TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 517
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....me. The ld. CIT(A), however, confirmed the penalty and dismissed the appeal of the assessee. 3. We have considered the rival submissions and the material on record. The AO noted in the assessment order that the assessee sold one of the buses in the month of February, on which excess depreciation has been claimed. The AO noted WDV of buses as on 01.04.2003 and additions made to the buses and after reducing the value of the bus sold in the month of February, the depreciation was calculated and excess depreciation of Rs. 47,720/- was found on which the penalty was levied. It would indicate that the assessee owned more than one bus in the financial year and also made addition to the same. Thus, there may be a bona fide error on the part of the assessee in claiming excess depreciation because one of the buses was sold at the end of the financial year. The assessee disclosed complete particulars before the AO on which calculation has been made of the depreciation by the AO. There may be some mistake on the part of the assessee in claiming excess depreciation, but the facts clearly disclosed that the mistake of the assessee was rectifiable, which was, in fact, rectified by the AO. On con....
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....ajasthan Spinning and Weaving Mills' case (supra) and concluded in line with this decision that penalty under section 11AC of the Central Excise Act could not be levied in every case of non-payment or short payment of duty and that penalty in respect of section 271(1)(c) of the Income-tax Act would be leviable, subject only to the conditions thereunder. It required the matter to be considered not solely with reference to Dharamendra Textile Processors' case but along with the decision of Rajasthan Spinning and Weaving Mills' case (supra). In the case of CIT v. Reliance Petroproducts Pvt. Ltd., 322 ITR 158 the Supreme Court further explained the matter and finally settled the controversy created in Dharamendra Textile Processors' case (supra). The Supreme Court in this case has analysed the facts in Dilip N. Shroff's case (supra) and found from the facts, that the explanation given by the assessee was bona fide nor did not assessee furnish any inaccurate particulars. It no doubt went on to observe that the element of mens rea was essential. The Supreme Court in Dharamendra Textile Processors' case (supra) had pointed out only to this aspect of the decision in that, there was no nece....
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....on the advice of the assessee's Counsel, could not be treated as an instance of deliberate default. In the case of Chandrapal Bagga vs. ITAT & Another, 261 ITR 67 (Raj) the Hon'ble Rajasthan High Court has held that when the assessee has disclosed the transaction which is the basis for capital gains tax and though wrongly claimed exemption from the capital gains tax, but that cannot be a case of penalty under section 271(1)(c) of the Act. It if has claimed any exemption after disclosing the relevant basic facts and under ignorance of the provisions of the Act, and not offered that amount for tax, in such cases, penalty should not be imposed. In such cases rather it is the duty of the A.O. to ask for further details and tax the income if it is liable to tax. In the case under consideration, we noticed that during the assessment proceedings, the assessee has offered the tax as and when the mistake has come to the notice of the assessee. Similarly, in the case of CIT vs. Sumerpur Truck Operation Union, 203 CTR 205 (Raj) wherein it has been held that merely because assessee's claim of exemption under section 10(24) was not found to be tenable, penalty under section 271(1)(c) of the Act....
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....ion unless he has given finding based on some contrary evidence to disapprove that explanation offered by the assessee which the assessee is not able to substantiate and fails to prove that such explanation is bonafide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him. 15. In the light of above discussion, if we consider the facts of the case under consideration, we find that the assessee has furnished complete facts regarding computation of capital gain, total sale consideration, calculation of long term capital gain, investment in residential house and others. The mistake on the part of the assessee is that the assessee invested a part amount of sale consideration/ capital gain in residential house instead of gross sale consideration and claimed deduction under section 54F.It is relevant to note that for claiming deduction under section 54 of the Act investment of capital gain is the requirement whereas for claiming dedication under section 54F investment of sale consideration is the condition. From the facts of the case it is a clear cut case of bona fide calculation mistake. Such mistakes are rectifiable ....