2019 (1) TMI 1520

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....ent year 2005-06 ITA No. 6567/Del/2013(assessee's appeal) 1. That on the facts and circumstances of the case and in law, the Ld.CIT(A)-XVI ("the CIT(A)") has erred in upholding the order of AO by levying penalty u/s 271(1)(c). 2. That on the facts and circumstances of the case and in law, the Ld.CIT(A)-XVI ("the CIT(A)") has erred in upholding the order of AO by levying penalty u/s 271(1)(c) on additions on account of disallowance of depreciation of Rs. 1,02,719/- on electric fittings. 3. That on the facts and circumstances of the case and in law, the Ld.CIT(A)-XVI ("the CIT(A)") has erred in upholding the order of AO by levying penalty u/s 271(1)(c) on additions on account of Technical Assistance/Know-how expenses of Rs. 35,69,931. ....

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....o add any fresh grounds of appeal and/or delete or amend any of the grounds of appeal." 2. For sake of convenience we shall take up assessment year 2005-06. 3. Brief facts of the case are as under: Assessee is engaged in the business of manufacturing of sheet metal components and assemblies and sub-assemblies, primarily for auto mobiles and white goods sector. In assessment order passed under section 143 (3) of the Act, Ld.AO made following additions: a) disallowing depreciation on electric installation Rs.14,94,166/- b) disallowing depreciation on UPS Rs. 72,559/- c) capitalisation of know-how Rs.35,69,931/- 3.1. Aggrieved by additions made by Ld.AO assessee preferred appeal before Ld.CIT(A), which was dismissed vide order date....

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.... income. It is also observed that assessee had not appealed against the same, before Ld.CIT (A) in quantum proceedings. 9.2. Ld.AO levied penalty for furnishing of inaccurate particulars. Assessee submitted that, it was inadvertent mistake which, he rectified during the assessment proceedings. 9.3. Ld.Sr.DR supported orders of authorities below and submitted that, claiming of excess depreciation amounts to furnishing of inaccurate particulars of income, and therefore penalty deserves to be confirmed. She placed reliance upon decision of Hon'ble Delhi High Court in the case of CIT vs Zoom Communication Pvt.Ltd., reported in (2010) 191 Taxman 179. 10. We have perused submissions advanced by both sides in light of records placed before us. ....

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....ome by the assessee or the assessee must have furnished inaccurate particulars of income. Incorrect claim may not amount to furnishing of inaccurate particulars. Everything depends upon the return filed by the assessee, because that is the only document where the assessee can furnish particulars of his income. When such particulars are furnished inaccurately, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of assessee and such a claim cannot amount to furnishing inaccurate particulars. Th....

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....cal knowhow/ Technical assistance, should have been capitalised by assessee, and therefore amounts to furnishing of inaccurate particulars of income, for which penalty deserves to be confirmed. She placed reliance upon decision of Hon'ble Delhi High Court in the case of CIT vs Zoom Communication Pvt.Ltd., reported in (2010) 191 Taxman 179. 13. We have perused submissions advanced by both sides in the light of records placed before us. 13.1. It is observed that assessee offered explanation which has not been found false by Ld.AO or by Ld.CIT(A). Further in our considered opinion claim of capital versus revenue expenditure itself is debatable and therefore cannot be subject matter of penalty by way of concealment or filing of inaccurate par....