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2016 (2) TMI 167 - ITAT CHENNAI

2016 (2) TMI 167 - ITAT CHENNAI - TMI - Penalty under Section 271(1)(c) - bogus transaction of sale and purchase of asset - Held that:- The assessee is a banking company and claimed before the Assessing Officer that it entered into the sale and lease back transaction. The claim of the assessee that the asset was originally belonged to a particular person, was proved to be wrong. In fact, the invoices were forged in the name of the assessee. On examination, the suppliers of the asset confirmed th .....

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sessee.

Therefore, it is a clear case of furnishing inaccurate particulars in the form of forged invoices and thereby concealed the particulars of income of the assessee. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly confirmed the penalty levied by the Assessing Officer under Section 271(1)(c) of the Act. This Tribunal do not find any reason to interfere with the order of the lower authority. - Decided against assessee - ITA No.1589/Mds/2010 - .....

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t the Assessing Officer levied penalty under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act') by an order dated 28.03.2006 on the ground that the assessee has failed to make true and correct statement of income and concealed the particulars of its income by claiming bogus depreciation. The Ld.counsel further submitted that the assessee claimed for depreciation to the extent of ₹ 17,27,16,480/- being 50% depreciation on the asset which was purchased and leased out .....

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the assessee, the Assessing Officer further found that during the assessment year 1995-96, a similar transaction of purchase and lease back was entered in the case of 14 parties and the Assessing Officer found that the entire transactions in the assessment year 1995-96 were bogus. For the year under consideration also, the Assessing Officer on examination, found that no sale could have been made by the third party to the assessee-bank without the sanction of Tamil Nadu Electricity Board. Accordi .....

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riminal cases are pending against them. As far as the assessee is concerned, the Ld.counsel submitted that the copies of the invoices were produced before it. On the basis of the invoices, the assessee believed in good faith that the assets were owned by the respective persons. Accordingly, the assessee purchased the same and leased it back to the respective persons. Therefore, the claim of the assessee for depreciation cannot be construed as bogus. The assessee never intended any transaction wi .....

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articulars of income. Therefore, the CIT(Appeals) is not justified in confirming the penalty levied by the Assessing Officer under Section 271(1)(c) of the Act. 3. On the contrary, Dr. Milind Madhukar Bhusari, the Ld. Departmental Representative, submitted that the assessee claimed before the Assessing Officer that it purchased windmill and leased back the same to M/s Aban Lloyd Chiles Offshore Ltd. Similarly, the assessee has also claimed 14 transactions as sale and lease back in the assessment .....

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e transactions were bogus and the transactions were considered to be finance transactions, therefore, the assessee is not entitled for depreciation. 4. Coming to the transaction with M/s Aban Lloyd Chiles Offshore Ltd. with reference to windmills, the Ld. D.R. submitted that the land on which the windmills were erected was not transferred to the assessee. The sanction for erection of windmills stands in the name of M/s Aban Lloyd Chiles Offshore Ltd. On examination, the Assessing Officer found t .....

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Steel Ltd., the Assessing Officer found that M/s Mid East Integrated Steel Ltd. purchased the assets earlier and thereafter forged the sale invoices by inserting the name of the assessee as buyer. The Assessing Officer examined the supplier and the supplier clarified during the course of examination that he has not issued any such invoice to the assessee as claimed before the Assessing Officer. Since the transaction was established as bogus, the assessee itself came forward by a letter dated 30 .....

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d. D.R. submitted that the CIT(Appeals) has rightly confirmed the addition. 5. We have considered the rival submissions on either side and perused the relevant material available on record. The Assessing Officer disallowed the claim of depreciation on the windmill leased to M/s Aban Lloyd Chiles Offshore Ltd. to the extent of ₹ 4,95,00,000/-. Moreover, in respect of transactions with M/s A.V.S. Industries Ltd. and M/s Mid East Integrated Steel Ltd., the Assessing Officer himself allowed th .....

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e by the Assessing Officer on the basis of the enquiries conducted. 6. Now, the question arises for consideration is whether the assessee has furnished inaccurate particulars of its income or concealed the particulars of its income. The fact remains that the assessee is a banking company and claimed before the Assessing Officer that it entered into the sale and lease back transaction. The claim of the assessee that the asset was originally belonged to a particular person, was proved to be wrong. .....

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