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TMI Blog2019 (2) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... hich cannot be categorised within ambit of filing of inaccurate particulars. Genuineness of foreign exchange fluctuation loss on account of purchase of assets has not been disputed by the AO. During the course of assessment proceedings, only the claim of deduction on account of additional depreciation and foreign exchange fluctuation loss has been disallowed as the same was not found to be allowable as per the Income Tax Act. Thus, it is a case of mere disallowance of claim of deduction on account of additional depreciation and foreign exchange fluctuation loss. In the case of Reliance Petro Product Ltd. (2010 (3) TMI 80 - SUPREME COURT) mere disallowance of claim of expenditure does not attract penalty u/s 271(1)(c). Relying upon the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not prefer any appeal before Ld.CIT(A). Following which Ld. AO initiated penalty proceedings against assessee for furnishing inaccurate particulars of income under section 271(1) (c) of the Act. Ld. AO has issued notices under section 274 of the Act calling upon assessee to submit details regarding reason for depreciation being claimed at 120% on air pollution control of equipments on items over 120 days and 60% for items below 120 days. 2.2. In response, assessee submitted that it was under bona fide belief that depreciation worked out by software while filing online returns was calculated correctly. In response to foreign exchange fluctuation assessee submitted that company had to pay additional amount of ₹ 33,31,408/-and 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view assessee was in bona fide belief that it is eligible for depreciation at 120% and that foreign exchange fluctuation loss on account of purchase of sale was a revenue expenditure. It is observed that explanation offered by assessee has not been found to be false by Ld.AO. In our considered opinion, it is a case of wrong claim, which cannot be categorised within ambit of filing of inaccurate particulars. 8.1. Ld.CIT(A) deleted penalty by observing as under: 5.3 Now, adverting to the case of the appellant, It is observed that the AO has imposed penalty for furnishing inaccurate particulars of income by way of claim of additional depreciation of ₹ 40,79,973/- on Air pollution equipments @ 120% and foreign exchange fluct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in question constituted the income and not otherwise. In this case, undisputedly, the appellant has offered explanation regarding the incorrect claim of additional depreciation and the foreign exchange fluctuation loss as revenue expenditure. However, the aforesaid explanation of the appellant company was not accepted by the Assessing Officer due to the following reasons:- i. That the foreign exchange fluctuation loss should have been capitalized instead of treating the same as revenue expenditure and; ii. The additional depreciation should not have been claimed on the anti pollution equipment @ 120%. It is noted that it is not a case of the Assessing Officer that either the bogus depreciation has been claimed or the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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