2013 (1) TMI 934 - AT - Income Tax

Summary

Issues involved: Appeal against penalty order u/s 271(1)(c) of the Income-tax Act, 1961 for claiming excess depreciation on hospital equipment.

Summary:

Issue 1: Assessment of excess depreciation claimed
The appellant, a hospital, claimed depreciation at 40% on all equipment, which was found excessive by the Assessing Officer. The penalty was imposed under section 271(1)(c) for concealment of income.

Details:
- The Assessing Officer disallowed &8377; 6,92,74,634 as excess depreciation claimed by the appellant.
- Commissioner of Income-tax (Appeals) held that it was a wrong claim of deduction, not concealment of income.
- The Revenue appealed, arguing that the appellant's intentions were not bona fide.

Issue 2: Interpretation of depreciation rates
The dispute arose from the interpretation of depreciation rates for hospital equipment, specifically regarding the classification of "life saving devices" for higher depreciation.

Details:
- The appellant treated all equipment as "life saving devices" for claiming 40% depreciation.
- Assessing Officer bifurcated equipment into "life saving devices" and normal equipment for depreciation calculation.
- Tribunal found no concealment or inaccurate particulars in the appellant's actions.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the deletion of the penalty by the Commissioner of Income-tax (Appeals). The judgment emphasized that the disallowance of depreciation was a normal part of scrutiny assessment and did not indicate concealment of income.