TMI Blog2015 (6) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned assessment year, no capital gain had arisen to be taxed on account of handing over the windmills back to the owner. All these facts indicate that the assessee has not furnished any inaccurate particulars of income. The present does not seem to be an instance of evasion of taxable income. We reiterate that quantum and penalty proceedings under the Act stand on a different footing and each and every disallowance/addition does not lead to automatic imposition of penalty as held by hon’ble apex court in Reliance Petroproducts Ltd. (2010 (3) TMI 80 - SUPREME COURT ). Therefore, we hold that the Assessing Officer had wrongly held assessee’s case as that of furnishing of inaccurate particulars of income under section 271(1)(c) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) s order. 3. Brief facts of the case are that the assessee had claimed depreciation relief on wind mills of ₹ 2.40 crores. It would also claim deduction of interest payment amounting to ₹ 60,892/- towards unsecured loans and freight payment in cash of ₹ 8,63,903/-. The Assessing Officer found that the assessee had not become owner of the windmills in question so as to claim depreciation relief. And that it had advanced interest bearing loans without charging any interest. He also found that its freight payments made in cash violated section 40A(3) of the Act. This made him to disallow all the three claims in assessment order dated 18.3.2004. He also initiated penalty proceedings against the assessee under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also made the payment of purchase consideration. The proceeds of electricity generated through this windmill were also offered as income by the appellant. All these documents along with the documents submitted by the appellant for transferring the windmill in its name were submitted. It is clear that except the transfer of windmill in the name of appellant, all other procedures and paperwork were completed. Appellant claimed depreciation on the windmill by treating itself beneficial owner of the windmill. Several decisions allowed claim of depreciation in case of beneficial ownership including apex court decision in the case of Mysore minerals Ltd. However requirement of transfer was there as per MOU in this case, the transfer could not ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill the depreciation was claimed by the appellant. When the matter regarding transfer of name is pending, appellant cannot reverse the transaction in its books even after ^completion of three months as mentioned in MOU. When income as a result of this transaction has been offered for taxation, payment has been made, the depreciation claimed on such transaction cannot be considered false or inaccurate. Considering the fact that several judicial decisions allowed depreciation even in case of beneficial ownership, appellant cannot be found fault with claim of depreciation on windmill for which it has made payment and received income. The recent decisions of Supreme Court relied upon by the appellant supports the view of the appellant that mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not submit any reason for claiming capital expense as revenue therefore on this issue appellant is liable for penalty. Penalty levied by the assessing officer on this addition is confirmed. 6. We have heard the parties and gone through the case file. The Revenue invites our attention to assessee s depreciation claim. It transpires that the assessee has already placed on record sufficient evidence of payments of ₹ 2.40 crores being made to the vender entity along with copy of the purchase deed. It also applied for State government s approval. Even the Revenue is fair enough not to dispute these facts. The assessee acquired these windmills in March, 2000. It also declared power generation income of ₹ 9,44,146/-. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two owners of the property simultaneously and in the same sense of the term. The intention of the Legislature in enacting section 32 would be best fulfilled by allowing deduction in respect of depreciation to the person in whom for the time being vests the dominion over the building and who is entitled to use it in his own right and is using the same for the purposes of his business or profession. Assigning any different meaning would not subserve the legislative intent. To take the case at hand it is the appellant-assessee who having paid part of the price, has been placed in possession of the houses as an owner and is using the building for the purpose of its business in its own right. Still the assessee has been denied the benefit of se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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