2014 (1) TMI 980

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.... to 2004-05. 2. As the facts of the case and the issue involved in all the above noted appeals are common and further the appeals are related to the same assessee, hence for the sake of convenience, the same are disposed of with this common order. The facts are taken from ITA No.1602/M/2012 relevant to A.Y 2002-03. ITA No.1602/M/2012 for A.Y. 2002-03 3. During the course of assessment proceedings, the AO disallowed the depreciation of Rs.9,01,484/- on account of non utilization of the assets due to suspension of business during the year under consideration. The disallowance was confirmed upto the level of ITAT. The AO also initiated penalty proceedings. The AO did not agree with the contention of the assessee that the business was ....

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....ear was not only justified but bonafide also as there was no intention of the assessee at that time to close the business permanently. On the other hand the ld. DR has relied upon authorities below. 7. In our considered view, the levy of penalty in the case in hand was not justified. Though the depreciation claim on assets of the assessee had been disallowed and the said disallowance had been confirmed by the higher authorities, but that itself can not be a ground for mandatory levy of penalty. The levy of penalty is a penal action against the assessee for his wrongful act of furnishing of inaccurate particulars of income or for concealment of income. Every case of confirmation of disallowance can not be regarded as a case of furnishi....