly not the situation before us. The assessee has made a claim, and that too by revised return which virtually ensured that the fact of assessee s having made this claim cannot remain unnoticed by the Assessing Officer, and has given specific justification and all the supporting details for the same. By no stretch of logic, this situation can be treated as a situation in which any income is concealed by the assessee. Concealment of an income by an income cannot be a passive situation anyway; it implies that the person concealing the income is hiding, covering up or camouflaging an income something which essentially requires a conscious effort. On the contrary, this is a situation in which the assessee has acted in very transparent and straight forward manner. There cannot be any concealment of income in such a situation. 61. The expression furnishing of inaccurate particulars of income has also not been defined in the Act. The expression inaccurate refers to not in conformity with the fact or truth and that is the meaning which, in our considered view, is relevant in the context of furnishing of inaccurate par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sense, either. 6. Hon ble Supreme Court judgment, in the case of Reliance Petroproducts (supra), were concerned with the question whether. in this case, as a matter of fact, the assessee has given inaccurate particulars . Their Lordships noted that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false and add that such being the case, there would be no question of inviting the penalty under section 271(1)(c) of the Act and that a mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of the assessee . It is not even Assessing Officer s case that the facts stated in the return are found to be erroneous, or the assets which were claimed to have been leased out did not exist. The controversy is confined to the question as to, on a proper construction of the applicable legal position, who is entitled to depreciation on assets said to have been leased by the assessee to its customers. In our considered view, in view of the legal position as discussed above, a legal claim per se, right or wrong, cannot a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproved by the Hon ble Supreme Court in the case of Mussadilal Rambharose Vs CIT (165 ITR 14). Referring the judgment of Hon ble Patna High Court, Their Lordships have observed as follows: The Patna High Court emphasized that as to the nature of explanation to be rendered by the assessee, it was plain on principle that it is not the law that the moment any fantastic or unacceptable explanation is given, the burden placed on him will be discharged and presumption rebutted. We agree. We further agree that it is not the law that each and every explanation by the assessee must be accepted. It must be acceptable explanation, acceptable to a fact finding body . 9. Viewed in this perspective, undoubtedly just because assessee has an explanation whatever be its worth and credibility, it does not cease to be a case in which concealment penalty is to be levied, but then as long as there is a reasonable explanation for the conduct of the assessee, the onus of the assessee stands discharged. To illustrate, when a salaried employee claims deduction on account of depreciation on car from his salary income, he cannot possibly escape the rigour of penalty on the plea that what he has mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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