1995 (2) TMI 142 - AT - Income Tax

Bona Fide, Claim For Depreciation, Furnishing Inaccurate Particulars Of Income, Investment Allowance, Penalty For Concealment

Summary

Issues:
- Appeal against cancellation of penalty under section 271(1)(c)
- Claim of depreciation and investment allowance on two machines
- Dispute over installation date of machines
- Imposition and cancellation of penalty
- Evidence presented by both parties
- Interpretation of 'installed' for depreciation claim
- Bona fide belief and penalty imposition

Analysis:
The judgment involves an appeal against the cancellation of a penalty under section 271(1)(c) by the Commissioner (Appeals) concerning the claim of depreciation and investment allowance on two machines. The dispute arose when the Assessing Officer found discrepancies in the installation dates of the machines claimed by the assessee. The Revenue contended that the penalty was rightly imposed due to inaccurate particulars furnished by the assessee. However, the assessee provided evidence, including bills, delivery notes, transport receipts, and a certificate from the Works Manager, to support their claim that the machines were installed and used before the deadline. The Commissioner (Appeals) cancelled the penalty based on this evidence.

The Tribunal analyzed the evidence presented by both parties and considered the interpretation of the term 'installed' for the depreciation claim. It was noted that the machines were dispatched and delivered to the assessee before the deadline, and the Commissioner (Appeals) found the evidence sufficient to support the claim of installation and commissioning. The Tribunal referenced previous decisions to support the assessee's argument that a bona fide belief in the claim should preclude penalty imposition, especially when supported by evidence. The Tribunal also emphasized that the penalty proceeding is distinct from the assessment proceeding and should only be imposed if there is a conscious concealment of income or deliberate furnishing of inaccurate particulars.

Ultimately, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the departmental appeal, concluding that the evidence provided by the assessee supported their claim for depreciation and investment allowance. The judgment highlighted the importance of a bona fide belief in making claims and the need for a reasonable basis for penalty imposition, emphasizing that mere refusal of a claim should not be the sole basis for initiating penalty proceedings.