TMI Blog2016 (12) TMI 1809X X X X Extracts X X X X X X X X Extracts X X X X ..... which involves two possible views. The assessee had taken one of the possible view which was supported by sound legal contention and also certified by the tax auditor cannot be considered as furnishing of inaccurate particulars of income within the meaning explanation 1 to sec. 271(1)(c) of the Act. Moreover, even after disallowance of excess depreciation, the returned loss continued to be in loss and which does not results into taxable income, so as to claim that the assessee has claimed excess depreciation to evade payment of tax. Excess depreciation claim made by the assessee is a bonafied claim without any fraudulent intention to evade tax, which does not tantamount to furnishing inaccurate particulars of income warrants levy of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has claimed 100% depreciation on water supply and distribution equipments and water treatment plant, whereas it is eligible for normal rate of 15% depreciation applicable to general plant and machinery, therefore opined that the assessee has furnished inaccurate particulars which attracts penalty u/s 271(1)(c) of the Act. In response to show cause notice, the assessee has furnished detailed written submission and relied upon certain judicial precedents. The assessee submitted that it has disclosed all material facts in the return and it has claimed 100% depreciation on the bonafied belief that it was eligible for 100% depreciation, as it was developed infrastructure project by establishing integrated textile park in the Special Econ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction u/s 80IAB. The A.O. further held that penalty is a civil liability and willful concealment or an attempt to evade tax is not a pre-requisite for attracting penalty. Evan wrong claim or excess claim of depreciation leading to admission lesser income or higher loss tantamount to furnishing inaccurate particulars of income within the meaning of sec. 271(1)(c) of the Act. In support of his findings relied upon plethora of judgments, including Hon ble Supreme Court, in the case of Union of India vs. Dharmendra Textile Processor (SC) 306 ITR 277. 5. Aggrieved by the penalty order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee has filed elaborate written submission along with certain judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income. The assessee further contended that there is no ulterior motive behind excess claim of depreciation and its claim is supported by sound legal contention and also it was advised by expert tax consultants who certified the claim in the tax audit report. 7. The facts relating to disclosure of all material facts in the return of income is not in doubtful. In fact, the A.O. could not bring on record any factual findings of concealment of income or furnishing inaccurate particulars of income. The A.O. was of the opinion that excess claim of depreciation tantamount to furnishing inaccurate particulars of income as such it attracts penalty u/s 271(1)(c ) of the Act. We do not find any merits in the findings of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the possible view which was supported by sound legal contention and also certified by the tax auditor cannot be considered as furnishing of inaccurate particulars of income within the meaning explanation 1 to sec. 271(1)(c) of the Act. Moreover, even after disallowance of excess depreciation, the returned loss continued to be in loss and which does not results into taxable income, so as to claim that the assessee has claimed excess depreciation to evade payment of tax. 8. Coming to the case laws relied upon by the parties. The A.O. relied upon the decision of Supreme Court, in the case of Union of India Vs. Dharmendra Textile Processor (SC) 306 ITR 277 and observed that penalty is a civil liability and willful concealment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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