TMI Blog2011 (8) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... der. In the course of assessment proceedings the depreciation was accordingly restricted to 50% of the claim of ₹ 11,76,788/- thereby allowing only an amount of ₹ 5,88,394/-. The A.O. initiated penalty proceedings and levied penalty of ₹ 2,11,086/-. It was the submission of the assessee in the penalty proceedings that the trucks were purchased in August and September 2003 and in the company s schedule also they were stated as purchased in August and September 2003 and therefore under a bonafide mistake they have claimed full depreciation. The A.O. enquired about the purchase of trucks. The details were furnished, which indicated that the trucks were registered on 14th October 2003 and insured on 16th October 2003 and the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat assessee is in the business of transportation and purchased three trucks in the month of August and September and they were given for body building in September 2003 itself and accordingly entered in company s account as having purchased in August and September 2003 and in support furnished the schedule as per company s books of account. It was the submission that when the A.O. enquired about the claim of depreciation assessee furnished all the details including copies of the RC Book wherein it has come to the knowledge that the trucks were actually registered in October 2003 and where used subsequently. Therefore when the A.O. disallowed the claim assessee accepted the same. It was submitted that the claim was a bonafide mistake in cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s spent an amount of ₹ 7,70,731/- for building bodies of the above trucks. Even though the actual completion of the work was not on record but the schedule in company s account indicates that these were reported to have been completed before 30th September 2003 and accordingly shown in the schedule as such. As can be seen from other details, the trucks were registered with the authorities on 14th October 2003. Therefore it can be stated that the trucks were ready for use before that date. It can also be considered that the RTO authorities will take some time in registering the vehicles, which was ultimately done on 14th October. Therefore the trucks could have been ready any time before 14th October 2003. The first receipt of income d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med depreciation for the full year, there was a bonafide mistake while filing the return which did not involve any concealment of income or furnishing of inaccurate particulars and does not attract penalty. The Hon ble Delhi High Court in the case of CIT vs. Bhrahmaputra Consortium Ltd. 2011-TIOL-470-HC-DEL-IT also held that when the assessee accepts that excess depreciation was claimed inadvertently and the same being disallowed by the A.O. penalty under section 271(1)(c) is not warranted. 7. Hon'ble Supreme Court in the case of cit vs. Reliance Petrochemicals Ltd. 322 ITR 158 also held that a mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars regarding the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake in claiming full depreciation on the reason that the trucks were purchased before 9th September 2003. The date of body building were shown by the CIT(A) as 10th November 2003. This itself does not establish that the body building was done later as the registration of the trucks was done on 14th October 2003 itself. There can be no registration without body being built. Since we are of the opinion that there is a bonafide mistake in claiming higher depreciation, respectfully following the principles established as stated above, we have no hesitation in cancelling penalty levied under section 271(1)(c). The grounds raised by the assessee are allowed. 9. In the result, appeal is allowed. Order pronounced in the open court on 24t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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