TMI Blog2021 (3) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... med in regular course with the firm belief that it is legally allowable which was further supported by statutory Audit Report and therefore, imposition of penalty is unjustified. The A.O. decided the matter against the assessee on the contention that depreciation can be allowed on the show room building as it could not be deemed to be put to use on 05.03.2007 as claimed by the assessee but was put to use on 31.05.2007 after the completion of Bath Studio. On that premises the penalty imposed u/s.271(1)(c) of the Act was declared to be unjustified as the assessee has only committed an undoubtful bona fide error without having any intention of concealment of income or furnishing inaccurate particulars of income. Thus relying on the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Act on 28.03.2014 which was culminated into the order imposing minimum penalty of ₹ 6,13,84,278/- on 01.03.2017. Ultimately, the same was deleted by the Ld. CIT (A). Hence, the instant appeal before us. 3. The Ld. D.R relied upon the order passed by the Ld.AO in support of the order of levying penalty. 4. On the other hand, the case of the assessee is this that the penalty proceeding initiated on the charge of furnishing of inaccurate particulars of income but the penalty was ultimately levied on the charge of concealment of income and therefore the order of penalty is liable to be quashed. Further that, the penalty has been levied on the basis of the fact of disallowance of additional depreciation of ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to Section 271(1)(c) in their entirety also indicate element of strict liability of assessee for concealment or for giving inaccurate particulars while filing returns Union of India v. Dharamendra Textile Processors (2007) 295 ITR 244 (SC). 8. As per the deeming provisions of Explanation 1 to section 271(1), the amount of addition on any issue about which the assessee is unable to offer any satisfactory explanation shall be deemed to represent the income in respect of which particulars have been concealed. In this case, as brought out in the assessment order, the assessee failed to offer any satisfactory explanation. Moreover, in the case of Unionof India vs. Dharamendra Textile Processors [2008] 166 Taxman 65 (SC), the Hon ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from that in our considered opinion since this is a case of disallowance of claim of depreciation there cannot be any question of concealment of income. Further that, the appellant has made claim of additional depreciation on the basis of the Tax Audit Report. In this regard we have carefully considered the judgment passed by the Jurisdiction High Court in the case of Geeta Prints Pvt. Ltd.[2013] 33 Taxmann.com 393(Guj.) as relied upon by the Ld. A.R. It was decided therein that when the assessee had made full disclosure about its claim u/s.80HHC supported by the certified issued by Chartered Accountant no penalty can be levied u/s.271(1)(c)of the Act, merely on the ground that the claim on merit was not granted. The relevant portion of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was noticed that the assessee had made full disclosures and the statutory report was also suggesting that the claim was legal. He further pointed out that the Kerala High Court in the case of CIT v. K. Rajendranathan Nair [2004] 265 ITR 35/135 Taxman 360 held that such claim was sustainable under s. 80HHC of the Act. He, therefore, submitted that the Tribunal committed an error in reversing the order of CIT (A). 7. On the other hand, counsel for the Revenue opposed the contention submitting that the assessee had made exaggerated and false claim, that the Tribunal has correctly reversed the order of CIT(A). 8. Having thus heard the counsel for the parties and having perused the record, it emerges that the assessee had made f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon. Apex Court and analyzing the facts of the case in the appeal before us, we find that it is squarely covered in favour of assessee by the above judgment as the assessee which is a limited company declaring total income of ₹ 11.43 crores (approx.) and having no mens rea of claiming excess depreciation of just ₹ 7,80,826/- rather it was claimed in the regular course and with the firm belief that it is legally allowable which was further supported by the statutory audit report. It was only the Revenue's contention that the depreciation cannot be allowed on the show room building as it could not be deemed to be put to use on 5.3.2007 as claimed by the assessee but was put to use on 31.5.2007 after the completion of Bath ..... X X X X Extracts X X X X X X X X Extracts X X X X
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