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TMI Blog2003 (4) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts circumstances and legal provisions, do not justify the imposition of the penalty under section 271(1)(c) of the Income-tax Act, 1961? 3. When a clear case was made out by the Income-tax Officer that the assessee had furnished inaccurate particulars of income and he imposed a penalty of Rs. 1,60,000 with the approval of the Inspecting Assistant Commissioner and when the Commissioner of Income-tax (Appeals) had declined to interfere with the decision of the Income-tax Officer, was the Appellate Tribunal justified in law in deleting the penalty? 4. Whether the finding of the Tribunal that penalty under section 271(1)(c) of the Income-tax Act, 1961 is not justified, is correct in law and sustainable from the material on record?" The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsent between the assessee and the retiring partners. The Income-tax Officer held that cost of the assets shown by the assessee was not acceptable and the assessee was not entitled to claim any depreciation on the land. The Income-tax Officer allowed depreciation on the building which was valued at Rs. 4.62 lakhs and also depreciation on movables on the basis of the written down value of the articles. Depreciation of Rs. 86,380 as against the claim of Rs. 2,37,852 was allowed and proceedings under section 271(1)(c) of the Income-tax Act were initiated. The Commissioner of Income-tax (Appeals) upheld the Income-tax Officer's order in restricting the claim for depreciation and the Tribunal also upheld the order of the Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on had no application to the facts of the case. Since the assessee had shown the value of building with land at Rs. 16,50,000 while the value of superstructure was shown at Rs. 4,62,000 and the land at Rs. 10,68,900 on the basis of the valuer's report, even if the authority held that depreciation was admissible only on the value of the superstructure, it cannot be said that the assessee had furnished inaccurate particulars of income with a view to get any unfair advantage, As regards movables, it was held that the assessee was required to show in the return the actual cost of the assets acquired for the purpose of depreciation and it was open for the Income-tax Officer to substitute the amount which according to him was reasonable in lieu o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner was satisfied in the course of any proceedings under the Act that there has been concealment of income. If he is satisfied as per clause (c) of section 271(1) that any person has concealed the particulars of his income or has furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty the sum mentioned in sub-clause (iii) of clause (c). It was held that the penal provision would operate when there is a failure of duty to disclose fully and truly particulars of income. In the context of the claim for depreciation for building which was fixed at Rs. 16.50 lakhs it appears that during the enquiry by the Income-tax Officer the assessee gave an explanation that he had put a claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad sufficient material before him to decide whether to allow depreciation on the written down value or to accept higher value paid for such used goods. It would, thus, be seen that since the assessee had not claimed the entire sum of Rs. 16.50 lakhs for only the superstructure but had claimed it for building as well as land and given a break up of the price of the superstructure and the land on the basis of the valuer's report and as regards movables it had given particulars of the items, their original price and written down value, it cannot be said that there was any concealment of material particulars from the Income-tax Officer during the proceedings. The Tribunal was, therefore, right in deleting the penalty imposed on the assessee un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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