2013 (3) TMI 555

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....e at Rs.23,05,08,220/-.   However, the assessment was completed after making disallowance under the head income from business (i) provisions for doubtful debts Rs.23,00,000/-,(ii) disallowance of lease equalization Rs.54,24,303/-, (iii) delayed payment of contribution of PF and ESIC Rs.7,68,234/-, (iv) u/s 14A on dividend Rs.1,09,360/- and (v) excess depreciation claimed on plant and machinery Rs.1,39,20,939/- aggregating to Rs.2,25,19,836/- at an income of Rs.25,30,28,060/- vide order dated 9.3.2005 passed u/s 143(3) of the Income Tax Act, 1961 (in short the Act). On appeal, the ld. CIT(A) while upholding the disallowance of lease equalization charges directed the AO to al low depreciation of routers, switches at 60% as in the case o....

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....se equalization and has restricted the claim of depreciation at the rate of 25%, therefore, there is a conscious and deliberate concealment on the part of the assessee and accordingly he imposed penalty of Rs.2,03,12,504/- being 300% of tax sought to be evaded, vide order dated 16.7.2009 passed u/s 271(1)(c) of the Act. On appeal , the ld. CIT(A) while agreeing with the views of the AO, however, reduced the penalty to 100% of the tax sought to be evaded and accordingly reduced the penalty to Rs.67,70,834/- as against Rs.2,03,12,504/- levied by the AO. 3. Being aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us. 4. In ground No.1, the assessee contended that the order passed by the AO is barred by limitation. 5.....

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.... ld. CIT(A) accepted the assessee's contention and allowed 60% depreciation as claimed by the assessee. On further appeal to the Tribunal by the Revenue, the Special Bench of the Tribunal in DCIT V/s Datacraft India Limited (2010)40 SOT 295 (Mum) (SB) has held that the routers, switches and other ancillary equipments, in the circumstances of the case are to be included in the block of 'Computer' entitled to depreciation at the rate of 60%. Since as per the order of the Special Bench of the Tribunal, the claim of the depreciation has been allowed as claimed by the assessee, therefore, there is no concealment on the part of the assessee and penalty imposed on this account is deleted. The ground taken by the assessee is, therefore, allowed. 9....

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....income got equalized and, therefore, there is no concealment on the part of the assessee. He, further, submits that at the relevant point of time this issue was highly debatable. The Hyderabad Bench of the Tribunal in JCIT V/s Pact Securities and Financial Ltd.(2003) 86 ITD 115 (Hyd) had considered this issue of allowability of lease equalization and held in favour of the assessee. The Delhi Bench of the Tribunal in Vertual Soft Systems Ltd. V/s ACIT, (2010) 38 SOT 412 (Del) on similar facts has held that guidance note of ICAI would be applicable. He further submits that the Tribunal in DCIT V/s M/s Apollo Hospital Enterprises Ltd. in ITA No.1673/Mds/2010 (AY: 1998- 99) dated 25.2.2011 upheld the order of the CIT(A) in deleting the addition....