2014 (6) TMI 745

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....return of income for A.Y 07-08 on 27.10.2007 declaring total income of Rs. 3,54,283/-. Assessment was framed under section 143(3) vide order dated 22.12.2009 and the total income was determined at Rs. 24,73,270/-. While framing the assessment, A.O apart from making various additions also disallowed the claim of depreciation on the plant and machinery. A.O was of the view that Assessee had claimed depreciation at 35% instead of 15%. The excess claim of depreciation was disallowed by the A.O and on the aforesaid excess depreciation of RS. 9,39,469/- claimed by the Assessee. A.O vide penalty order dated 05.05.2010 levied penalty u/s. 271(1)(c) of RS. 3,16,225/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) c....

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....ubmitted that the penalty levied by the A.O be deleted. The ld. D.R. on the other hand relied on the order of A.O and CIT(A) and further placed reliance on the decision in the case of CIT vs. Zoom Communications Pvt. Ltd. 327 ITR 510 (Del). 6. We have heard the rival submissions and perused the material on record. In the present case, the Assessee was eligible for depreciation at 15% but had claimed depreciation at 35%. During the course of assessment proceedings, it is assessee's contention that when the mistake was brought to his notice it accepted the mistake. Assessee has further contended that the mistake arose due to the fact that the depreciation at 35% was allowable to Assessee under section 32(1)(iia). Due to inadvertent mistake, ....

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.... claim in the return of income and has also furnished all the material facts relevant thereto, the disallowance of such claim cannot automatically lead to the conclusion that there was concealment of particulars of his income by the assessee or furnishing inaccurate particulars thereof. What is to be seen is whether the said claim made by the assessee was bona fide and whether all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty under s. 271(1) (c) of the Act. In the case of Reliance Petro Products (supra) it has been held that " a mere making of claim which is not sustainable in law, by itself, would not amount to furnishing of inaccurate parti....