2000 (12) TMI 233

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..... of factual error and no inaccurate particulars were furnished. He has contended that the law assigns different meanings to the term "cost of building" at different places. He has contended that under the head "Income from house property." where annual value of "Building" and land appurtenant thereto is charged to tax for the purposes of determining annual value of "Building" the cost of land is included in the cost of building whereas for the purposes of depreciation the cost of land is not to be included in the cost of building. He has contended that the accounts were maintained by the accountant who did not separate the cost of land from cost of construction of building and thus the depreciation was charged on the aggregate cost of land a .....

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..... ulars attracted the provisions of s. 271(1)(c). 4. We have considered the rival contentions including the written submissions of authorised representative of assessee, the relevant material on record as also the cited decisions. 5. In (1971) 83 ITR 26 (SC) that Hon'ble Supreme Court has held that penalty will not be imposed merely because it is lawful to do so or because minimum penalty is prescribed and that the competent authority will be justified to levy penalty when there is a technical or venial breach of law. It has also been held that penalty will not ordinarily be imposed unless the party acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of its obligations. .....

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..... for levy of penalty on the assessee. It has been held that the penalty under s. 271(1)(c) is to be imposed for wilful and deliberate or grossly negligent or fraudulent acts. It has also been held that keeping a wrong method of accounting which does not result in concealment of income would not amount to "furnishing inaccurate particulars of income". 6. In the instant case, while claiming depreciation the cost of building was taken inclusive of cost of land covered within building whereas the depreciation as allowable on constructed structure of building only, thus excluding the cost of land. The assessee's plea that the accountant maintaining the accounts of the assessee did not segregate the cost of land and construction and opened one .....

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