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TMI Blog2015 (2) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... ills, gate pass, freight charges paid, etc. However, while disallowing depreciation and investment allowance, on the basis of the report of M/s. ABC Consultants Ltd., it was recorded that the machinery was not put to use during the assessment year 1977-78. The report of M/s. ABC Consultants Ltd. was preferred over the report of M/s. Blue Star Ltd. and addition on account of disallowance of depreciation and investment allowance was sustained during the assessment proceedings. In the present case, the Tribunal while deleting the penalty had discussed the plausibility of both the reports and adopted a view deleting the penalty levied which is acceptable even though the addition has been sustained in the assessment proceedings regarding disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under section 271(1)(c) of the Act were initiated. After allowing fresh opportunity of being heard and considering the reply of the assessee filed on January 29, 1988, the Inspecting Assistant Commissioner of Income-tax (Assessment), Range I, Jalandhar, levied penalty under section 271(1)(c) of the Act amounting to ₹ 1,54,083, vide order dated February 23, 1988. Being not satisfied with the order of the Assessing Officer, the assessee went in appeal before the Commissioner of Income-tax (Appeals), Jalandhar, (CIT(A)). Vide order dated December 14, 1990, the Commissioner of Income-tax (Appeals) dismissed the appeal. Aggrieved by the order, the assessee filed an appeal before the Tribunal. Vide order dated May 31, 1996, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the rival submissions and have gone through the order passed by the Assessing Officer under section 271(1)(c) as well as the Commissioner of Income-tax (Appeals) con firming the penalty. We have also gone through the orders passed by the Assessing Officer and the Commissioner of Income-tax (Appeals) and the Tribunal in the quantum appeal. As is clear from the order of the Tribunal in the quantum appeal, the addition has been upheld on the ground that the Tribunal preferred to accept the evidence of M/s. ABC Consultants (P.) Ltd. in the form of their report submitted to the New Bank of India as against the report of M/s. Blue Star Ltd. through whom the assessee purchased the machineries and who were responsible for erectioning and commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the consultants which was in different context merely noted certain facts which were discovered by them as a result of physical verification and inspection. The report of the consultants, therefore, is not based on any expression of opinion but is based on hard facts discovered as a result of visual verification. The Assessing Officer at the time of reassessment proceedings made diligent efforts to record the statement of Shri P. C. Roy who inspected the premises. The Assessing Officer contacted the director of M/s. ABC Consultants (P.) Ltd. and also recorded the statement of Shri Deepak Bhargava, senior manager of the consultancy company. Shri K. S. Khosla, director of M/s. Hindustan Hydraulics (P.) Ltd. also cross-examined Shri Bhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditions in the quantum assessment on account of disallowance of claimed depreciation and investment allowance have been sustained by the Tribunal by preferring one set of evidence against another set of evidence and even that finding is now open as the hon'ble Punjab and Haryana High Court at Chandigarh has directed the Tribunal to draw up the statement of the case for reference of two questions of law, reproduced in paragraph 4 above. In the result, we will set aside the order of the Commissioner of Income- tax (Appeals) confirming the penalty. 5. After hearing learned counsel for the parties, we do not find any merit in the contention of the learned counsel for the Revenue. 6. The assessee had produced the report of M/s. Blue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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