TMI Blog2008 (12) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... out appreciating the fact that the assessee had knowingly claimed higher depreciation @ 25% as against 20% to which the assessee was entitled and hence the AO had disallowed this depreciation as merely giving the car on lease does not tantamount to hiring of car which gives the right to assessee to claim depreciation @ 25% and thus the assessee has filed inaccurate particulars attracting Explanation 1 to Section 271(1)(c). 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the penalty levied by the assessee on disallowance of provision for doubtful debts amounting to ₹ 60,73,006/- which has been added back by the AO in view of Explanation to Sec. 36(1)(vii) wherein it has provided tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch higher depreciation vide Note No. 4. The first appellate authority considered the suo motu letter filed by the assessee which is dated 22.03.2003 withdrawing the excess claim of depreciation, on the ground that the jurisdictional High Court in the case of Kotak Mahindra Finance Ltd vs CIT 268 ITR 114 held that the assessee is entitled to only 20% depreciation. Thus on the ground that the assessee's action is bona fide and there is full disclosure and also on the ground that mere rejection of assessee's explanation does not tantamount to concealment of income or furnishing inaccurate particulars. The first appellate authority cancelled penalty. The first appellate authority relied on the judgment of the Hon'ble Delhi High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by the assessee, the CIT(A) cancelled the penalty levied on this item also on the ground that there was neither a concealment nor filing of inaccurate particulars of income. 5. Aggrieved, the revenue is in appeal before the Tribunal. 6. None appeared on behalf of the assessee despite issue of notice. There is no power of attorney filed authorizing any counsel. There was a petition seeking adjournment. As we are of the considered opinion that this is not a fit case for grant of adjournment, we dispose of the appeal exparte on merits after hearing the learned departmental representative. 7. Heard Shri Ankur Garg, the learned departmental representative. On the facts that have been already narrated above, we are of the considered o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. This very reference to the Delhi Special Bench decision abundantly proves that the issues under consideration were highly debatable ones. The explanation offered by the assessee was a bona fide explanation. In this back drop we find the decision of the first appellate authority is in conformity with the following case laws: 7.1 The Hon'ble Supreme Court in the case of CIT vs Suresh Chandra Mittal 251 ITR 9 (SC) held that penalty need not be levied when an explanation has been offered by the assessee and where the explanation is found not to be false and is bonafide. 7.2 The Hon'ble Delhi High Court in the case of CIT vs Freementle India Television Production P Ltd (2007) 294 ITR 88 (Del) was considering a similar case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly held that the assessing officer is required to arrive at a finding that the explanation offered by the assessee, in the event he offers one, was false. He must be found to have failed to prove that such explanation was not only not bona fide but all the facts relating to the same which are material to the income were not disclosed by him. Thus apart from his explanation being not bona fide, it should be found as a fact that he has not disclosed all the facts which were material for the computation of his income. 8. Applying the above propositions laid down by the Apex Court and High Courts, to the facts of the case on hand, we uphold the order of the first appellate authority and dismiss the appeal filed by the revenue. 9. Order pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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