2014 (2) TMI 1270 - AT - Income Tax

Tribunal revokes penalty on disallowed depreciation, citing Supreme Court rulings.

The Tribunal revoked the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961, amounting to Rs. 36,500. The penalty was related to the ... Penalty u/s 271(1)(c) - incorrect claim of depreciation - Held that:- The assessee furnished all the details relating to the assets i.e. the truck and claimed the depreciation. However, merely on the basis that an incorrect claim of depreciation was made by the assessee, it cannot be said that it was a case of furnishing of inaccurate particulars or concealment of income. Thus we are of the view that it is not a fit case for levying the penalty under section 271(1)(c) of the Act. - Decided in favour of assessee. Issues:1. Confirmation of penalty under section 271(1)(c) of the Income-tax Act, 1961.Analysis:Confirmation of Penalty:The appeal involved the confirmation of a penalty of Rs. 36,500 imposed under section 271(1)(c) of the Income-tax Act, 1961. The appellant contested the penalty, arguing that there was no concealment of income or furnishing of inaccurate particulars. The penalty was related to the disallowance of depreciation claimed on a truck purchased by the assessee. The Assessing Officer (AO) disallowed the depreciation claim and initiated penalty proceedings, which were confirmed by the Commissioner of Income-tax (Appeals) (CIT(A)). The appellant argued that the mere disallowance of the depreciation claim did not warrant the penalty, citing relevant judgments.Appellant's Argument:The appellant contended that no inaccurate particulars were furnished, and no income was concealed. They relied on judgments by the Hon'ble Supreme Court to support their case. The appellant claimed that all details regarding the truck purchase and depreciation claim were provided to the AO. The appellant argued that the disallowance of the depreciation claim did not automatically imply concealment of income or furnishing of inaccurate particulars.Respondent's Submission:On the contrary, the Learned Departmental Representative (Ld. D.R.) supported the authorities' orders, asserting that the incorrect depreciation claim amounted to both concealing income and providing inaccurate particulars. The Ld. D.R. maintained that the penalty under section 271(1)(c) was rightly imposed by the AO and upheld by the CIT(A).Judgment and Precedents:After considering the arguments from both parties and reviewing the case details, the Tribunal found that the disallowance of the depreciation claim did not necessarily indicate concealment of income or furnishing of inaccurate particulars. The Tribunal referred to judgments by the Hon'ble Supreme Court, including the cases of Reliance Petroproducts Pvt. Ltd. and Price Waterhouse Coopers Pvt. Ltd., to support its decision. The Tribunal emphasized that the mere making of an unsustainable claim did not amount to furnishing inaccurate particulars. In this case, the appellant had provided all relevant details, and the incorrect claim did not imply intentional concealment or furnishing of inaccurate particulars.Conclusion:Based on the legal precedents and the specifics of the case, the Tribunal concluded that it was not a suitable scenario for imposing a penalty under section 271(1)(c) of the Act. Consequently, the penalty imposed by the AO and confirmed by the CIT(A) was revoked, and the appeal was allowed in favor of the appellant. The judgment was pronounced on February 5, 2014.