TaxTMI 
TaxTMI 
2019 (3) TMI 1003
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....o Port Trust, Chennai, on the same day, where he was undertaking certain works for the Port Trust and the question in the assessment proceedings arose as to whether the assessee could claim depreciation in respect of these three Pay Loaders for the assessment year 2000-01. The Assessing Authority held that since the assessee had not actually put to use these three Pay Loaders during the previous year, as the same were admittedly purchased on the last date, namely 31.3.2000 and the place delivery of the Pay Loaders, was either at Tiruvallur or Pondicherry, was not established and the three Pay Loaders could not have reached the work place at Chennai Port before the end of that date and therefore, the assessee was not entitled to depreciation. The penalty proceedings under Section 271(1)(c) of the Act for concealment of income and for filing of inaccurate particulars were also initiated by the Assessing Authority. 3. The Assessee, during the course of assessment proceedings, claimed initially that the delivery of these three Pay Loaders was taken at Pondicherry at about 2.30 and they were brought to Chennai Port by 9.30 PM and therefore, the said three Pay Loaders were put to use be....
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....n when they followed whatever the department had wanted, prosecution proceedings were also initiated against the appellant. I had gone through the assessment records. There was a prima facie evidence established by the assessing officer regarding the wrong claim of depreciation of the appellant. Since the appellant had accepted under whatever circumstances, the same has been upheld by me vide my order in ITA No.156/2003-04 dated 16.9.2004. That appeal was only filed when once the 271(1)(c) was initiated. In order to strengthen the case of penalty, it is merely not sufficient to take advantage of surrendering of the claim with few inquiries. They are incomplete inquiries and evidences. They cannot establish that the appellant had concealed true particulars of the claim of depreciation. The assessing officer has to prove the concealment. Mere repetition of assessment order in penalty proceedings is not adequate to sustain the levy of penalty under section 271(1)(c). To achieve this purpose, he has to make additional effort in establishing the concealment of income. Concealment of income cannot be inferred merely from assessment order. The burden is on the assessing officer in pen....
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....he penalty levied by the Assessing Officer is confirmed." 7. The Assessee has, thus, approached this Court by way of the present appeal under Section 260A of the Act. The appeal was admitted by a Coordinate Bench of this Court on 31.3.2009, on the following substantial question of law. "Whether the Appellate Tribunal is correct in law in sustaining the levy of penalty u/s 271(1)(c) of the Act on the rejection of claim of depreciation which was surrendered in the course of the assessment proceedings and further on the claim of certain expenses which claim was reversed in the same proceedings by the Appellant even though there was total violation of the principles of natural justice as well as the Doctrine of Fair Procedure?" 8. The learned counsel for the assessee, Mr.Kaushik, urged before us that the assessee was entitled to claim depreciation in respect of the said three Pay Loaders even though they were purchased on the last date of the previous year, namely on 31.3.2000. He relied upon several case laws to support his contention, namely (i) CIT v. Geo Tech Construction Corporation [(2000) 112 Taxman 373 (Kerala)], (ii) CIT v. Premier Industries (India) Ltd. [(2008) 170 T....
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....reciation was based on the bona fide belief and disallowance of the said claim on a difference of opinion was made, the same could not be treated as concealment of income by the assessee, particularly when all particulars in respect of the said claim were fully furnished in his return of income. 12. The Supreme Court, in the case of Commissioner of Income Tax v. Reliance Petroproducts (P) Ltd. [(2010) 189 Taxman 322 (SC)] held that the penalty under Section 271(1)(c) of the Act cannot be imposed merely because the assessee had claimed an expenditure which claim was not accepted or was not acceptable to the Revenue, that by itself would not attract penalty under Section 271(1)(c) of the Act. 13. The learned counsel for the Revenue, however, relied upon the following the judgments in Commissioner of Income Tax v. Zoom Communication Pvt. Ltd. [ITA No.07/2010 dated 24.5.2010 - Delhi High Court] and Mak Data P. Ltd. v. Commissioner of Income Tax-II [SLP (C) No.18389 of 2013 dated 30.10.2013], in support of her contention that the penalty was rightly levied by the Assessing Authority and upheld by the Tribunal. 14. Relying upon Mak Data P. Ltd. supra, the learned counsel for the Reven....
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....concealment on the part of the assessee at all. On the contrary, the facts relating to purchase of three Pay Loaders in question on the last date of the previous year was categorically stated and supported by the production of purchase invoices before the Assessing Authority. The statement of the assessee regarding the place of delivery was recorded much after the said date of delivery, namely, during the course of assessment proceedings, which was after about three years. Even from the extract of the statement produced in the assessment order, if it could be inferred that the assessee was confused about the place of delivery at Tiruvallur or Pondicherry, it could not be said that the statement of the assessee was false because there is no rebuttal of the fact that the Pay Loaders were available at Chennai Port before the last day was over on 31.3.2000 and was kept ready for use. The assessee was able to produce the relevant evidence before the Assessing Authority as well as Commissioner of Income Tax (Appeals), who set aside the said penalty holding that the three Pay Loaders in question were ready to be used on the last date of previous year. The case laws cited by the learned co....