TaxTMI 
TaxTMI 
2013 (12) TMI 713
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....nbsp; (2) Addition due to Under valuation of closing WIP of Rs. 1,92,885/-. (3) Disallowance on account of excess claim of deduction u/s 80HHC. (4) Disallowance of Penalty paid in pursuance of order of the Commissioner of Central Excise. (5) Disallowance of Depreciation in respect of film city and C-35. 3. The Assessing Officer also initiated penalty proceedings u/s 271(1) (c) of the Income Tax Act and imposed a penalty of Rs.29,99,293/- vide order dated 29.04.2010. 4. Aggrieved with the order the assessee filed appeal before Ld. CIT (A) and LD CIT (A) deleted the penalty imposed by Assessing Officer by recording his findings qua each disallowance/addition. The operative part of findings of Ld. CIT (A) are reproduced below: Brought forward losses of M/s Mandakini Aqua Minerals Pvt. Ltd. "12. I have considered the submissions of the appellant and the penalty order. On the basis of facts brought on record it is evident that at the point of filing the return for A. Y. 1999-00, the appellant company i.e. Super Cassettes Industries Ltd. was eligible to claim the losses of the amalgamating company i.e. Mandakini Acqua Mineral Pvt....
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.... of excess claim of deduction 80HHC. 26. Identical issue involving levy of penalty had cropped up in appellant's own case for A. Y. 2000-01, 2001-02 and 2004- 05. The relevant portion of my predecessor's order on this issue reads as under: "5.5 The submission given by the appellant has been considered and it is observed that the disallowance made by the Assessing Officer was modified by the CIT (A) and the Hon'ble ITAT had also given the direction to re-compute the deduction u/s 80HHC. Thus, considering the fact of the case and the items which were to be excluded for the purposes of calculating deduction u/s 80HHC, the Hon'ble ITAT also relied on the decision of CIT vs. K Ravindernathan Nair 295 ITR 228. In the aforementioned judgment, the Hon'ble Supreme Court had reversed the finding of the High Court as well as the Hon'ble ITAT by deciding the issue in favour of the Revenue. Thus, till the stage of High Court the decision was in favour of the appellant, which goes to show that this was a debatable issue. 5.6 Similarly, coming to the issue of sale of scrap the Hon'ble Madras High Court in th....
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....of expenditure of Rs.2.50 lacs is hereby deleted. In the result this ground of appeal stands allowed. Depreciation in respect of film city 37. I have considered the penalty order and the submissions of the appellant on this issue. From the facts brought on record it emerges that the claim for higher rate of depreciation @ 25% on studio building as against the rate of 10% provided in the I. T. Rules was based upon the judicial decisions of various High Courts which were in favour of the assessee. As it turned out the Supreme Court later on reversed these orders by holding that depreciation on theatre building and other such buildings had to be allowed only at the rate prescribed in the I. T. Rules i.e.10%. Thus the issue regarding eligible rate of depreciation on Studio building is a debatable issue a remained contentious till it was finally settled by the Supreme Court. The action of the appellant in claiming higher rate of depreciation based upon judicial decisions of various high courts cannot therefore be termed as concealment. Accordingly, penalty on this ground is deleted." 5. Aggrieved with the deletion of penalty the revenue is in appeal before u....
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.... filing of return. The assessee was under bonafide belief that it will continue to carry on the business of amalgamating company for a period of five years and, therefore, had claimed the loss of amalgamating company. At the time of filing of return it was not known that assessee will discontinue its business. Therefore, it was argued that it was not false claim and Ld. Commissioner of Income Tax (appeals) had rightly deleted the penalty alter relying upon the case law of CIT vs. Reliance Petro Products Ltd. (supra) decided by Hon'ble Supreme Court. 9. As regards penalty imposed by Commissioner of Central Excise, it was submitted that Ld. CIT (A) had reduced the addition from Rs.3 lacs to Rs.2.5 lacs and, therefore, it was a debatable issue and where more than one view was possible the penalty u/s 271(1) (c) cannot be imposed and, therefore, Ld. CIT (A) had rightly deleted the penalty on this account also. As regards penalty due to excessive claim of depreciation, it was argued that assessee had claimed depreciation @ 25% on studio buildings on the basis of decision of Madras High Court in the case of A. V. Mevyyappa Chettiar and the decision of full bench of Kerla High Court in t....