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2004 (6) TMI 629 - ITAT DELHI

2004 (6) TMI 629 - ITAT DELHI - TMI - IT Appeal No. 742 (Delhi) of 2000 - Dated:- 14-6-2004 - N.K. KARHAIL, JUDICIAL MEMBER AND B.R. JAIN, ACCOUNTANT MEMBER. Rajnath Kumar for the Appellant. Santosh K. Aggarwal for the Respondent. ORDER N.K Karhail, Judicial Member. - This appeal of the Revenue is directed against the order dated 26-10-1999 passed by CIT(A), New Delhi for the assessment year 1996-97. In substance, all the grounds of appeal relate to the order cancelling penalty imposed under sec .....

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ing, 53, Friends Colony, New Delhi was withdrawn vide letter dated 12-8-1998. It further stated that the income was revised to ₹ 1,35,22,796 by withdrawing the claim of depreciation of ₹ 22,84,484. Thus, the penalty under section 271(1)(c) would not be leviable. However, the explanation of the assessee did not find favour with the Assessing Officer. He observed that the assessee had claimed depreciation on the building which was never used for business purposes. The Assessing Officer .....

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ted for reasons more than one. In the first place, the Assessing Officer is not justified in saying that withdrawal of claim of depreciation allowance made voluntarily during the assessment year cannot be treated at par with a revised return. What is necessary in both the cases is to find out whether the revision either by way of filing of the revised return or by way of filing computation is voluntarily or not. There is no evidence to say that the revised computation made by the assessee was no .....

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nds Colony, New Delhi during the assessing year 1995-96. The assessee was carrying on business for a long time business. The building was purchased for being used of its office. Therefore, even if it is presumed that building so purchased was not effectively utilized for the purpose of business, still in terms of various judicial decision wherein it has been held that even passive user of an asset in a business qualifies for the grant of depreciation, it must be held that the assessee was entitl .....

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of electricity charges of ₹ 11,535 on March 27 for the period October 1995 onwards. The assessee has also produced letters from its correspondence to show that Mr. J.B.D. Goel, General Manager, Ashoka Merchantile Ltd. and Shri Sharma were transacting the business of the company from the premises 53, Friends Colony, New Delhi. These letters have been addressed to Mr. Goel and Mr. Sharma, the user of the premises by business associates of the assessee on 3-12-1994, 11-12-1994 and on date 19- .....

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the levy of penalty. Penalty of ₹ 12,00,000 deleted. Appeal is allowed." 4. Being aggrieved, the Revenue has come up in appeal before the Tribunal. The Ld. DR has submitted, that the CIT(A) has failed to take note that in the immediately preceding assessment year, i.e., assessment year 1995-96, the Assessing Officer had totally demolished the claim of the assessee that the impugned building on which the depreciation was claimed was never used for the purposes of business. It is for th .....

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itted that the assessee purchased the impugned land and building sometimes in 1994 and the same was leased out to M/s. Modipon Ltd. in October 1995. For the assessment year 1995-96, the return of income was filed claiming depreciation thereon amounting to ₹ 25,53,870. However, in the assessment proceedings, the same was disallowed. In order to buy peace, the assessee got the dispute relating to the claim of depreciation on the impugned building for assessment year 1995-96 settled under the .....

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f the assessee establishes that there was no mens rea or concealment of income on the part of the assessee. In this regard, he has made a reliance on the decision of Qammar-Ud-Din & Sons v. CIT, New Delhi reported in 129 ITR 703. He has further submitted that the claim of depreciation was revised by withdrawing the aforesaid claim on its own violation before the concealment or furnishing of inaccurate particulars getting detected in the course of the assessment proceedings for the year under .....

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509 (Mad.). 6. The Ld. Counsel for the assessee has further submitted that the assessment order would show that the Assessing Officer has not recorded any satisfaction for initiation of the proceedings under section 271(1)(c) of the Act. Thus, in view of the decision of the jurisdictional High Court in the case of CIT v. Ram Commercial Enterprises Ltd. reported in 246 ITR 568 (Delhi), the impugned penalty is liable to be quashed. 7. We have heard the parties and perused the materials on record. .....

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on the impugned building. It is further seen that the Assessing Officer vide its letter dated 7-8-1998, asked for certain clarification with regard to other issues and not for claim of depreciation. The Assessing Officer only sought explanation with regard to claim of depreciation only on 8-12-1998. It seems that the Assessing Officer appears to have raised query only when the assessee took necessary steps for getting the dispute with regard to depreciation settled under the Kar Vivad Samadhan S .....

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