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L & T Finance Limited Versus Assistant Commissioner of Income Tax, Circle 2 (2) , Mumbai

2016 (10) TMI 5 - ITAT MUMBAI

Penalty under Section 271(1)(c) - disallowance of depreciation in respect of assets given under finance lease by treating the lease transaction as finance transaction - Held that:- As decided in assessee's own case for the instant assessment year 2002-03 under appeal by holding that the assessee is entitled to claim depreciation in respect of assets given under ‘sale and lease back basis’ The AO was directed to withdraw the corresponding benefit given to the assessee by excluding the value of ca .....

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apital component of the lease rent from the income of the assessee. The Tribunal has also allowed the afore-stated relief for assessment year 2000-01 to 2003-04 in assessee’s own case - The Tribunal has also deleted the penalty levied by the AO and as sustained by learned CIT(A) on the disallowance of the assessee’s claim of depreciation in respect of assets given under ‘sale and lease back basis’ for the assessment years 1995-96 to 1999-00 . Under the above circumstances, we are of the cons .....

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favour of assessee. - I .T.A. No. 3606/Mum/2014 - Dated:- 17-8-2016 - SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Ms. Heena Sheth For The Revenue : Shri A Ramachandran ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee company, being ITA No. 3606/Mum/2014, is directed against appellate order dated 05th February, 2014 passed by learned Commissioner of Income Tax (Appeals)- 5, Mumbai (hereinafter called the CIT(A) ), fo .....

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case and in law, the learned CIT(A) erred in upholding the penalty under Section 271(1)(c) of the Income-tax Act,1961 relating to the disallowance of depreciation in respect of assets given under finance lease by treating the lease transaction as finance transaction. 2. Without prejudice to ground no. 1 above, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in levying penalty on the gross disallowance of depreciation instead of the net disallowance ( i.e. d .....

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8377; 30,29,07,166/- which included depreciation of ₹ 28,76,04,152/- on assets pertaining to various lease transactions entered into by the assessee during the previous year as well earlier years. In respect of the assets given on lease in earlier years, the depreciation of ₹ 19,10,02,606/- was claimed during the year. It was observed that except for the assessment year 1997-98 , the lease transaction of the assessee had been held to be financial transaction in the assessment year 19 .....

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ceedings. Similarly , claim of depreciation for leased asset of ₹ 9,66,01,546/- with respect to assets given on lease during the year also stood disallowed in quantum assessment proceedings vide assessment order dated 20.01.2005 passed by the AO u/s 143(3) of the Act. The learned CIT(A) confirmed the quantum disallowance vide appellate orders dated 07-04-2010 whereby appeal of the assessee was dismissed in quantum proceedings.The penalty proceedings were initiated u/s 271(1)(c) of the Act .....

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evaded vide penalty order dated 30th March 2012 passed u/s 271(1)(c) of the Act which was confirmed by the learned CIT(A) vide appellate orders dated 05.02.2014 . The learned CIT(A) observed that the AO has computed penalty u/s 271(1)(c) of the Act on the amount of ₹ 6,15,01,776/- with respect to which the assessee furnished the inaccurate particulars of income, while the assessee infact furnished inaccurate particulars of income of ₹ 27,29,02,417/- which ought to have been consider .....

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/Mum/2011 vide orders dated 05-05- 2015 for impugned assessment year 2002-03 under appeal has decided the issue in assessee s favour in quantum whereby the Tribunal has held that the assessee is entitled to claim depreciation in respect of the assets given under sale and lease back basis and hence since quantum is decided by the Tribunal in favour of the assessee, the penalty order will not survive. It was submitted that Tribunal has in ITA No. 6991-6994/Mum/2011 vide common orders dated 05.05.2 .....

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to 1999-00 following the judgment of Hon ble Supreme Court in the case of ICDS Limited v. CIT 350 ITR 527(SC). It was also submitted that the Tribunal has vide common order dated 19/03/2015 in ITA No. 5283- 5285/Mum/2012 for assessment years 1995-96 to 1997-98 in assessee s own case deleted the penalty levied u/s 271(1)(c) of the Act by the Revenue on disallowance the claim of depreciation on assets given on sale and lease back basis . All the afore-stated orders of the Tribunal were submitted .....

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sessee is entitled to claim depreciation in respect of assets given under sale and lease back basis The AO was directed to withdraw the corresponding benefit given to the assessee by excluding the value of capital component of the lease rent from the income of the assessee. The Tribunal has in the assessee s own case has also allowed the assessee s claim of depreciation in respect of assets given under sale and lease back basis for the assessment years 1995-96 to 1999-00 in MA No. 420 to 422/Mum .....

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