9911796707
TMI Blog2014 (7) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings u/s 271(1)(c) of the Act – Held that:- The deduction/exemption was claimed u/s. 80IB and 10(38)of the Act - the assessee had not paid not STT tax and non-payment of said tax was within the knowledge of the assessee. Even then the assessee made a claim u/s. 10(38)of the Act - Such a claim cannot be termed an inadvertent mistake. Assessees are required to file return showing the correct taxable income and not to claim a deduction/exemption/rebate that is not due to them - If two views are possible for such a claim assessee can have benefit of existence of two possible views - It is a simple case of concealment of income and filing of inaccurate particular - the auditors had expressly made a note in notes to the accounts and determined the quantum of eligible 80IB deduction - AO had rightly levied penalty for the two amounts u/s. 271(1)(c)of the Act and the FAA was justified in confirming the same. In respect of penalty levied for claim of depreciation two views were possible about the claim at the time of filing of return of income - if the assets are ready for use depreciation can be claimed. FAA was justified in following the judgment of the jurisdictional high cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income on 30. 10. 2006 declaring total income of ₹ 25. 29 lakhs. Assessing officer (AO) finalised the assessment u/s. 143(3) of the Act, on 04. 11. 2008, determining the total income at ₹ 32. 59 lakhs. During the course of hearing before us, Authorised Representative (AR) of the assessee did not press ground no. 1 and 2. Hence, same stand dismissed as not pressed. 3. Ground no. 3 is about disallowance of depreciation. During the assessment proceedings, AO found that assessee had claimed depreciation of ₹ 5. 29 lakhs in its proprietary concern M/s Dicen Industries (DI), that out of the said depreciation ₹ 3. 57 lakhs and ₹ 10, 272/0 had been claimed for factory building and plant and machinery respectively. AO observed that no manufacturing activity were carried out during the year in the factory building, that assessee had only purchased watches legally from India and had exported the same to foreign countries. Relying upon the order of the Hon ble jurisdictional High Court delivered in case of Gulabchand Agarwal (267 ITR 768), he held that depreciation was allowable only when the assets had actually been used during the year under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of the assessee on the ground that assessee had not used the assets for business during the year under consideration. We find that in the matter of Dineshkumar Gulabchand Agrawal(supra), Hon ble jurisdictional High Court has dealt with the identical issue. In that matter the assessee had argued that assets were ready for use and therefore depreciation was rightly claimed by him, even though he had not used the asset. The AO, the FAA and the Tribunal held that the assessee was not entitled to claim depreciation if the asset was not used. Before the Hon ble the assessee contended that even if the vehicle was not actually used but since it was ready for use, he was entitled to claim the benefit of depreciation on such assets. Referring to the judgment of Whittle Anderson Ltd. ( 79 ITR 613), Hon ble Court held that in the above judgment, Bombay High court was concerned with the interpretation of the expression use or used , whereas in the case to be decided by it interpretation of the word used had to be deliberated upon. Finally, Hon ble Court held as under: It appears that after the above judgment, there was an amendment to section 32 of the Incometax Act. The word u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision Dinehskumar Gulabchand Agarwal (supra), he held that depreciation was not allowable because assets had been not actually put to use during the year. With regard to disallowance of exemption claimed u/s 10(38) of the Act, in respect of LTCG of ₹ 49, 829/-, he held that assessee had sold shares of M/s. Nova Capacitors Ltd. , resulting in LTCG of ₹ 49, 829/-, that in the return of income he claimed the said amount as exemption u/s. 10(38), that the assessee had not paid Security Transaction Tax (STT) on the whole transaction, that LTCG was not allowable for non-payment of STT. During the assessment proceedings, AO found that in the case of M/s. J J Precision Industries, one of the proprietary concernes of the assessee, an amount of ₹ 2, 28, 780/- was credited on account of profit and sale of machinery, that assessee claimed deduction u/s. 80IB for the said amount in his return of income, that as per the provisions of the Act profit and gain derived from the industrial under - taking were eligible for the deduction, that sale of machinery could not be taken as profit derived from industrial undertaking. He levied penalty, amounting to ₹ 2, 23, 127/-, u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auditors report given in Form No. 10CCB, that the auditors had certified the profits and gains derived from undertaking which were allowable u/s 80IB to the extent of ₹ 2, 28, 54, 198/-, that while filing the return of income, that the assessee had deliberately increased the quantum of deduction by ₹ 2, 62, 323/- and has claimed deduction u/s. of ₹ 2, 31, 16, 521/-, that inspite of auditors clear-cut directions and observations about the accounts, the assessee had inflated the deduction u/s. 80IB, that the assessee had intentionally suppressed the taxable income by way of furnishing of inaccurate particulars of income and has concealed the taxable income, that it was not a simple case of disallowance of claim but was a case of intentional claim of wrong deduction which had been unearthed by the AO with due diligence while scrutinizing the records of the assessee. Finally, he upheld the penalty levied by the AO. 9. Before us, AR contended that depreciation was claimed on the assets under the bonafide belief, that even ready to use assts were entitled for deprication, that the AO had not doubted the existence of the assets, that mere disallowance of a claim shou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
