TMI Blog2011 (5) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... n made u/s. 68, under the deeming provisions, has to be taken to its logical conclusions by which one has to assume that the assessee furnished inaccurate particulars and concealed income to the extent of Rs. 5,50,000 without any satisfactory explanation - Therefore penalty levied by the Assessing Officer vis-ŕ-vis addition of Rs. 5,50,000 is justified Disallowance of depreciation of Rs. 11,00,000 - Assessee contended that during the course of assessment proceedings assessee-firm was collecting information so as to furnish the details and at that point of time it was realized that depreciation in respect of studio equipment amounting to Rs. 11,00,000 was wrongly claimed since this equipment had not been used during the year - It was further submitted that initially depreciation was claimed because of the fact that equipment was purchased (booking made) and thus appeared under the head 'fixed assets' - Since claim of depreciation was withdrawn voluntarily, it is not an issue of concealing income or furnishing inaccurate particulars of income - Held that:- it cannot be termed as 'voluntary disclosure' and even if it is disclosed voluntarily, it can not be termed as a revised return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer. We are concerned with the penalty levied consequent to the addition of Rs. 5,50,000 and disallowance of Rs. 11,00,000. In response to the show-cause notice the assessee contended that during the course of assessment proceedings assessee-firm was collecting information so as to furnish the details and at that point of time it was realized that depreciation in respect of studio equipment amounting to Rs. 11,00,000 was wrongly claimed since this equipment had not been used during the year. It was further submitted that initially depreciation was claimed because of the fact that equipment was purchased (booking made) and thus appeared under the head 'fixed assets'. Since claim of depreciation was withdrawn voluntarily, it is not an issue of concealing income or furnishing inaccurate particulars of income. 6. Similarly, subsequent to explanation dated 23.1.2006 assessee-firm filed another letter dated 17.3.2008 wherein assessee reiterated the claim made earlier, as regards withdrawal of claim of depreciation. Further it was submitted that a sum of Rs. 5,50,000 was shown as outstanding under the head 'loans and advances'. It was not a borrowing but the balance amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the assessee filed a paper book consisting of 25 pages. Adverting our attention to the explanation furnished before the Assessing Officer, it was submitted that there is no dispute that it is not a loan but it is only a liability on account of purchase of car. Part payment of purchase price was made through ICICI Bank and the same having not been disputed by tax authorities, the Assessing Officer was not justified in treating the impugned amount as unexplained cash credit. It was also contended that installments paid to ICICI Bank was accepted by the Department and merely because ICICI bank could not furnish the papers relating to purchase of car, since the same were not traceable from ICICI bank, explanation of the assessee cannot be said to be false and thus it was not a case of concealment of income. 12. Similarly with regard to revised claim of depreciation it was contended that the Assessing Officer merely asked for the bills for purchase of studio equipment and no further inquiry was made. Out of the total amount of Rs. 19,78,357 referable to the cost of studio equipment assessee had voluntarily withdrawn the claim of depreciation in respect of studio equi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the assessee to prove that the declaration of income on 1.12.2003 was valid and proper and has to furnish bona fide explanation vis- -vis additions/disallowances made. Thus, he strongly supported the orders passed by the tax authorities. 14. We have carefully considered the rival submissions and perused the record. In the quantum proceedings the ITAT 'B' Bench Mumbai (supra) upheld the addition of Rs. 5,50,000 by observing as under :- "The Assessing Officer noted in para three of the assessment order that the assessee failed to establish with documentary evidence the factuam of purchase of car. No confirmation was filed to substantiate the advance standing, in the name of the said party. Accordingly, the Assessing Officer made the addition. The CIT(A), confirmed the addition on the ground of non-furnishing of any evidence before him. In the course of present appellate proceedings, the assessee failed to file any evidence, on the issue in question. In view of this, the findings of learned CIT(A) are confirmed, as the deletion can be made only on the basis of corroborative evidences and not on the basis of bare assertions, as made by the assessee." 15. Even at this stage th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said equipment was not put to use in the year under consideration. In the letter dated 17.3.2008 the assessee admitted before the Assessing Officer that there were flaws in the equipment and as such it could not be used for the purpose it was purchased. Despite this glaring fact the assessee chose to claim depreciation on such equipment which itself indicate that the assessee-firm purposely furnished inaccurate particulars of income by claiming excess depreciation. It is sought to be contended that withdrawal of claim of deprecation was 'voluntary' and, but for the voluntary admission, the department would have never known that the equipment had not been used. But the fact remains that even after considerable gap, reckoned from the date of filing of return, the assessee did not choose to revise its claim of depreciation. There is sufficient gap between the date of processing of return and the date on which case was selected for scrutiny. Even after the case was selected for scrutiny the assessee did not revise its claim. For the next year i.e. for A.Y. 2004-05 the assessee would have filed its return of income and at least at that point of time either the assessee or audi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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