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TMI Blog2013 (7) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... is a bonafide and inadvertent mistake by the assessee while submitting the income in the return, it cannot be held that assessee was guilty of either furnishing inaccurate particulars of income or concealment of his income. Thus, no penalty can be levied on such bonafide mistake and accordingly the same is deleted. In favour of assessee. Disallowance of depreciation on BSE membership rights - Held that:- As decided in Techno Shares and Stock Ltd. case (2010 (9) TMI 6 - SUPREME COURT OF INDIA) BSE Card is an intangible asset entitled for depreciation if the card has been acquired after 01.04.1998. In this case, the assessee has acquired the card on 31st December, 1997 i.e. three months prior to it. In such a situation, it cannot be held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. A proceeding under Section 147 was initiated vide notice under Section 148 dated 26.07.2006. In response to the said notice, a return of income was filed on 14.08.2006, declaring loss of Rs. 1,73,58,260/- which was duly accompanied by profit and loss (P L) account and balance sheet. In the P L account, the assessee had claimed financial cost consisting of bank interest amounting to Rs. 1,18,17,103/- which was not paid before the due date of filing of the return. 3. The Assessing Officer pointed out that the same is disallowable in view of provisions of Section 43B. The assessee immediately filed a revised computation disallowing the said amount. Further, it was also observed by the AO that assessee has claimed depreciation on stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vading any tax and disallowance under Section 43B was purely on account of bonafide mistake of the tax consultants. The learned CIT(A) rejected the assessee's explanations and upheld the levy of penalty on such a disallowance. Regarding claim of depreciation on BSE Card also, the levy of penalty was confirmed on the ground that it has been confirmed by the Income-tax Appellate Tribunal, in way that assessee had admitted the disallowance. 5. Learned counsel for the assessee submitted that the claim of interest on any loans or advances taken from a scheduled bank has been made allowable under Section 43B on payment basis, only from 01.04.2004 i.e. from the assessment year 2004-05. Thus, while computing the income, the said amount of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's claim for depreciation was not bonafide and moreover, it is purely a legal issue. He also relied upon the ITAT, Mumbai Bench decision in the case of M/s V N Private Securities Ltd. wherein it was held that the card acquired prior to 01.04.1998 is also entitled for depreciation and is allowable in the earlier years. Thus, there was one possible view available in favour of the assessee. 6. On the other hand, the learned Standing Counsel submitted that in this case assessee has not filed any return of income under Section 139 (1) of the Act but has filed its return of income in response to notice under Section 148. Even in such return, the assessee has not made any disallowance under Section 43B with regard to the interest payable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lment of income and furnishing of inaccurate particulars. He submitted that even a wrong claim is liable for penalty in view of decision of Delhi High Court in the case of Kanchen-Junga Advertising (P) Ltd. vs. CIT reported in [2012] 340 ITR 595. He also relied upon the Hon'ble Supreme Court decision in the case of K.P. Madhusudhan vs. CIT reported in 251 ITR 99. In this case, he submitted that on both the accounts the assessee has made a wrong claim, in one there was a clear cut violation of provisions of Section 43B and in another the BSE Card has been treated as intangible asset only after 01.014.1998. Thus, penalty has rightly been confirmed by the CIT(A). 7. We have carefully considered the rival contentions, perused the relevant fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst year in which such a claim was to be disallowed in view of Section 43B. Under these circumstances it can be held that there was a genuine inadvertent mistake by the tax consultants in this case. The ratio laid down by the Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd vs. CIT another (supra) wherein the Hon'ble Supreme Court has concluded that if there is a bonafide and inadvertent mistake by the assessee while submitting the income in the return, it cannot be held that assessee was guilty of either furnishing inaccurate particulars of income or concealment of his income. Thus, we hold that no penalty can be levied on such bonafide mistake and accordingly the same is deleted. 8. Now coming to the levy of pena ..... X X X X Extracts X X X X X X X X Extracts X X X X
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