2010 (4) TMI 684

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....s 271(1)(c) of the IT Act.   3. In this case during the assessment proceedings, the Assessing Officer noticed that the assessee had claimed additional Depreciation on plant and machinery at Rs. 21,73,127/-. Assessee was asked to file details on which the additional depreciation has been claimed. In response to the same a reply was submitted by the assessee as under:-   "As per computation of income tax, we have claimed total depreciation of Rs. 1,58,66,928/- which includes:- Depreciation for plant and machinery 2031035 Additional depreciation of plant and machinery 2173127 Depreciation fixed assets other than plant and Machinery 11662465 15866927"   However, we find that additional depreciation on plant and machinery....

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....Appeals)(A) deleted the addition.   3.4 Against this order the revenue is in appeal before us. We have heard both the parties and perused the record.   3.5 We find that the first aspect of the penalty in this regard is with reference to claim of addition depreciation amounting to Rs. 275276/-. We find that in the details of depreciation called for by the Assessing Officer, assessee has himself found that additional depreciation claimed of Rs. 275276/- was not pertaining to plant and machinery and hence the same was wrongly claimed. However the explanation of the assessee was not accepted by the Assessing Officer. In our considered opinion the assessee's claim in this regard has considerable cogency. It is not the case that A....

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....d in the Dharmender Textile case was only that part in Dilip Sheroff case where it was held that mensrea was a essential requirement of penalty u/s 271(1)(c). The Hon'ble Apex Court also observed that if the contention of the revenue is accepted then in case of every return where the claim is not accepted by the AO for any reason, the assessee will invite the penalty u/s 271(1)(c). This is clearly not the intendment of legislature.   3.8 In this regard, we further place reliance of the Hon'ble Apex Court decision in the case of Hindustan Steel vs. State of Orissa in 83 ITR 26 by a bench comprising 3 of their lordships, wherein it was held that "An order imposing penalty for failure to carry out a statutory obligation is the result o....