TaxTMI 
TaxTMI 
2010 (9) TMI 586
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....overed by Hon'ble Supreme Court's judgment in the case of CIT Vs Reliance Petroproducts Pvt Ltd (322 ITR 158) inasmuch as there is nothing more than rejection of depreciation claim made by the assessee, and particularly as there were several judicial precedents in favour of the assessee on admissibility of the said claim, which has led to the impugned penalty having been levied on the assessee. It is pointed out that while the assessee's claim is that, on the admitted facts of the case, the assessee is legally entitled to claim depreciation in respect of assets leased out to its customers, the case of the revenue is that the depreciation so claimed is not admissible inasmuch as the transaction between the assessee and its customer is a financing transaction, and not a genuine leasing transaction. There is no dispute about the facts of the case, but the dispute is confined to the tax implications of the transactions in question. That is, according to the learned counsel, purely a matter of interpretation of law, and there is no concealment of facts. It is submitted that the quantum addition is pending before a Special Bench of this Tribunal but the very fact that a Special Bench had....
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....ssessee has been rejected by the Assessing Officer, as also in appeal, it is clear that the claim of the assessee is neither correct nor bona fide. ... 4. In our considered view, a plain reading of the assessment order shows that there is no dispute about the facts of the case and that perceptions of the assessee and the revenue differ only on the legal implications of these facts. In assessment order for the assessment year 1998-99, for example, Assessing Officer observes as follows: "....The scrutiny of the terms of the above lease agreements, in totality, shows that though it has been asserted repeatedly in the agreement by the assessee company and the lessee, that it is the assessee company (not the lessee) who is absolute owner of the leased asset, the lessee having taken possession of the asset only as a lessee, and it is the assessee (not the lessee) who would be entitled to depreciation on the actual cost of leased assets under the Income Tax Act, as the legal owner of the asset, but there are certain terms in the above lease agreement which are contrary to or incongruous to such claim of legal and absolute ownership of the company over the leased asset and also contr....
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.... conscious effort. On the contrary, this is a situation in which the assessee has acted in very transparent and straight forward manner. There cannot be any concealment of income in such a situation. 61. The expression 'furnishing of inaccurate particulars of income' has also not been defined in the Act. The expression 'inaccurate' refers to 'not in conformity with the fact or truth' and that is the meaning which, in our considered view, is relevant in the context of 'furnishing of inaccurate particulars'. The expression 'particulars' refers to 'facts, details, specifics, or information about someone or something'. Therefore, the plain meaning of the expression 'furnishing of inaccurate particulars of income' implies furnishing of details or information about income which are not in conformity with the facts or truth. The details or information about income deal with the factual details of income and this cannot be extended to areas which are subjective such as the status of taxability of an income, admissibility of a deduction and interpretation of law. The furnishing of inaccurate information thus relates to furnishing of factually correct details and information about income.....
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....ssessee". It is not even Assessing Officer's case that the facts stated in the return are found to be erroneous, or the assets which were claimed to have been leased out did not exist. The controversy is confined to the question as to, on a proper construction of the applicable legal position, who is entitled to depreciation on assets said to have been leased by the assessee to its customers. In our considered view, in view of the legal position as discussed above, a legal claim per se, right or wrong, cannot amount to furnishing of inaccurate particulars of income. 7. We must however add that merely because there is no concealment of particulars, it cannot be said that it is not a fit case for imposition of penalty. It is quite possible that an assessee may not furnish any inaccurate particulars of income and yet he can be said to have concealed income. That can possibly be in a situation in which the assessee is hit by the deeming fiction and the assessee does not have a reasonable explanation for the legal claim made by the assessee. However, even assuming that deeming fiction under Explanation 1 to Section 271 (1)(c) can be triggered by a wrong legal claim, it canno....