TMI Blog2016 (7) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal of the assessee is directed against order dated 12/08/2013 of learned Commissioner of Income-tax (Appeals)-XII, New Delhi, for assessment year 2007-08, in respect of penalty levied under section 271(1)(c) of the Act, raising following grounds: 1. That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. Assessing officer in levying the penalty of ₹ 69,10,800/- without assuming jurisdiction as per law and the impugned penalty order being illegal and void ab-initio. 2. That having regard to the facts and circumstances of the case, the Id. CIT(A) erred in law and on facts in affirming the impugned penalty order being contrary to law as the assessment order framed under section 143(3) dt. 24- 12-2009 was also illegal, beyond jurisdiction and void ab-initio. 3. That having regard to the facts and circumstances of the case, the Id. CIT(A) erred in law and on facts in confirming the levy of penalty under section 271 (1 )(c) on the addition made in the assessment order under section 143(3) dtd. 24-12-2009 as the same addition is also contrary to law and facts. 4. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the excess depreciation claimed was based on its information from a news appeared in Financial Express and moreover all the factual information was furnished correctly and, therefore, the assessee could not be said to have disclosed inaccurate particulars of income. The Assessing Officer, however, levied penalty under section 271(1)(c) of the Act at the rate of hundred percent of the tax sought to be evaded which amounted to ₹ 69,10,800/-. On appeal, the learned Commissioner of Income-tax (Appeals) also confirmed the penalty levied. Aggrieved, the assessee is in appeal before the Tribunal. 3. The grounds no. 1 to 5 raised by the assessee are in respect of the penalty levied of ₹ 69, 10, 800/-. 3.1 At the outset, the ld. Authorized Representative of the assessee submitted that in assessment year 2006-07 also penalty of ₹ 1,91,33,400/- was levied by the AO on account of excess claim of depreciation of ₹ 5,42,93,162/- under TUF Scheme and capital subsidy of ₹ 25,50,000/- which was deleted by the Tribunal Delhi bench in order dated 01/02/2016 in ITA No. 4927/Del/2012 and, therefore, the issue being identical and bonafide mistake on the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008 dated 23-12-2010. 10. We have heard the rival submissions and perused the material on record. The factual position on the basis of assessment orders and submissions that emerges is that assessee had availed loan from bank under TUF Scheme for purchase of machinery. As per Income Tax Rules, Appendix I, Part-Ill, itemNo.6, machinery and plant used in weaving, processing and garment sector of textile industry, which is purchased under TUFS on or after 1st April, 2001 but before 1st April, 2004 and is put to use before 1st April, 2004 are eligible for depreciation @ 50%. It is an undisputed fact that assessee is in the business of manufacturing of texturised yarn and had purchased machinery by availing loan under TUFS scheme. The assessee was under a bonafide belief that since it has purchased machinery by availing loan from Bank under TUF Scheme, it was eligible for depreciation @ 50% on the machinery purchased. The claim of depreciation was not altogether bogus. The dispute was only with respect to the rate of depreciation. The belief of the assessee is not found to be untrue or false by the A.O. On these facts it cannot be said that assessee has furnished inaccurate particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and affirm the findings of the Ld. CIT (A). 11. Since the facts in the present case are identical to that of Eagle Synthetics Private Limited (supra) and since nothing has been brought on record, to the contrary by the Revenue and relying on the decision of Hon ble Apex Court in the case of Reliance Petroproducts (supra) we do find any reason to interfere in the order of the CIT (A). 10. Furthermore, in the case of Piparia Syntex Pvt. Ltd Vs. ITO, the ITAT Ahmedabad B Bench deleted the penalty on similar issue of excess claim of deprecation on TUF Scheme with the following findings: 2. Brief facts of the case are that during the course of assessment proceedings AO on verification of details filed by the assessee company observed that assessee has claimed depreciation on plant and machinery used in weaving, processing and garment sector which are purchased under TUFS on or after 18 ITA No. 4927/Del/2012 18 first day of April, 2004 are eligible for 50% depreciation. The assessee did not provide any details as if the machineries claimed to have been purchased during the year under consideration is covered by TUFS. In absence of any evidences/documents it could not be asce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether or not the assessee is entitled to higher rate of depreciation is highly debatable. In the case under consideration, it is apparent that all the relevant facts have been disclosed by the assessee. The only dispute is on interpretation of item 111(6) of Appendix 1 of the IT Rules, 1962. It is well settled that the criterion and yardsticks for the purpose of imposing penalty u/s. 271(1)(c) are different than those applied for making or confirming the additions. When the assessee has made a particular claim in the return of income and has also furnished all the material facts relevant thereto, the disallowance of such claim automatically lead to the conclusion that there was concealment of particulars of his income by the assessee or furnishing of accurate particulars of such income. What is to be seen is whether the said claim made by the assessee was bon-fide and whether all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty u/s. 271(1 )(c) of the Act. Since all the material facts relevant to the said claim had been furnished by the assessee, in our opinion it is not a fit case t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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