Tribunal cancels penalty for erroneous depreciation claim under Section 271(1)(c) of I.T. Act

The Tribunal allowed the appeal, and the penalty imposed under section 271(1)(c) of the I.T. Act for an alleged excess claim of depreciation and interest in the power generation unit was deleted. The Tribunal held that a mere wrong claim does not automatically lead to the penalty, emphasizing the absence of deliberate concealment or furnishing inaccurate particulars by the assessee.

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Issues involved: Appeal against penalty imposed u/s 271(1)(c) of the I.T. Act for alleged excess claim of depreciation and interest in power generation unit.

Summary:

Issue 1: Alleged excess claim of depreciation and interest

The appeal was filed against the penalty imposed u/s 271(1)(c) of the I.T. Act for an alleged excess claim of depreciation and interest in the power generation unit named "Kalani Wind-farm." The assessee contended that the penalty was unjust as all information was disclosed at the time of filing the return, and there was no intention to conceal income or provide inaccurate particulars. The Assessing Officer argued that the excess claim of depreciation amounted to furnishing inaccurate particulars. The Tribunal considered the facts and legal precedents, including the decision in CIT vs. Reliance Petro Products Pvt. Ltd., and held that a mere wrong claim does not automatically lead to penalty u/s 271(1)(c). The Tribunal found that there was no deliberate concealment or furnishing of inaccurate particulars by the assessee, and hence, the penalty was deleted.

In conclusion, the Tribunal allowed the appeal of the assessee, and the penalty imposed by the Assessing Officer was deleted.

Order pronounced in the open Court on 21st April, 2011.

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