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TMI Blog2014 (9) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... That the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the imposition of penalty under section 271(l)(c) on disallowance of depreciation of Rs. 3,30,900/- claimed on capital subsidy which is arbitrary and unjustified. 2. That no penalty under section 271(l)(c) of the Act is called for in as much as there has neither been any concealment of income nor furnishing of inaccurate particulars of income as such the order is unjustified and arbitrary. 3. That the order of the Ld. Commissioner of Income Tax is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable. 3. The only issue raised in the present appeal is against levy of penalty under section 271(1)(c) of the Act at Rs. 330,900/-. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reduced cost of assets. However, the assessee had claimed depreciation on the full value of the assets. The Assessing Officer reworked the value of the assets and made an addition of Rs. 330,900/- by reducing the cost of capital subsidy to the cost of assets and thereafter, reducing the filing of depreciation allowable in the hands of the assessee. The Assessing Officer and the Commissioner of Income Tax (Appeals) were of the view that the assessee had furnished inaccurate particulars of income and as the issue was not debatable, penalty under section 271 (1) (c) of the Act was leviable on the said addition. 9. Penalty under section 271(1)(c) is leviable in cases where the assessee has either concealed its income or furnished inaccurat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in CIT, Ahemdabad Vs. Reliance Petroproducts Pvt Ltd (supra) further noted that in the facts of the case before it, there were no findings that any details supplied by the assessee in its return of income were not incorrect or erroneous or false nor any statement made or any details supplied was found to be factually incorrect. The Court thus held that merely because the assessee had claimed the expenditure, which was not accepted or was not acceptable to the Revenue, that by itself would not, attract penalty under section 271 (1)(c) of the Act. It was also laid down by the Court that the intendment of the Legislature is not to levy penalty u/s 271 (1)(c) of the Act in case of every non acceptance of claim made by the assessee in the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislature. The Tribunal, as well as, the CIT(A) and the High Court have correctly reached this conclusion.-Sree Krishna Electricals vs. State of Tamil Nadu & Anr. (2009) 23 VST 249 (SC) applied; Reliance Petroproducts (P) Ltd. (judgment dt. 23rd Oct., 2007 of the Gujarat High Court in Tax Appeal No. 1149 of 2007) affirmed. 13. Admittedly 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 bonafide impression, the depreciation on assets had been claimed at a higher va ..... X X X X Extracts X X X X X X X X Extracts X X X X
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