TaxTMI 
TaxTMI 
2016 (12) TMI 1010
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....ty u/s 271(1)(C) of the Act on fringe benefits of Rs. 8,14,180/- arising out of depreciation on motor car. 4. Facts giving rise to this appeal are that the assessee is a limited company, engaged in providing detective and security services. The assessee filed its return of income of FBT for the year under consideration and the assessment was completed and order was passed u/s.115WE(3) of the Act. Subsequently, the Assessing Officer levied penalty u/s.271(1)(d) on the 20% of the total value of FBT. In appeal, the CIT(A) upheld the action of the Assessing Officer. Now, the assessee is in further appeal here before the Tribunal. 5. Ld. AR before us submitted that during the year under consideration the assessee debited vehicle mainten....
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.... of income in order to attract penalty u/s 271(1)(d). For this purpose, Ld. AR placed reliance on the following decision :- (a) Climate Systems India 2007- TlOL-134-ITAT-oEL (lTAT Del) (b) CIT Vs. Escorts Finance Ltd. (2009) 183 Taxmann 453 (Del) (c) CIT Vs. Reliance Petroproducts Pvt. Ltd. (2010) 189n Taxmann 322 (SC) (d) ADIT(Intl.Taxation)) Vs. Precision Drilling (Cyprus) Ltd. (ITA No. 1604/Ahd/2009) (e) Hindustan Coca-Cola Marketing Company (P) Ltd. Vs. DCIT (ITA No. 3225/Del/2013 dated 29.4.2015) 6. On the other hand, Ld.DR relied on the orders of authorities below. 7. We have heard the rival submissions, perused the orders of the authorities below and the case law relied on by the parties. The assessee company filed its return ....
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.... (Appeals) held that the assessee itself admitted that this was not declared in the return of FBT due to inadvertent mistake and therefore it is a clear case of negligence on the part of the assessee which has resulted into concealment of income. Therefore it is a case of submission of inaccurate particulars and concealment of income. 9. In this appeal the assessee is challenging the order of the CIT (Appeals) in sustaining the order of the Assessing Officer in levying penalty U/s 271(1)(c) of the Act on the addition of fringe benefits of Rs. 8,14,180/- representing depreciation on motor car. It is the submission of the assessee that this is the very first of year of FBT provisions coming into effect .i.e assessment year 2006-2007. Being t....
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....stake in computing the correct fringe benefits being first year of FBT provisions coming into statute. The assessee further contended that there was no default of any item in computing fringe benefits in subsequent assessment years by the assessee. The assessee further contended that the tax effect on the said fringe benefit of depreciation comes to 2.74 lakhs and whereas the assessee has paid income tax of Rs. 241.93 lakhs and fringe benefits tax of Rs. 42.64 lakhs and this shows that there cannot be any malafide intention to save a meager tax of Rs. 2.74 lakhs. It was further submitted that the Assessing officer and the CIT (Appeals) did not find that the details or particulars furnished by the assessee or the explanation of the assessee ....
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..... 17. The Assessing Officer rejected the above explanation and held that voluntary surrender of income does not avoid penalty. The Commissioner of Income Tax(A) held that the wrong claim would not have come to light if the case had not been taken for scrutiny but as per penalty order and discussions made hereinabove, we clearly observe that the present case is not related to the wrong claim of the assessee. Hence, the Commissioner of Income Tax(A) upheld the penalty on wrong basis and relying on irrelevant citations. As per factual matrix, the assessee did not include value of conveyance expenses to the value of FBT. Obviously the voluntary surrender during assessment proceedings does not create any immunity from penalty for the assessee ....
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....xplanation offered by the assessee during penalty proceedings was acceptable which was wrongly rejected by the AO and the Commissioner of Income Tax(A) and penalty was not imposable on the assessee in this regard and we cancel the penalty orders. Thus, ground nos. 1, 2 and 3 of the assessee are allowed." 11. In the case on hand also the Assessing Officer/CIT(Appeals) failed to prove that the explanation of the assessee that only by oversight and inadvertently the depreciation on motor car was not included in the value of fringe benefits. We see no reason other than an inadvertent mistake occurred in not including the depreciation on motor car in the value of fringe benefits because the assessee itself returned the fringe benefits in....