2016 (2) TMI 167

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....tted that the Assessing Officer levied penalty under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act') by an order dated 28.03.2006 on the ground that the assessee has failed to make true and correct statement of income and concealed the particulars of its income by claiming bogus depreciation. The Ld.counsel further submitted that the assessee claimed for depreciation to the extent of Rs. 17,27,16,480/- being 50% depreciation on the asset which was purchased and leased out in the second half of the financial year 1995-96, which was disallowed. The Assessing Officer has also disallowed depreciation on the asset relating to three more lease transactions which were entered into by the assessee during the relevant prev....

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....e respective persons. Accordingly, the assessee purchased the same and leased it back to the respective persons. Therefore, the claim of the assessee for depreciation cannot be construed as bogus. The assessee never intended any transaction with an intention to reduce the tax liability of the assessee. Therefore, according to the Ld. counsel, a mere claim of depreciation cannot be construed as furnishing of inaccurate particulars of income. The Ld.counsel placed his reliance on the judgment of Apex Court in Mak Data P. Ltd. v. CIT (2013) 358 ITR 593 and submitted that merely because the assessee surrendered the claim of depreciation and offered the same for taxation, it cannot be construed that the assessee has furnished inaccurate particul....

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....he invoices produced before the Revenue authorities are bogus and there was no purchase of windmills as claimed by the assessee. The Assessing Officer ultimately came to a conclusion that the assessee is not the owner of the windmills, therefore, the assessee is not entitled for depreciation. The Assessing Officer also found that in the case of transaction with A.V.S. Industries Ltd., out of the three suppliers two of them were found to be untraceable. With regard to M/s Mid East Integrated Steel Ltd., the Assessing Officer found that M/s Mid East Integrated Steel Ltd. purchased the assets earlier and thereafter forged the sale invoices by inserting the name of the assessee as buyer. The Assessing Officer examined the supplier and the suppl....

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.... shows that the assets leased to M/s Mid East Integrated Steel Ltd. are forged one. In fact, the suppliers also clarified that no invoice was issued in the name of the assessee. Accordingly, the CIT(Appeals) confirmed the addition made by the Assessing Officer on the basis of the enquiries conducted. 6. Now, the question arises for consideration is whether the assessee has furnished inaccurate particulars of its income or concealed the particulars of its income. The fact remains that the assessee is a banking company and claimed before the Assessing Officer that it entered into the sale and lease back transaction. The claim of the assessee that the asset was originally belonged to a particular person, was proved to be wrong. In fact, the i....