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2015 (6) TMI 351 - ITAT MUMBAIPenalty u/s 271(1)(c) - depreciation on the IPRs - Held that:- on the date of search, when Mr. Jingnesh Shah director of the assessee company withdrew the claim of depreciation on IPRs, the claim was already allowed by the CIT(A), but was sub judice before the ITAT in regular assessment proceedings.In such a situation, the issue could not have been made the subject matter of assessment under section 153A read with section 143(3), because that provision contemplates, assessment of material found during the course of search along with the original ingredients of the original return. The important qualification is that the material must be incriminating and found during the search, and which may have the character of increasing the income declared in original ROI. In the instant case, it is not the case of department that there was something which was concealed by the assessee, while filing its original return or the return in response to section 153A. In such a case incidence of penalty at all cannot be comprehended. Coming to the correctness of addition, based on statement under section 132(4), we are in agreement with the submissions of the AR, that addition itself cannot be sustained simply on the basis of statement under section 132(4), as held in the case of Raj Pal Bhatia (2009 (11) TMI 531 - DELHI HIGH COURT). Also in the case of SMJ Housing (2013 (7) TMI 660 - MADRAS HIGH COURT) that Explanation 5 cannot be invoked, as no incriminating material is found from the search. All the facts were on record, which has not been disproved by the revenue authorities or otherwise proved to be illegal, even if the claim was non allowable. Non-allowable claim cannot, by itself invite penalty, as held in the case of CIT vs Reliance Petro Products Pvt. Ltd., (2010 (3) TMI 80 - SUPREME COURT) . - Decided in favour of assesse.
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