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TMI Blog2018 (7) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... income u/s 271(1)(c ), without passing a speaking order of the wrong doing of the assessee. 3. That on record the assessee has never claimed depreciation u/s 32 of the Income Tax Act, 1961 since the construction of boundary walls a fact consistently accepted the department since 2000. However, in year of sale in AY 2006-07, the fact that boundary walls has not been depreciated u/s 32 of the IT Act has been consistently overlooked by the AO/CIT(Appeals) both in the quantum and penalty proceedings. 4. That the fact the assessee was claiming depreciation on boundary walls under Companies Act, 1956 had no bearing as regards determination of taxability under the normal provisions of the Income Tax. 5. That the above grounds of appeal are independent and without prejudice to one another. Your appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal at the time of hearing." Additional Grounds: i. "That the penalty as imposed by the Assessing Officer u/s 271(1)(c ) of the Income Tax Act, 1961 (the Act) vide order dated 28th October, 2013 is barred by time in terms of proviso to Section 275(1)(a) of the Act. ii. That without prejudice to addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned that the depreciation upto 31.03.2005 was Rs. 1,39,825/- and depreciation for the FY 2005-06 was Rs. 35,677/-. On the basis of these facts, the Assessing Officer hold that the pleading of the assessee that no depreciation was claimed on building was not found acceptable. The Assessing Officer relied upon the findings of facts given by the ITAT which is the final fact finding authority that Ld. AR of the assessee admitted before the Tribunal that assessee claimed the depreciation on building. After considering these facts, the Assessing Officer gave the finding that assessee concealed the particulars of its income and accordingly levied the penalty of Rs. 10,74,878/-. 4. Aggrieved by the Penalty order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the penalty levied by the Assessing Officer is time barred. In this case, the penalty proceedings had been initiated by the Assessing Officer vide his order dated 27.11.2008 and against which the CIT(A) passed the order in quantum proceedings vide order dated 14.09.2010. As per the proviso to Section 275(1)(a) of the Act, it is clear that the order of lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction of the ITAT, while giving effect to the order of the ITAT, computed the long term capital loss on transfer of land at Rs. 15,68,804/- and in respect of the building has worked out the short term capital gain at Rs. 32,32,883/- and after adjusting the above loss of (-) 39,547/- has worked out the total income at Rs. 31,93,336/- and the long term capital loss amounting to Rs. 15,68,804/-. On the basis of income as determined while giving effect to the order of ITAT in accordance with the directions as issued to the Assessing Officer to compute the short term capital gain on sale of building in view of the provisions of Section 50 of the Income Tax Act, the Assessing Officer levied the penalty u/s 271(1)(c) of the Act at Rs. 10,74,878/- vide order dated 28.10.2013. 7. The Ld. AR further submitted that in the instant case, the Assessing Officer levied the penalty not on the basis of foundation given in the original assessment order dated 27.11.2008 wherein the penalty proceedings was initiated on account of the adoption of the market value of the property at Rs. 51,30,000/- for the purpose of working out a long term capital gain, but on account of working out a short term ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, has ignored the loss occasioned by such depreciation shown in the books of account and has disclosed the income at NIL which is verifiable from the income-tax return filed by the assessee and assessment thereon completed. Such fact may be verified from the income-tax return from the A.Y. 2001-02 onwards because wall was constructed in the F.Y. 2000-01 and accordingly it is incorrect to say that any depreciation u/s 32 of the Act has ever been allowed to the assessee. It is not clear under what impression the assessee's counsel stated so, but the fact remains, as it is clear from the records also, neither any depreciation was claimed by the assessee in respect of the building (wall) nor has been allowed by the Income Tax Department u/s 32 of the Act. Therefore, merely because the ITAT has gained the impression on the basis of profit & loss account as maintained in accordance with the Company Law, the depreciation has been debited to the profit & loss account, that does not mean that depreciation has actually been allowed to the assessee. Section 50 of the Act contemplates only that depreciation, which has been actually allowed u/s 32 of the Act while computing the income in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal grounds filed by the Assessee. As regards the Additional Ground (i) relating to the time barring penalty order, it can be seen that the original assessment order was passed on 27.11.2008 and the penalty was initiated in the same order itself. But since the earlier Assessment was quashed by the Tribunal on 27.04.2012, the fresh Assessment Order was passed on 03.06.2013. Thereafter the penalty order which is challenged before us is passed on 28.10.2013. Thus, the penalty order is within the parameters prescribed by the provisions of the Income Tax Act, 1961, more specifically that of Section 275(1)(a) of the Income Tax Act. Thus, Additional Ground No. (i) is dismissed. 12. Additional Ground No. (ii) is relating to absence of specific charge pointing out in the notice. It is pertinent to note here that the penalty order is based on furnishing of inaccurate particulars but the notice is not specifying exactly on which limb the penalty u/s 271(1)(c) has been initiated. From the notice dated 30.06.2013 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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