TMI Blog2022 (2) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... various parties alongwith plant machinery and income earned on letting out was offered for tax under the head business income from business profession and the assessee was under bonafide belief that the depreciation is allowable of the block of asset, we find merit in the submission of Ld. AR for the assessee that the assessee made a bonafide claim and mere disallowance thereof would not lead to conclusion that the assessee furnished inaccurate particulars. Thus, in view of the above factual and legal discussion, the grounds of appeal raised by the assessee are allowed. - ITA No. 141/SRT/2021 - - - Dated:- 10-2-2022 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Assessee : Shri Suresh K.Kabra, C.A For the Revenue : Shri Sita Ram Meena, Sr-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Commissioner of Income-tax (Appeals) / National Faceless Appeal Centre Delhi (in short CIT(A)/NFAC), dated 12.08.2021, which in turn arises from order of penalty levied by assessing officer (A.O.)/Income Tax Officer, Ward-2(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so given on rent alongwith building but somehow it does not find place in the rent agreement. The assessee also stated that after insertion of block system, the assets got subsumed in specific block and even if single machine is ready to put to use for the purpose of business, depreciation is allowable. The reply of assessee was not accepted by Assessing Officer by taking view that assessee is not carrying out any business activities. Therefore the claim of depreciation is not allowable. The Assessing Officer disallowed the depreciation and initiated penalty under section 271(1)(c) while passing the assessment order on 29.09.2017. Subsequently, the assessment order was rectified under section 154 vide order dated 17,11,2017 and business income offered by assessee on account of rent receipt was treating as income from house property and standard deduction @ 30% was allowed. Thereafter, the Assessing Officer issued show cause notice under section 274 read with section 271(1)(c) for levying the penalty vide notice dated 29.09.2017 and again on 08.12.2017. The assessee filed its reply vide its reply dated 06.02.2018.The contents of reply is not recorded by Assessing Officer. The Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Hon'ble apex court in the case of Commissioner of income-tax, Vs. Reliance Petroproducts (P) Ltd. (2010) 189 Taxmann 32 (SC)/[2010] 322 ITR 158 (SC). 4. The ld. NFAC/CIT(A) after considering the assessment order, rectification order passed under section 154, submission of assessee held that assessee in its submission stated that it was a bona fide belief that plant machinery was given on rent and depreciation is allowable and assessee also stated that claim of depreciation was otherwise proper or incorrect. The Ld. NFAC/CIT(A) by referring the decision of Sundaram Finance Ltd. vs. Deputy Commissioner of Income-tax (2018) 99 taxmann.com 152 (SC), wherein it was held that when assessee claims depreciation on non-existent asset, penalty under section 271(1)(c) was to be levied for filing inaccurate particulars of income. The Ld. NFAC/CIT(A) in para 6.5 recorded that assessee closed its manufacturing business and gave the land building to various parties on rental basis and claimed depreciation which constitutes furnishing of inaccurate particulars of income and upheld the action of Assessing Officer. Further aggrieved assessee has filed present appeal before this Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xmann.com 491 (Guj) PCIT Vs. Himalayan Expressway Ltd. [2019] 109 taxmann.com 262 (P H) PCIT Vs. Financial Technologies Ltd. [2019] 112 taxmann.com 398 (Bom) 6. On the other hand, Ld. SR-DR for the Revenue supported the order of authorities below. He submits that the Assessing Officer while levying penalty clearly held that assessee was not having any business taxable under the head business and profession . Admittedly, no business was carried out by the assessee during the year. In the rent agreement produced by assessee, there was no reference for letting out of plant machinery. The Assessing Officer levied the penalty for furnishing in accurate particulars of income and no appeal was filed by assessee against such disallowance of depreciation. The Ld. SR-DR submits that the case of assessee is clearly covered by the decision of Hon'ble apex court in the case of Sundaram Finance Ltd. (supra) related by Ld. NFAC/CIT(A) in his order. 7. We have considered the rival submission of both the parties and have gone through the orders of authorities below. We find that there is no dispute that during the year the assessee was not carrying out any business activities. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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