Tribunal cancels penalty for Assessee in depreciation claim dispute

The Tribunal ruled in favor of the Assessee, holding that the penalty imposed under section 271(1)(c) was unjustified. The Assessee's claim for higher depreciation was supported by evidence and was a matter of interpretation, not concealment. The Tribunal emphasized that the claim did not amount to furnishing inaccurate particulars of income, citing precedent. Consequently, the penalty was deleted, and the Assessee's appeal was allowed.

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Issues:
Appeal against penalty imposed under section 271(1)(c) for furnishing inaccurate particulars of income.

Analysis:
1. The Assessee challenged the penalty imposed by the Assessing Officer (AO) under section 271(1)(c) for claiming higher depreciation. The Assessee contended that the depreciation on a tanker was claimed at 50%, while the AO allowed it at 15%. The Assessee subsequently filed an application under section 154 requesting depreciation at 30%, which was rejected by the AO. The First Appellate Authority directed the AO to recomputed depreciation at 30%, supporting the Assessee's claim. The Tribunal noted that the Assessee provided sufficient evidence to establish the claim and had given the tanker on hire, as evidenced by financial records. The Tribunal held that the Assessee did not furnish inaccurate particulars of income, citing the decision in CIT vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR-158 (SC), emphasizing that a mere unsustainable claim does not attract penalty under section 271(1)(c).

2. The Tribunal observed that the AO's rejection of the Assessee's claim under section 154 was based on the grounds that the mistake was not apparent from the record and that the Assessee did not address the issue during assessment proceedings. However, the Tribunal found that the Assessee's submissions during the section 154 proceedings provided sufficient evidence to support the claim. The Tribunal emphasized that the Assessee's actions did not amount to furnishing inaccurate particulars of income, as all details were disclosed in the return and the claim was a matter of interpretation, not concealment.

3. The Tribunal concluded that the penalty imposed was unwarranted and ordered its deletion, as the Assessee had not furnished inaccurate particulars of income. The Tribunal relied on the precedent set by the Supreme Court and held that the Assessee's claim, even if not accepted by the Revenue, did not attract penalty under section 271(1)(c). The Tribunal allowed the Assessee's appeal, cancelling the penalty and upholding the Assessee's position regarding depreciation on the tanker.

In summary, the Tribunal ruled in favor of the Assessee, holding that the penalty imposed under section 271(1)(c) was unjustified as the Assessee had not furnished inaccurate particulars of income, but rather made a claim subject to interpretation, which did not warrant penalty under the law.

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