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Uttaranchal Jal Vidyut Nigam Limited Versus DCIT, Circle 2, Dehradun

2016 (3) TMI 646 - ITAT DELHI

Penalty u/s 271(1)( c) - depreciation on assets claimed at a higher value - Held that:- Admittedly in the case before us, the assessee was in receipt of capital subsidy which had to be adjusted against the cost of assets purchased during the year and the depreciation on such assets had to be allowed on reduced value. The assessee had declared the complete information in respect of the said transaction in the return of income. However, under bona fide impression, the depreciation on assets had be .....

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DY, ACCOUNTANT MEMBER AND SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri Rakesh Gupta, FCA, Shri Somil Agarwal, CA For The Respondent : Shri O.P. Meena, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER This present appeal preferred by the assessee arises out of the order dated 3.2.2012 passed by the ld. CIT(A)-I, Dehradun wherein the assessee has disputed the confirmation of the imposition of penalty u/s 271(1)( c) of Income Tax Act, 1961 (hereinafter called The Act ) a .....

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see on assets acquired out of grant and subsidies received from the state government. It is an accepted fact that the assessee withdrew the ground of appeal relating to the impugned addition before the Ld. CIT(A). 3. Ld. AR submitted that the assessee had received grant from the State Government for the development and modernization of large and small Hydro Power Projects in the state and the grant was utilised to create assets on which depreciation was claimed. He submitted that this fact was n .....

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s capital reserve in the balance sheet. He relied on the decision of the Hon'ble Apex Court in the case of CIT vs Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (Hon'ble Supreme Court) and also on the following decisions of the coordinate Benches of the Tribunal :- i) DCIT vs Gujarat State Forest Development Corporation Ltd. in I.T.A. No. 3294/Ahmedabad/2009 ii) ITO vs Twinkle Techplast Pvt. Ltd. in I.T.A. No. 2208 & 2209/Ahmedabad/2012 iii) NL Engineering Pvt. Ltd. vs DCIT in I.T.A. N .....

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o warrant levy of penalty under section 271(l)(c) of the Act. 6. The Hon'ble Supreme Court of India in the case of CIT, Ahemdabad Vs. Reliance Petroproducts Pvt. Ltd. (supra), while referring to the word particulars in inaccurate particulars of income , observed, as per Law 'Lexicon, the meaning of word particular is a detail or details, the details of a claim, or the separate items of an account. Therefore, the word particulars" used in Section 271 (l)(c) would embrace the meaning .....

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Such not being the case there would be no question of inviting the penalty under section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to inaccurate particulars. 7. The Hon'ble Supreme Court in CIT, Ahemdabad Vs. Reliance Petroproducts Pvt. Ltd (supra) further noted that in the facts of the case before it, there .....

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is not to levy penalty u/s 271 (l)(c) of the Act in case of every non acceptance of claim made by the assessee in the return of income. 8. The Hon'ble Supreme Court in CIT Vs Reliance Petroproducts P. Ltd. (supra) further held as under : Reading the words "inaccurate" and "particulars" in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. In this case, there is no finding that .....

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well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not attract the penalty under s. 271(1)(c). If the contention of the Revenue is accepted then in case of every return where the c .....

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