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TMI Blog2017 (9) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... her whereas the AO has taken the 'installed capacity' to mean installed capacity of the eligible units only. The impact of this action of the AO is that the appellant will be entitled for higher WDV on this amount and shall be able to claim higher amount of depreciation allowance in the subsequent years. Thus, in view of the above, it is evident that in view of debatable nature of the issue, it cannot be held that inaccurate particulars were filed by the appellant, since the claim of the appellant regarding depreciation allowance was on a different interpretation of the term “installed capacity” as compared to the view taken by the Ld. AO. It is evident that such a view could be debatable and hence in the absence of any inaccuracy in the claim of the appellant, it cannot be held that the appellant had filed inaccurate particulars of income on this issue. Reduction of the amount of deduction under Section 80IB by exclusion of interest income from the computation of eligible profit - Held that:- On careful consideration, as the interest income from deposits made with suppliers and interest from the customers on delayed payment, is derived from the business of the appellant, it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of ₹ 4,52,50,855/-. Certain additions were made in the assessment order passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act), which was challenged before the Ld. CIT(A)- XII, who vide order dated 16.8.2010 confirmed the following additions: i) Disallowance on account of additional depreciation. ii) Restriction of the deduction under section 80IB to ₹ 64,54,637/- by excluding the interest earned on bank deposits and by apportioning loss of ₹ 12,56,947/- from the showroom towards units eligible under section 80IB. iii) Disallowance of ₹ 26,422/- on account of donations. Following this, a notice u/s. 274 read with section 271(1)(c) was issued. The assessee s reply was that the deduction under section 80IB was claimed on the basis of an audit report signed by a Chartered Accountant and the assessee had accordingly filed complete and correct particulars of income, was not accepted by the AO. On the same ground, the explanation of the assessee that the claim of additional depreciation was based on the audit report signed by the CA supported by the report of Chartered Engineer, was also not accepted by the AO. The AO, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licting decisions. In this context two landmark judgments were given by Apex Court in Dilip N. Shroff Vs Joint CIT (2007) 291 ITR 519 (SC) and T. Ashok Pai Vs CIT (2007) 292 ITR 11 (SC), which spell out mainly the following rules for the purpose of penalty imposable: (i) Both the expressions- concealment of income and furnishing of inaccurate particulars indicate some deliberation on the part of the assessee, though the word deliberately and the word willfully are no longer part of the statue. (ii) Mere omission or negligence would not constitute a deliberate act of suppressiio veri or suggestio falsi. (iii) Primary burden of proof is on the revenue. The statute requires satisfaction on the part of the Assessing Officer. He is required to arrive at a satisfaction so as to show that there is primary evidence to establish that the assessee had concealed the amount or furnished inaccurate particulars and this onus is to be discharged by the department. (iv) The Assessing officer while considering levy of penalty should consider whether the assessee has been able to discharge his part of the burden. He should not begin with the presumption that the assessee is guilt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the particulars of income or (b) assessee has furnished inaccurate particulars of such income. 5.7 Thus in view of the above discussion and in view of the Hon'ble Supreme Court in Reliance Petroproducts (supra), it is clear that the legislature did not intend to impose penalty on every assessee whose claim was rejected by the assessing officer. What is sought to be covered under Section 271(1)(c) is concealment of particulars of income or furnishing of inaccurate particulars of income and not making of an untenable claim. 5.8 From the various judicial precedents it is seen that the facts and circumstances in each case has to be seen in the context and then penalty provision should be applied to see whether there was the concealment of particulars of income or the assessee has furnished inaccurate particulars so as to call for the penal action under section 271(1)(c). 5.9 On careful consideration of the various grounds on which additions were made by the ld. AO, it is evident that on all grounds on which penalty was levied, there is no dispute that the assessee had not suppressed any facts and the claim has been made on the basis of audited accounts and on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of the appellant, it cannot be said with certainty that the same had to be taxed under 'Income from Other Sources'. Accordingly, no penalty can be levied on the same. However, since assessee had admitted to treat interest from bank deposits as Income from Other Sources , the amount of penalty is restricted to the addition in respect of interest on deposit in bank of ₹ 30,824 only. 5.12 Regarding the disallowance of donation, we find that the use of nomenclature donation is the root cause of this dispute. This amount comprises of payment of ₹ 16,857 to a widow of an employee of the appellant company, which was incurred for the purpose of maintaining harmonious relationship with the staff and it is more in the nature of staff welfare than 'donation'. Regarding the balance amount of of ₹ 6,000, paid to Helpage (India), no receipt was furnished before me. Further, no receipt in respect of other donations of ₹ 2,5OO was filed. In view of the same, the inaccuracy in filing particulars of income was established to the extent of ₹ 8,5OO on this ground. In view of the above, the levy of penalty was rightly confirmed to the exten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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