AI Drafter 
TaxTMI 
TaxTMI 
2015 (9) TMI 59
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....on account of excess claim of depreciation of Rs.60,264,101/-. 2. The Ld.CIT(A) erred in law and on facts in deleting the penalty U/s.271(1)(c) of the Act on concealed income on account of deduction U/s.80IA of Rs.5,17,88,200/-. 3. The Ld.CIT(A) erred in law and on facts in deleting the penalty U/s.271(1)(c) of the Act on account of excess claim of deduction U/s.80IB of Rs.1,29,46,027/-. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Officer since the assessee has failed to disclose his true income. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the AO be restored. The appellant craves leave to amend or alter any....
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....d the penalty. 4.1. The ld.CIT-DR could not controvert the submission of the ld.counsel for the assessee. However, he supported the penalty order. 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that in the AY 2002-03, the Hon'ble ITAT in respect of the penalty levied on excess depreciation, deleted the penalty in ITA No.846/Ahd/2007 & ITA No.253/Ahd/2008 in para-38 by observing as under:- "38. We find from the above that the CIT(A) has deleted the penalty on the premise that this disallowance of depreciation is basically for the reason that after allowing depreciation in assessment year 2001-02, the WDV has reduced and accordingly the claim....
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....er of the Tribunal for the earlier assessment year 2002-03 cancelling the penalty imposed u/s.271(1)(c) of the Act. Accordingly, the Ground No.1 of the revenue's appeal is dismissed." 5.2. In respect of penalty levied with regard to disallowance of claimed depreciation of deduction u/s.80IA of the Act, the Coordinate Bench in ITA No.951/Ahd/2008 for AY 2002-03 (ITAT Bench "D" Ahmedabad), the Tribunal dismissed the appeal of the Revenue, by observing as under:- "33. In view of the above facts, we find that the assessee has made a claim of depreciation u/s.80IA of the Act on the basis that it had set up a new industrial undertaking and accordingly is eligible for deduction. The Assessing Officer disallowed the claim made by the assessee....
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....he assessee also put the certificate of the chartered Accountant as required u/s.80IA(7) of the Act which also clearly demonstrate the bona fide of the assessee in making this claim. In view of the above explanation of the assessee, we find that that it is a difference of opinion on legal point of view and the assessee's explanation has never been held to be false and without that the penalty u/s.271(1)(c) of the Act cannot be levied in the similar circumstances, (from unreported decision), the Hon'ble jurisdictional High Court in Tax Appeal No.430 to 432 of 2006 in the case of JCIT vs. Kiran Sytex Private Ltd. held that penalty levied for claim of deduction u/s.80HHC of the Act which was disallowed while the claim of the assessee was that ....
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....sions. We find that the issue of deduction u/s.80-IB of the Act was highly debatable in nature. As the time of filing the return for the assessment year 2004-05, there were pronouncements by the Hon'ble Courts in favour of the assessee. The CIT(A) has deleted the penalty by observing that similar addition made in the earlier assessment year 2003-04 was deleted by ITAT vide order dated 24.07.2009 and also that at the time of making the claim by the assessee, there were several decisions in favour of the assessee. Ld. CIT(A) has further observed that in any case, this issue was debatable and on such debatable issue, penalty u/s.271(1)(c) could not be levied. We find that this issue being debatable and there being decisions in favour of the as....