TMI Blog2013 (3) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... urther find that on the similar issue Hon’ble Apex Court in CIT V/s Reliance Petroproducts Pvt. Ltd.(2010 (3) TMI 80 - SUPREME COURT)d eleted the similar penalty - Decided in favor of assessee. - ITA No.6571/Mum/2010 - - - Dated:- 31-1-2012 - SHRI D.K.AGARWAL AND SHRI T.R.SOOD, JJ. Appellant by : Shri Vijay Mehta Respondent by : Ms. Rupinder Brar ORDER PER D.K.AGARWAL (JM) This appeal preferred by the assessee is directed against the order dated 8.7.2010 passed by the ld. CIT(A) for the Assessment Year 2002-03. 2. Briefly stated facts of the case are that the assessee company is engaged in data communication, design, development, purchase and sale of networking products, it s maintenance and installation etc. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited 40 SOT 295 (Mum) (SB) has held that routers, switches are to be included in the block of computer entitled to depreciation at the rate of 60%. Since while passing the assessment the AO has initiated penalty proceedings u/s 271(1)(c) of the Act, the assessee was asked to show cause as to why penalty u/s 271(1) (c) should not be imposed. In response, the assessee filed his reply interalia stating that the additions made in the assessment year are on account of different interpretation of law and not due to concealment of particulars of income or furnishing inaccurate particulars of income, therefore, the penalty proceedings be dropped, However, the AO did not accept the assessee s explanation. According to the AO since the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO observed that the assessee has included various items such as routers, switches, cords, cables, modems, UPS, software and memories of these equipments in this block of assets. According to the assessee company routers, switches and ancillary equipment did not have independent utility but were only part of computer system, thus making it eligible for depreciation at the rate applicable for computers. The AO did not accept the contention of the assessee since according to him such items were not computers but only part of general plant and machinery and therefore, curtailed the depreciation cover to 25% and disallowed Rs.1,39,20,939/- on account of excess depreciation claimed on plant and machinery and added back the same to the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l expenses or the expenses specifically provided under the Act are admissible for claim of deduction. In the circumstances, The AO held that the lease equalization of Rs.54,24,303/- cannot be allowed and accordingly added the same to the total income of the assessee. On appeal, the ld. CIT(A) also upheld the disallowance made by the AO. On further appeal, the Tribunal has also upheld the disallowance made by the AO. 11. At the time of hearing, the ld. Counsel for the assessee submits that the assessee has shown complete particulars in respect of lease equalization in its Profit and Loss Account appearing at pages 6-14 of the assessee s paper book. The claim was made by the assessee based on Accounting Standard(AS) issued by ICAI and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that the assessee has claimed the amount of lease equalization charges on the basis of guidance note issued by ICAI and has disclosed all material facts in its Profit and Loss Account and balance sheet filed along with the return of income. We further find that on this issue the coordinate benches of the Tribunal (supra) have allowed the similar claim. We further find that on the similar issue the Tribunal in the case of Swift Finlease (India) Ltd.(supra) and M/s Lord Krishna Bank Ltd.(supra) has deleted the similar penalty. In the absence of any distinguishing features brought on record by the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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