2018 (12) TMI 1585 - AT - Income Tax

Penalty u/s 271(1)(c) - depreciation claimed for land and building - Held that - It is pertinent to note that in earlier Assessment Years similar claim of the depreciation has been allowed by the Revenue Authorities. The issue is debatable issue and some of the decisions decided in favour of the assessee on the issue of depreciation. Thus, there was no concealment of income or inaccurate furnishing of particulars on part of the assessee. The case law relied upon by the Ld. DR is not applicable in the present case as in that case the assessee did not disclose the details of the creditors nor their list but merely claimed in the return. In the present assessee s case the assessee claimed the depreciation after filing the details and there was no concealment or inaccurate furnishing of documents as the issue is allowed in respect of depreciation claimed for land and building. Therefore, Section 271(1)(c) will not be attracted in the present case. The order of the CIT(A) is set aside and appeal of the assessee is allowed.

Summary

Issues:
- Penalty order under section 271(1)(c) for concealment of income and furnishing inaccurate particulars.

Analysis:
The appeal was filed against the penalty order under section 271(1)(c) passed by the CIT(A)-XXVIII, New Delhi for Assessment Year 2010-11. The assessment was completed under section 143(3) of the Income Tax Act, 1961, resulting in various additions and disallowances by the Assessing Officer. Penalty proceedings were initiated on specific points, and the penalty notice was issued for concealment of income and furnishing inaccurate particulars. The Assessing Officer imposed a penalty of ?1,75,200 after considering the submissions made by the assessee.

The assessee then appealed before the CIT(A), arguing that the depreciation claimed on the property was a debatable issue, and therefore, penalty proceedings under section 271(1)(c) were not justified. The assessee relied on tribunal decisions supporting the claim of depreciation on land and building, emphasizing that there was no concealment of income or inaccurate furnishing of documents. The Ld. AR highlighted previous instances where similar depreciation claims were allowed by revenue authorities.

During the proceedings, the Ld. DR supported the Assessing Officer's order and cited a judgment of the Hon'ble Delhi High Court. After hearing both parties and examining the material on record, it was observed that similar depreciation claims had been allowed in earlier assessment years by revenue authorities. The tribunal noted that the issue of depreciation was debatable, with some decisions favoring the assessee. It was concluded that there was no concealment of income or inaccurate furnishing of particulars by the assessee in this case. The tribunal distinguished the case law cited by the Ld. DR, stating that it was not applicable as the assessee had disclosed details and filed necessary documents regarding the depreciation claim. Consequently, the tribunal set aside the CIT(A)'s order and allowed the appeal of the assessee.

In the final decision, the tribunal allowed the appeal of the assessee, emphasizing that section 271(1)(c) was not applicable in this case due to the debatable nature of the depreciation claim and the absence of concealment or inaccurate furnishing of documents. The order was pronounced in the Open Court on 26th December 2018.