2016 (5) TMI 1317

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....me are arising out of penalty u/s. 271(1)(c) of the Act. 2. Brief facts of the case are that the assessee in the had claimed depreciation on Power Plant Install Rajshree Cement Ltd. and on the boiler it had claimed depreciation for full year at normal rate of 100% amounting to Rs. 6,52,24,546/-. AO disallowed the claim of depreciation for full year on the ground that boiler was not use for more than 180 days, accordingly allowed only 50% of the claim. The order of AO was confirmed by CIT(A) and subsequently by ITAT observing that boiler was not ready to use on that date. 3. After dismissal of the appeal of the assessee by ITAT, the assessee was served notice dated 25.03.1996 u/s. 274 r.w.s. 271(1)(c) for initiation of penalty. The assesse....

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....wable and concealed the material date when the same was put to use. Ld. DR further argued that the disallowance was confirmed by CIT(A) as well as Co-ordinate Bench of ITAT. Ld. DR further relied upon the order of ITAT, Delhi in ACIT vs. M/s Khanna & Annandhanam reported vide [2013] 13 taxmann.com 94 (Delhi). On the other hand, ld. AR of assessee argued that assessee's appeal before the Hon'ble High Court in quantum appeal is admitted vide order dated 16.09.2008. Hence, substantial question of law on which the disallowance was made has been admitted by the Hon'ble High Court and no penalty can be levied against the assessee. Ld. AR heavily relied upon the judgment of Hon'ble Delhi High Court in CIT vs. Liquid Investment & Trading Co. (ITA N....

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....Tax Appeal No.2368 of 2009. In our view, there was no case made out for imposition of penalty and the same was rightly set aside. The Appeal raises no substantial question of law, it is dismissed, No costs." Further, the Hon'ble Delhi High Court while discussing the issue of penalty wherein substantial question of law framed has been admitted for consideration held as under: "Both the CIT(A) as well as the ITAT have set aside the penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 on the ground that the issue of deduction under Section 14A of the Act was a debatable issue. We may also note that against the quantum assessment where under deduction under Section 14A of the Act was prescribed to the ....