TaxTMI 
TaxTMI 
2014 (5) TMI 110
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...., meter room, sub-stations for DG sets, store, dhobi ghat, labour colony, security barracks and security posts. The assessee claimed 100% depreciation by taking the same as temporary construction. However, the Assessing Officer disallowed the claim and restricted the depreciation @ 10% only. The second issue on which the addition was made to the income of the assessee was on account of not allowing depreciation @ 20% on the boundry wall and the depreciation was restricted to 10%. The other addition was made in respect of payment of PF/ESI paid beyond the time limit and the addition was made by invoking the provisions of section 2(24)(x) read with section 36(1)(va). The penalty proceedings u/s 271(1)(c) were initiated. Similar addition was also made in the Assessment Year 2003-04 of Rs.90,76,020/-on account of depreciation disallowed on temporary erections. The assessee filed appeal against these additions before the CIT (A) who has dismissed the assessee's appeal and confirmed the Assessing Officer's action vide his order dated 14.05.2009. The ITAT has also confirmed the addition vide order dated 09.03.2010. 2.1 The Assessing Officer has levied penalty u/s 271(1)(c) in b....
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....ndings recorded or conclusion drawn in deciding the quantum appeal, are neither conclusive nor binding. For this proposition reliance may be placed on the judgment of Hon'ble Kerala High Court in the case of CIT V s. Pawan Kumar Dalmia [1987] 168 ITR 1 and the judgment of the Hon'ble Allahabad High Court in the case of Banaras Texturium Vs. CIT [1988] 169 ITR 782 and also the judgment of the Hon'ble Delhi High Court in the case of CIT Vs. Chetandan Lachhmandas [1995] 214 ITR 726. 4.2 The considerations in penalty proceedings are different from those in quantum proceedings. It is trite law that merely because an addition has been made and confirmed in the appeal, levy of penalty is not automatic. In National Textiles Vs. CIT [2001] 249 ITR 125 the Gujarat High Court held that it is not enough for the purpose of penalty that the amount has been assessed as income, the circumstances must show that there was animus i.e. conscious concealment or act of furnishing inaccurate particulars on the part of the assessee. In the present case, the appellant's conduct and the explanation offered by it shows that there was no conscious or intentional act of ap....
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....tion which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." From the above Explanation it is evident that the Explanation is a deeming provision and if the assessee's case falls within the ambit of circumstances provided in Part A or Part B of the Explanation, it will be deemed that the amount added or disallowed in computing the total income of the assessee represents the income in respect of which particulars have been concealed. Part A of the Explanation would be applicable in circumstances - (i) where a person fails to offer an explanation; (ii) where a person offers an explanation which is found by the Assessing Officer or by the Commissioner of Income-tax (Appeals) to be false. Part B....
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....ious concrete built-up constructions used for office and other activities in assessment years 2002-03 & 2003-04. In assessment year 2002-03 penalty has also been imposed in respect of the disallowance of depreciation on boundary wall and disallowance in terms of section 36(1)(va) read with section 2(24)(x) of the Act. It is repeatedly held by the Courts that the penalty on the ground of concealment of particulars or non-disclosure of full particulars can be levied only when in the accounts/return an item has been suppressed dishonestly or the item has been claimed fraudulently or a bogus claim has been made. When the facts are clearly disclosed in the return of income, penalty cannot be levied and merely because an amount is not allowed or taxed to income, as it cannot be said that the assessee had filed inaccurate particulars or concealed any income chargeable to tax. Even if some deduction or benefit is claimed by the assessee wrongly but bona fide and no malafide can be attributed, the penalty would not be levied. In this context, reliance is placed on the judgment of the jurisdictional High Court in CIT Vs. Vibros Organics Limited: 159 Taxman 56/206 CTR 582 (Delhi). In this cas....
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....aves leave to add, to alter, or to amend any grounds of the appeal raised above at the time of the hearing." 3. While pleading on behalf of the revenue, ld. DR submitted that assessee is a group concern of JP Group. The assessee is running and operating a golf course and other hospitality services. For providing hospitality services to the customers, the assessee has developed infrastructure for the employees of the resort, i.e. administrative office, guest house for senior officers, staff mess, workshop, meter room, sub-stations for DG sets, store, dhobi ghat, labour colony, security barracks and security posts and claimed deprecation @ 100%. These concrete built structures have been used by the assessee for their offices, store, workshop and residence of the employees. The depreciation is allowable u/s 32 of the Income-tax Act, 1961 read with Rule 5 of Income-tax Rules, 1962. The Rule provides that depreciation shall be calculated @ percentage specified in the Second Column of the Table in Appendix-I. Part 1 of Appendix I provides depreciation on building and depreciation @ 100% is allowable only on purely temporary erections, such as, wooden structures. The construction on wh....
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....s nor RCC roofs, hence they were not concrete structures. Ld. AR also submitted that these structures were completely dismantled in the financial year 2007-08. Finally, he submitted that the order of CIT (A) may be sustained. 5. We have heard both the sides. We have also perused the paper books submitted before us. The following facts are undisputed : The assessee was granted sanction to erect temporary buildings and facilitate the development of the golf course and other facilities. Initially various sanctions granted to assessee for which various temporary buildings were erected which are evident from page 3 of the paper book where the details of the plan sanctioned are as under :- a. Vide sanction letter no.PLG/BP/114B/10056 dated 12.09.2001 1. Half-way Hut & Service Station, Toilets 2. Time Office 3. Maintenance Building 4. 450 KVA Sub-Station 5. Fuel Storage 6. 250 KVA Sub-Station 7. Landscape Plan Golf Area 8. Cottages 9. Health Club  ....