TMI Blog2015 (10) TMI 2834X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) in cancelling the penalty levied by AO u/s 271(1)(c) of the Act and the same is hereby upheld dismissing the grounds raised by the revenue. - ITA No. 322/Hyd/2014 - - - Dated:- 27-10-2015 - SHRI P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For the Revenue : Shri B. Kurmi Naidu For the Assessee : Shri A.V. Raghuram ORDER PER S. RIFAUR RAHMAN, A.M.: This appeal by revenue is directed against the order dated 20/12/2013 of ld. CIT(A)-III, Hyderabad, whereby cancelling the penalty imposed u/s 271(1)(c) of the Income-tax Act, 1961 (Act) by the AO, for the AY 2009-10. 2. Briefly the facts of the case are, the assessee company is engaged in the software business and filed its r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to assessee. In response to the said notice, assessee filed a letter dated 27/06/12 stating therein that it had claimed the depreciation on higher rate on capitalization of software developed by the assessee company on account of difference in the interpretation of claim of depreciation and, therefore, assessee had not concealed any particulars in the return of income filed. Accordingly, assessee requested the AO to drop the penalty proceedings initiated u/s 271(1)(c). However, rejecting the submissions of assessee, AO observed that by claiming depreciation at 100% in respect of software development and 60% in respect of software was patently wrong and intentional and deliberate. Therefore, assessee s explanation that he has filed all par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onduct and the level of disclosure made by the appellant has to be examined. Regarding the conduct, it is seen that the appellant had filed a revised return of income wherein an income of Rs. 1.21 crore was disclosed under MAT and taxes were paid on this income. Further, the entire details had been disclosed by the appellant in its return of income and the accompanying documents. The depreciation schedule was clearly provided and the claim of depreciation was also given clearly in the computation of income. It is from these documents only that the assessing officer was able to find out that the claim was on a higher percentage. In other words, a proper disclosure had been made by the appellant and nothing had been concealed. Thereafter once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,14,364 on account of wrong claim of depreciation, as made by assessee. We direct that minimum penalty may be imposed. 8. Ld. AR submitted that the assessee was under bonafide belief that the software comes under computer and accordingly claimed the depreciation. For the claim on software development expenditure, he submitted that the software were developed and became redundant due to non-marketability. The assessee should have claimed it as business expenditure but capitalized the same and claimed it as 100% depreciation with the bonafide belief that it can be claimed. He also submitted that it is only difference of opinion and not filing of inaccurate particulars. He relied on the judgment of Hon ble AP High Court in the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of information. On the other hand, ld. DR submitted that the information furnished by the assessee is inaccurate and deliberate that nothing has been brought on record to support its claim except pointing out that the revised return of income was filed only to claim additional depreciation. We are of the view that penalty cannot be levied on presumptions relying on the judgment of the Hon ble Supreme Court in the case of Dilip N Shroff Vs JCIT ( 291 ITR 519) , wherein the Hon ble Court has observed as follows: 48. Primary burden of proof, therefore, is on the revenue. The statute requires satisfaction on the part of the assessing officer. He is required to arrive at a satisfaction so as to show that there is primary evidence to estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different angle. [See Anantharam Veerasinghaiah Co. v. C.I.T., Andhra Pradesh, 1980 Supp SCC 13]. 9.2 In this connection, we refer to the judgment of the Hon ble Supreme Court in the case of CIT Vs. Reliance Petro-products Pvt. Ltd., [2010] 322 ITR 158 (SC) wherein the Hon ble Court has laid down the law as under:- A glance at the provisions of section 271(1)(c) of the Income Tax Act, 1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word particulars used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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