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2016 (8) TMI 611 - GUJARAT HIGH COURT

2016 (8) TMI 611 - GUJARAT HIGH COURT - TMI - Levy of penalty under Section 271(1)(c) - claim of depreciation - Held that:- Claims have been disclosed by the assessee by way of Notes No.4 and 7 to the Balance sheet and considering the authorities cited at the bar by the learned Counsel for the assessee, this Court is the opinion that this will not amount to concealment and therefore will not attract penalty. We are in complete agreement with the view taken by the CIT (A). Accordingly, Tax Appeal .....

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gs of the CIT (A) and confirmed the order of AO. 2. The short facts of the case are that the assessee has filed its return of income on 30/11/1998 declaring the total income at ₹ 2,70,35,810/- and the order under Section 143 (3) of the IT Act came to be passed determining the total income at ₹ 3,03,37,294/- and made following disallowance of ₹ 17,54,739/- in respect of depreciation on technical knowhow, ₹ 10,95,515/- in respect of custom duty and ₹ 8,33,185/- in res .....

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nalty under Section 271 (1)(c) in respect of two items of disallowance upheld by the Tribunal (i) ₹ 17,54,739/- in respect of depreciation on technical knowhow and ₹ 8,33,185/- in respect of interest paid on APSEB where the Tribunal restored the penalty insofar as it relates to the disallowance of depreciation in respect of technical knowhow of ₹ 17,54,739/- is concerned which has given rise to the present appeal. 3. While admitting this appeal, following substantial question o .....

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omputation of depreciation is claimed on the basis of return of income filed in earlier assessment years. The claim of depreciation on technical knowhow disallowed in Assessment Year 1989-90 and subsequent assessment year has not been considered as the same is being contested in appeal before Income Tax Appellate Tribunal. 5. The deduction available under section 35AB is calculated as under: [a] In respect of technical knownow acquired in 93-94 (Rosernmudn A.G.) 1st Installment 1/5th ₹ 123 .....

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50 Total 17,12,743 6. Clause7 in the Notes with regard to interest reads as under: 7. AS per City Civil Court decree dated 16/12/94, the assessee has to pay 12% interest on damages payable ₹ 69,43,209/- . The Andhra Pradesh State Electricity Board. The interest payable ₹ 8,33,185/- for the year has not been provided in the books of accounts. Since, the assessee is following mercantile system of accounts, the interest payable is allowable business expenditure on accrual thereof. 4.1 L .....

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ant had not concealed the particulars of its income or filed inaccurate particulars of income consciously and deliberately and has disclosed everything before the Assessing Officer in respect of the claim of technical knowho and as facts in this year are similar to A.Y. 1989-90 and as the penalty has been deleted by the Tribunal for A.Y. 1989-90, for the said reasons in respect of technical knowhow, I hold that it is not a fit case for levy of concealment penalty in respect of this addition. 2.3 .....

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. In A.Ys. 1995-96 to 1997-98 the disallowance of claim of damage and interest was made by A.O. and the same was allowed by CIT (A) and the matter is pending before I.T.A.T. In respect of the disallowance, no penalty has been initiated in A.Y. 1995-96 and it was submitted by the Counsel that the matter has been finalized by the Supreme Court and the Hon'ble S.C. has confirmed the order of the City Civil Court in respect of the claim of damages made by the Andhra Pradesh Electricity Board in .....

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furnishing of inaccurate particulars and the appellant had disclosed everything before the Assessing Officer. Hence, I do not find it to be fit case for levy of concealment penalty in respect of the disallowance of interest. Accordingly, the penalty levied is cancelled in respect of the claim of interest. Further I find that there was no proper satisfaction recored by the Assessing Officer for initiation of penalty. The penalty has been initiated only at the end of the assessment order which wa .....

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Tribunal. He has contended that in view of decision in case of Commissioner of Income-tax, Ahmedabad v. Reliance Petroproducts (P) Ltd., [2010] 189 Taxman 322 (SC) whereby the issue of penalty imposed under Section 271(1)(c) of the Act was considered for concealment of income and held in favour of the assessee. 4.3 Learned Senior Counsel has also drawn attention of this Court to a decision of this Court in case of Geeta Prints (P.) Ltd. v. Assistant Commissioner of Income-tax [2013] 33 taxmann.c .....

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