TMI Blog2018 (3) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Ajaib Singh & Co. [2001 (8) TMI 79 - PUNJAB AND HARYANA High Court] and other several decisions relied by the assessee before us including CIT vs. Reliance Petroproducts Pvt. Ltd (2010 (3) TMI 80 - SUPREME COURT). - Decided in favour of assessee. - ITA No. 4023/Del/2016 - - - Dated:- 15-3-2018 - SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. L. P. SAHU, ACCOUNTANT MEMBER For The Assessee : Sh. Sanjay Nath, CA For The Revenue : Sh. Atiq Ahmad, Sr. DR ORDER PER L.P.SAHU, ACCOUNTANT MEMBER This is an appeal filed by the assessee against the penalty order by the CIT(A) 7, New Delhi order dated 26.05.2016 for the assessment year 2009-10 on the following grounds of appeal :- 1. The action of the learned CIT(A) in upholding the penalty levied by DCIT Circle 14(1) of ₹ 2,22,240/- u/s 271(1)(c) is unjust, illegal, arbitrary, illusory and against the facts of the case and thus deserves to be deleted. 2. The action of the lower authorities in not following the case laws on the issue and in spite of legal precedents, still not quashing the penalty of ₹ 2,22,240/- is unjust, illegal, arbitrary, illusory and against the facts of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the company on its plant and machinery. The facts of the case are that during the relevant year the company had received capital subsidy from Ministry of Textiles to the tune of ₹ 40,60,000/-. The scheme of the Ministry in giving the subsidy to all eligible units was to encourage setting up of new units in the textiles sector in the state of Gujarat. Assessee had set up its unit in Surat, Gujarat. The subsidy was based on the cost of plant and machinery installed. However as stated earlier it was to encourage setting up of new plants and not as reimbursement of the cost of machinery installed by the assessee. b) The assessee created a capital reserve of Rs. 40.60,000/- in the balance sheet based on the decision of M/s P J Chemicals Ltd. given by the Supreme Court. It did not reduce the cost of the asset and claimed depreciation on the entire cost of plant and machinery installed . c)The AO did not accept the version of the assessee company and allowed depreciation after reducing the subsidy received as per definition of Actual cost given in section 43(1) of the Act. d) Thus the depreciation allowed by him was reduced by ₹ 14,21,000/- being 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, even if it is ultimately found to be legally unacceptable, cannot amount to furnishing of inaccurate particulars of income. Mere making of the claim, which is not sustainable in law, by itself, will not amount to conceal or furnishing inaccurate particulars regarding income of the assessee. This thought has now been confirmed by the Hon'ble Supreme Court in the case of CIT Vs Reliance Petro Product Pvt Ltd fcOlOl 322 ITR 158 (SC) . Under these circumstances, the addition accepted being bona fide, there is no concealment of income and as such no penalty u/s 271(1)(C) is leviable. 2. The disallowance of depreciation will not perse amount to furnishing inaccurate particulars for which reliance is placed in CIT Vs Aiaib Singh Com (253 ITR 630) (P H). Where no information, given in the return, is found to be incorrect or inaccurate, the assessee can not be held guilty of furnishing inaccurate particulars. 3. Hon'ble Apex Court in the case of Dilip N. Shroff Vs JCIT (291 ITR 519){SC) and Union of India Vs Dharmendra Textiles Processors (306 1TR 277HSC) clearly held that merely because assessee claimed expenditure, which claim was not ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . T. Ashok Pai v. CIT, Banglore Page 17 5. CIT v. Mahabaleshwar Gas Chemicals (P) Ltd. Page 18-19 6. Price Waterhouse Coopers (P) Ltd. v. CIT, Kolkata-I Page 20 7. CIT, Ahmedabad v. Reliance Petroproducts (P) Ltd. Page 21-23 8. M/s. Exensys Software Solutions v. Department of Income Tax Page 24 9. ACIT v. Hotel Dan Private Limited Page 28 10. DCIT, Circle 11(1) v. M/s. Speciality Food India (P) Ltd. Page 30 11. JCIT v. Super Cassetes Industries Page 32 12. Sayaji Iron Engg Co. v. CIT Page 33 6. On the other hand, the ld. DR relied on the order of the lower authorities and he further submitted that the assessee has wrongly claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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