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TMI Blog2018 (2) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... th the appeals. First we take up ITA No. 5792/DEL/2014. Our decision hereinbelow shall identically be applicable in ITA No. 5793/DEL/2014. 4. The sole ground raised by the Revenue in ITA No. 5792/DEL/2014 read as under: "On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the penalty of Rs. 15,45,282/- imposed by the Assessing Officer u/s 271(1)(c) of the I.T. Act on account of willful evasion of tax by claiming deprecation on building." 5. Briefly stated, the facts of the case are that the assessee is a Co-operative Group Housing Society. The assessee filed its return of income for the relevant assessment year 2007-08 on 13.02.2008 declaring loss of Rs. 53,76,403/-. The return was processed u/s 143(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd spent the same to meet the various common expenses of the society. In case of any shortfall or surplus, the same is collected and/or utilized for the common benefits of the members. Since there was no taint of commerciality, the question of earning profits would not arise when the assessee used the funds received towards maintenance of the society for providing the members with usual privileges, advantages and convenience. Thus the receipt of funds for and on behalf of the members was not liable to tax. The aforesaid submission of the assessee was found not to be tenable in the opinion of the Assessing Officer. The Assessing Officer was of the view that the flats of the society belong to the members in their own right and the co-operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has filed belated return claiming in its computation under the head "profits and gains of business/profession" as loss and this loss including deprecation could not have been wholly set off against income under any other head of the following assessment year/years to be set off against the 'profit and gains of business or profession'. Therefore, the Assessing Officer was of the opinion that the assessee was not entitled to deprecation on the dwelling units of members. For the relevant assessment year 2006-07, similar claim was made, which was disallowed by the Assessing Officer, but no penalty was initiated during the assessment year 2006-07. Whereas, penalty was imposed during the impugned assessment year for furnishing inaccurat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income was duly disclosed by the appellant in its return of income for the relevant assessment year and during the course of assessment only such claim of depreciation of the appellant has been disallowed. It is also an undisputed fact that the members of the group housing society are not technical. persons, and, they acted on the advice of a qualified chartered accountant who audited the books of accounts of the appellant. Thus, it is a case where the relevant material facts relating to the claim of depreciation was found to be disclosed in the return of income of the appellant and the same was disallowed only by the Assessing Officer. This claim of depreciation was found to be based on the report of auditor. Thus it is a case of mere disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical advice given by the Chartered Accountant. Moreover, even after such disallowance of the claim of depreciation, the income of the appellant is a negative figure. In my opinion, mere mistake in making a claim in the return of income would not ipso facto reflect concealment or furnishing of inaccurate particulars of income in terms of section 271(1)(c) of the Act. The wrong claim of depreciation in the present case cannot be said to be made with an intention to evade tax in as much as even after the disallowance of depreciation, the resultant income of the appellant remains a loss. An explanation was offered by the appellant during the course of assessment that the aforesaid claim was made on the basis of the report of a qualified charter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not sustainable in law by itself. No penalty proceedings were initiated by the Assessing Officer in assessment year 2006-07 and facts of the present case are identical in the impugned assessment year. Moreover, it is a case where no individual is being benefitted by the claiming wrong depreciation. This is a bonafide mistake made by the assessee without any intention to evade tax. Moreover, the assessee has already shown losses for the previous years. The assessee has submitted reasonable explanation on the basis of the report of a qualified auditor. In such facts and circumstances, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the impugned penalty so made by the Assessing Officer. Ground raised by the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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