9911796707
TMI Blog2003 (1) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 on imported cars. During the course of the assessment proceedings, the AO noted that the assessee purchased two imported cars. The assessee had shown total hire charges of Rs. 62,651 which included an amount of Rs. 49,000 being hire charges receivable from M/s Harshad S. Mehta for use of car No. BLX7186 for the period from 5th Dec., 1989 to 31st March, 1989. The balance amount was shown as hire charges for airport duty etc. Accordingly, the AO noticed that the assessee was not entitled to claim depreciation on imported cars because the second proviso to s. 32 clearly provided that no deduction shall be allowed under this clause in respect of motor car manufactured outside India, where such motor car is acquired by the assessee after 28th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gest that the cars were used in the business of running on hire for foreign tourists, no depreciation is allowable. The disallowance, is therefore, confirmed." 5. In the meanwhile, while completing the assessment, the AO initiated penalty proceedings under s. 271(1)(c) r/w Expln. 1 of the IT Act, as according to him the assessee made bogus claim of the depreciation and had not furnished accurate particulars of income. An explanation was furnished to the show cause notice, the crux of which was that the claim made was bona fide and was based on the fact that the cars were also used for airport duty, i.e., for tourists purpose also. The AO held that the assessee's intention was to furnish inaccurate particulars of income and thus avoid pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appreciate that the penalty proceedings and assessment proceedings are two different and independent proceedings under the IT Act, 1961, and erred in upholding the action of the AO in imposing the penalty under s. 271(1)(c) of the IT Act, 1961. He submitted that the AO has not detected any concealment on account of particulars of the income or furnishing of inaccurate particulars of such income because the assessee had furnished all the details before the AO and this fact is acknowledged by the AO at p. 3 of the assessment order where he has stated that "Shri K.A. Shetty, C.A. attended on behalf of the assessee-company and filed necessary details as called for. The case was discussed with him from time to time." He further drew our atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO. He submitted that the assessee had made false claim before the AO and the disallowance made by the AO has been upheld by the CIT(A) and the Tribunal. Arguing the appeal of the Revenue, he submitted that the learned CIT(A) is not justified in reducing the quantum of penalty from 200 per cent to 100 per cent because the maximum penalty leviable was Rs. 6,80,400 and the AO had levied the penalty at Rs. 4,53,600. 9. We have considered the rival submissions and have perused the facts on record. It is noted that the assessee filed full details about the purchase of cars and full particulars were furnished in support of its claim of depreciation. An explanation was furnished before the AO but the AO rejected the explanation. The explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty and this fact has been accepted by the Tribunal in quantum appeal in the last paragraph which reads as under: "Now, the question remains whether the assessee is in the business of running the cars on hire for tourists. From the details of car hire charges furnished before us, we find that on some days the assessee has received car hire charges. However, the major amount received is from monthly hire charges. It is admitted by the assessee's representative that the monthly hire charges were received from companies belonging to Harshad Mehta Group. Admittedly, letting out of the cars to those companies cannot be said to be running of cars for tourists. Out of total hire charges of Rs. 62,650, the monthly hire charges amount to Rs. 54, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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