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TMI Blog2014 (4) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... merits had the assessee chosen to agitate the claim of higher depreciation the claim would have been allowed – there was no reason as to why the explanation was not considered by the authority. Addition made u/s 14A of the Act – Excess depreciation claimed – Held that:- The assessee has contended that there was full disclosure and it is only a case that disallowance made by the assessee was found to be inadequate which issue had the assessee chosen to challenge may have resulted in relief - The explanation too warranted a consideration - quantum proceedings and penalty proceedings are separate and distinct - The explanation offered in the penalty proceedings necessarily has to be considered judiciously within the Statutory framework - Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was disallowed and limited by the AO to 15% resulting in a disallowance of Rs.9,666/-. 3. It is a matter of record that the additions were not challenged in quantum proceedings by the assessee. A perusal of the penalty order shows that in response to the notice as to why penalty on account of the above additions made by way of disallowances be not subjected to penalty u/s 271(1)(c), the assessee is found to have given the following reply:- 2. It has been submitted by the addition made u/s 14A of the Act is due to difference of opinion and there is no concealment or furnishing of inaccurate particulars. The assessee had relied upon certain case laws. With regard to disallowance of excess depreciation it has been claimed that the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied on the addition made which has been accepted by appellant, there should not be any grievance against the penalty because Assessing Officer has arrived at the conclusion that there were items which were not acceptable by the Assessing Officer at the time of assessment proceedings. 5. Aggrieved by this the assessee is in appeal before the Tribunal. The Ld. AR reiterates the submissions advanced before the tax authorities. Apart from that it was also his submission that simply because the assessee accepted the addition, it cannot be further penalized. It was his argument that looking at the returned income of over Rs.1.54 crore the variation in the returned income by Rs.7,41,688/- odd was considered not relevant for further challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have got relief. Qua the issue of depreciation of computer peripherals, it was his submission that even on that there are judgements in favour of the assessee and a higher claim of depreciation would have been allowed had the assessee chosen to agitate. In these circumstances it was prayed that the penalty deserves to be quashed. The decisions relied upon before the CIT(A) were heavily relied upon. 6. Sr. DR on the other hand placed heavy reliance upon the impugned order specific para 4.2 of the impugned order was relied upon. Since the same has been reproduced in the earlier part of this order the findings are not repeated. It was his submission that it is an accepted fact that the additions have not been challenged and this fact c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. It is a settled legal position that quantum proceedings and penalty proceedings are separate and distinct. The explanation offered in the penalty proceedings necessarily has to be considered judiciously within the Statutory framework. In the afore-mentioned peculiar facts and circumstances we find that the impugned order deserves to be set aside and the penalty order deserves to be quashed as the explanation of the assessee deserves to be accepted. The consistent view of the Jurisdictional High Court in the case of BSES Rajdhani Yamuna amongst others would have operated in assessee s favour even in quantum proceedings had the assessee chosen to agitate the issue. As far as the penalty proceedings are considered the penal acti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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