9911796707
TMI Blog2013 (3) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... S.K. Singh Mr. Shriram Bajaj ORDER This appeal preferred by the Revenue, is directed against the impugned order dated 8th May 2007, passed by the Commissioner (Appeals)- XXIX, Mumbai, for assessment year 1997-98, canceling penalty of Rs. 46,94,679, imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 (for short "the Act"). 2. Brief facts of the case are that, the assessee is a company and it was engaged in the business of leasing, bill discounting and inter corporate deposits. The main addition on which the penalty has been levied is the addition of Rs. 1,02,48,840, made on account of lease equalization. The Assessing Officer, at Para-7.1 of the assessment order, states that in Schedule-13 of Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidelines issued by the ICAI from 1st April 1995, lease equalization account is to be maintained in respect of lease transactions by NBFC. The lease rentals charged by NBFC on lease business comprises of the finance charge as well as recovery of the capital cost. The leased asset is written off in the book of lessor during the primary period of lease. The annual statutory depreciation charged on the asset is normally less than the capital recovery effected during the year. As such, the gross lease rental is split into the finance charge calculated on the basis of the implicit rate and capital recover (lease charge). The difference between the capital recovery and minimum stutory depreciation is credited in lease equalization account. The ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Profit Loss account, has been a matter of debate. Conflicting views have been taken by various benches of this Tribunal in those years. The assessee has maintained its books of account in accordance with the guidance note issued by the ICAI and, hence, it cannot be faulted for the same. In the guidance note, the Institute laid down as to manner in which the income has to be determined in the case of finance lease transactions. Under these circum- stances, it cannot be said that the claim of the assessee is untenable claim. Merely making a claim does not tentamounts to furnishing inaccurate particulars or concealment of income. In fact, in assessee's own case for immediately preceding assessment year 1996-97, the Assessing Officer, in h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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