9911796707
TMI Blog2015 (4) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) failed to appreciatea) that penalty u/s.271(1)(c) can be levied only when an assessee is found havingeither ...concealed particulars of income; or ....furnished inaccurate particulars of income; b) that the common thread in both these defaults is particulars of income which an assessee is required to furnish only in his/its return of income and not income per se as only particulars of income can be furnished in the return and no income in physical form can be imported or brought in the return of one's income; c) that both these defaults covered by section 271(1)(c) are distinct and cannot co-exist qua the same income as once the charge is that of concealment i.e. non furnishing, there cannot be a charge for inaccurate furnishing of particulars of income and vice a versa. d) that the levy of penalty u/s.271(1)(c) on both the counts can be the result of either uncertainty as to the charge or non application of mind to the issue before levying penalty. 1.2 The Hon'ble Commissioner of Income-tax (Appeals) erred in upholding the order levying penalty u/s.271(1)(c) on the ground not only of furnishing inaccurate particulars of income but also on the ground of concealment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appeal is against the levy of penalty under section 271(1)(c) of the Act. 4. The brief facts of the case are that, the assessee was engaged in the business of manufacturing of drilling equipments for oil fields, blast hole drilling and water well drilling applications. The Assessing Officer after receipt of order of Transfer Pricing Officer under section 92CA(3) of the Act, dated 20.10.2009 proposed the assessment proceedings by proposing additions on account of following:- * Depreciation claimed by the company on Lease hold land * Rs.47,87,204/- Depreciation claimed on technical Know-how fees disallowed Rs.1,27,00,000/- Adjustment to international transaction determined by TPO u/s 92CA(4) of the Act Rs.58,54,128/- 5. The draft assessment order was provided to the assessee who filed the objections before the Dispute Resolution Panel under section 144C(2) of the Act, which issued the directions under section 144C(5) of the Act. Thereafter, the Assessing Officer completed the assessment under section 143(3) of the Act r.w.s. 144C on 29.09.2010. Penalty proceedings under section 271(1)(c) of the Act were initiated. The assessee carried the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Authorized Representative for the assessee was that the assessee had fully disclosed all the material facts and the claim not being acceptable, does not make the assessee liable to levy of penalty under section 271(1)(c) of the Act. 9. The learned Departmental Representative for the Revenue placed reliance on the order of CIT(A) and pointed out that the assessee in the return of income had claimed depreciation under different heads and during the course of assessment proceedings, a different claim was made by the assessee. 10. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to levy of penalty under section 271(1)(c) of the Act on denial of claim of depreciation on leasehold rights in land acquired by the assessee as part of the acquisition of a running unit during the year. Penalty under section 271(1)(c) of the Act is leviable where the assessee conceals its income or furnishes inaccurate particulars of income. The Explanation - 1 to section 271(1)(c) of the Act further provides that where in respect of the facts material to the computation to total income of any person under the Act, such person fails to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on land, as the same were intangible assets and eligible for deduction under section 32(1)(ii) of the Act. The said section provides that depreciation on intangible assets i.e. Know-how, Patents, Copy rights, Trade marks, Licenses, Franchise or any other business or commercial rights of similar nature being intangible assets acquired on or after 01.04.1998. The first aspect to be noted in the present case is the claim made by the assessee in the return of income. The perusal of the computation of income placed at pages 8 and 9 of the Paper Book reflects the claim of depreciation under the Income Tax Act at Rs. 2,57,96,236/-. The details of the said depreciation chart as per the Income Tax Act are available at page 10 of the Paper Book, in which depreciation @ 10% has been claimed at building, where the total value of the building is Rs. 6,97,77,990/-. The learned Authorized Representative for the assessee fairly pointed out that the said value of the building includes the value of land i.e. Rs. 4,18,17,600/- which is the land in dispute. The perusal of the said depreciation chart further reflects that the assessee had claimed depreciation on various blocks of assets i.e. (1) bui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 271(1)(c) of the Act. Even otherwise, the perusal of the record reflects that the assessee in the return of income had claimed the depreciation on land perse and not on intangible assets. The said claim was against the provisions of the Act and was thus not bonafide claim made by the assessee. On this account also, the assessee is liable to levy of penalty under section 271(1)(c) of the Act. 15. Another contention raised by the assessee was that merely because the claim by it had been held to be not correct, would not amount to furnishing of in-accurate particulars of income. Reliance in this regard was placed on the ratio laid down by the Hon'ble Supreme Court in Price Waterhouse Coopers Vs. CIT & Another (2012) 348 ITR 306 (SC). The said plea of the assessee does not stand because it is undisputed that the claim made by the assessee, was not bonafide. The claim of the assessee in any case, was not sustainable in law and in view of the above, where the explanation of the assessee is not found to be bonafide, the assessee is liable to levy of penalty under section 271(1)(c) of the Act. Accordingly, we uphold the order of CIT(A) in confirming the levy of penalty under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
