2014 (4) TMI 310

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.... Rs.2,51,440/- on wholly erroneous, illegal and untenable grounds." 2. The relevant facts of the case are that the assessee declared an income of Rs.1,54,72,370/- wherein the AO made additions of Rs.7,32,022/- and Rs.9,666/- u/s 14A and on excess depreciation claimed respectively. 2.1. A perusal of the assessment order shows that qua the dividend income of Rs.63,24,951/- claimed exempt u/s 10(34) of the Act, the AO applying Rule 8D made a disallowance of Rs.8,46,019/-. As a result of this the disallowance worked out by the assessee at Rs.1,12,997/- was held as inadequate and an addition of Rs.7,32,022/-. 2.2. Similarly the claim of depreciation on account of UPS and Printer claimed at 60% was disallowed and limited by the AO to 15%....

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....vt. Ltd. v. CIT (2012) 349 ITR 112 (Del); 5. Geeta Prings (P) Ltd. vs. Asstt. CIT (2012) 247 CTR (Guj.) 620." 4.1. Not convinced by the said explanation the penalty order was upheld on the following reasoning:-  "4.2. In this regard, I have gone through the finding of the Assessing Officer in penalty order and it is found that penalty has been levied on the addition made in the assessment order, against which no appeal has been filed which clearly shows that appellant had no grievance against the addition made. However, since penalty has been levied, appellant has filed the appeal. In this regard, after considering the issue in detail and in totality, it is found that when penalty has been levied on the addition made which has....

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....ged, there is no reason to mechanically impose penalty. 5.1. In the facts of the present case it was submitted that all necessary facts have been brought on record and merely because the disallowance by the assessee u/s 14A according to the AO was not sufficient and he has carried out his own calculation which the assessee did not challenge the fact remains it was argued that this issue is frequently challenged and is a subject matter of debate and merely because the working of the assessee was not accepted by the AO and the assessee has not been challenged, it does not mean that there is some inaccurate particulars filed. It was his argument that may be had the assessee challenged the addition, he could have got relief. Qua the issue of....

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....ion that the assessee has nothing to say. In the facts of the present case it is a matter of record that the assessee has been crying hoarse rihgt for the penalty proceedings itself that on merits had the assessee chosen to agitate the claim of higher depreciation the claim would have been allowed. We find no reason let alone a good reason as to why the said explanation was not considered by the authority. We also find that qua the 14A disallowance the assessee has pleaded that there was full disclosure and it is only a case that disallowance made by the assessee was found to be inadequate which issue had the assessee chosen to challenge may have resulted in relief. The said explanation too warranted a consideration. It is a settled legal p....