TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 1342
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.... this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions deleted the penalty. 3. Now, the revenue is in appeal. 4. The Ld. Departmental Representatives vehemently argued that Ld. CIT(A) was not justified in deleting the penalty. He submitted that ex facie, the assessee claimed higher depreciations which were not available to the UID kits. Therefore, the AO was justified in imposing the penalty which was a clear case of concealing the particulars of incomes. 5. On the contrary, the Ld. Counsel of the Assessee filed written submissions and reiterated the submissions as made in the written submissions. The submissions of the assessee are reproduced as under:- Submissions- 1. Firstly, we strongly rely upon the written submissions filed before the CIT (A) in penalty appeal [at reproduced at Pg. 2-5 of the order of CIT (A)]. 2. Assessment and penalty - separate proceedings: It is pertinent to note that the AO has levied the penalty only & only on the basis of findings recorded by the AO in the assessment order. It is settled that assessment and penalty proceedings are separate and distinct from each other. Kindly refer Durga Kamal Ri....
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....or a tool of the trade of the taxpayer or it is merely a space where the taxpayer carries on his business. For this purpose the use which is made of the subject-matter under consideration is to be kept in view. If, as noted above, the building, structure or a part thereof is something by means of which the business activities are carried on, it would amount to plant but where the structure plays no part in the carrying on of these activities but merely constitutes a place within which they are carried on, it cannot be regarded as a plant." 3.3.2 A full Bench of the Hon'ble Supreme Court in the case of CIT v/s Karnatka Power Corporation (2000) 162 CTR (SC) 249 : (2001) 247 ITR 268 (SC) held at p. 268 (short notes) that; "The question whether a building can be treated as plant, basically, is a question of fact and where it is found as a fact that a building has been so planned and constructed as to serve an assessee's special technical requirements, it will qualify to be treated as plant......" 3.3.3 In ACIT v/s Container Corporation of India Ltd. (ITAT Delhi 'B' Bench) & DCIT v/s Datacraft India Ltd. (infra) (kindly refer Para 5.2 reproduced in page 2 & 3 of....
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....(Cal). When the issue is debatable, then penalty is not required as per the ratio laid down in the case of CIT v. Harshvardhan Chemicals 186 CTR 552 (Raj.). By keeping in mind the ratio laid down in the case of CIT vs. P Natarajan, 266 ITR 219 (mad.), we are of the view that in the instant case penalty is not required. Therefore, we decline to in interfere with the order of CIT (A) which is hereby upheld alongwith the reasons mentioned therein." 7. Supporting case laws: 7.1 ITO v/s Samiran Majumdar (2006) 101 TTJ 0501 (Cal.) (DPB 4-7) wherein, it was held Depreciation-Rate-Printer and scanner usable with computer system-Printer and scanner are integral part of computer system- They cannot be used without the computer-Therefore, they are to be treated as computer for the purpose of allowing higher rate off depreciation i.e., 60 per cent- CIT vs. Karnataka Power Corporation (2000) 162 CTR (SC) 249 : (2001) 247 ITR 268 (SC) and CIT vs. Kanodia Warehousing Corpn. (1980) 121 ITR 996 (All) applied. "6. We further find that Inspector after verifying the function of the printer and scanner reported that it runs with the help of computer and the said machine is external device a....
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....fore, rejected." 7.2 DCIT v/s Datacraft India Ltd. (2010) 45 DTR 121 (Mum. Trib) (SB) wherein, it was held that "The routers and switches in the circumstances of the case, are to be included in the block of 'computer' entitled to depreciation @ 60 per cent." In the said case, the Hon'ble Special Bench first disagreed with the definition given of computer system u/s 36 (1) (xi) and thereafter, it was held that "As per the General Clauses Act, 1897, if a particular word is not defined in the Central statute then meaning given to such expression under General Clauses Act may be considered for guidance and adoption in the former enactment. However, it is noticed that the word 'computer' has not been defined therein. Under such circumstances meaning of an expression has to be understood by applying the principles of statutory interpretation i.e., in this context we have to be give a meaning to be expression 'computer' not merely going by the dictionary meaning but by applying common parlance and commercial parlance tests as well as by analysing the intendment of providing for higher rate of depreciation. We may refer to several case law to analyse....
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.... on facts as even on merits, it cannot be held that penalty is liveable in the instant case." 8.3 Again, in the case of ACIT v/s M/s Shiv Vilas Resorts Pvt. Ltd. in ITA No. 746/JO/2012 vide order dated 10.04.2015 has held that "5. We have heard the rival contentions of both the parties and perused the material available on record. The issue whether the depreciation on crockery and cutlery is allowed 100% and 80% in case of blanket and linen is debatable. This claim of the assessee was accepted by the Assessing Officer in A. Y 2007-08. The assessee's claim is bonafide during the year under consideration but in A. Y 2008-09, the assessee revised the depreciation claimed during the assessment proceedings. The assets had been disclosed by the assessee, therefore, no inaccurate particulars of income has been furnished. We, therefore, uphold the order of the Ld. CIT (A)." 8.4 In CIT v/s Manibhai & Bros (2007) 209 CTR (Guj)/46 ITR 501 (Guj), it was held that the CIT (A) and the Tribunal having found that the assessee had not intention to conceal facts when it made incorrect claim of depreciation which was withdrawn by the assessee, penalty u/s 271 (1) (c) was not leviable for....