TaxTMI 
TaxTMI 
2016 (8) TMI 1481
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....s, the AO noticed that the assessee had debited depreciation amounting to Rs. 7,24,90,480/- in the profit and loss account. On perusal of the depreciation chart furnished by the assessee, the AO noticed that the assessee had claimed depreciation to the tune of Rs. 5,61,489/- @ 50% on truck account (before 01 OCT 2009). The AO asked the assessee vide entry sheet dated 11-03-2013 as to why the depreciation claimed @ 50% on the old truck purchased from NBI finance may not be disallowed and the same may not be calculated as per normal rate of depreciation on truck i.e. @ 30% as these trucks were old and not purchased in first time. As such, these old trucks cannot be said a new plant and machinery. Before the AO, the ld. AR of the assessee submitted that the assessee had purchased the truck as an addition to its assets, hence these were new assets for assessee company and the depreciation claimed at 50%. The assessee filed a revised chart of depreciation in which he calculated depreciation @ 30% on old trucks purchased from NBI Finance. The assessee had finally claimed total depreciation of Rs. 7,03,22,480/- after rectifying the mistake.The unabsorbed depreciation was carried forward t....
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....assessee carried the matter before the ld. CIT(A) who has confirmed the penalty of Rs. 7.50 lacs u/s 271(1)c) of the Act imposed by the AO (DCIT, Circle- 2, Jaipur). The conclusive observation of the ld. CIT(A) is summarized as under:- During appellate proceedings, it was the contention of the assessee that for it the old trucks purchased from the finance company were 'new' and that is why it claimed depreciation @50% which was available for the new trucks purchased during the limited period from 01.01.2009 to 01.10.2009. In support of its contention, the appellant placed reliance on the definition of the word 'new' as per Merriam-Webster dictionary as "having been seen, used or known for a short time". Thereafter, by reproducing the definition of 'new' as per the dictionary (Page 6-7 of the order), the CIT(A) held that the appellant chose that part of the definition which suit it partly and ignored the other parts of the definition. In its opinion, 'new' truck means the truck which was not used earlier for any purpose and on which no depreciation was claimed earlier. Even if the definition as suggested by the appellant is presumed, still the appellant failed to demonstrate what....
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....ncome or for furnishing inaccurate particulars of income. chose that part of the definition which suit it partly and ignored the other parts of the definition. In its opinion, 'new' truck means the truck which was not used earlier for any purpose and on which no depreciation was claimed earlier. Even if the definition as suggested by the appellant is presumed, still the appellant failed to demonstrate what was that 'short period' of use of trucks by the earlier owner i.e. the finance company. It was the contention of the appellant that it was a mistake. It is difficult to comprehend how the appellant company can commit such a mistake when the professional expertise was available to it. It is therefore held that the explanation put forth by the appellant in claiming depreciation at higher rate is not bonafide and the appellant failed to substantiate its explanation. It is difficult to imagine how an old thing could be treated as 'new' in the hands of a new owner. It is therefore, held that the claim of depreciation on old trucks at higher rates was patently wrong. The appellant relied upon a number of case laws for cancellation of penalty imposed by the AO. In this regard, it ....
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....onnection is placed on the following cases:- 1. ACIT & Anr. Vs. Dipesh M Panjwani & Anr. 46 CCH 0322 (Mum.) (Trib.) dt. 18.03.2016. 2. Roshan Lal Tilak Raj & Co. Vs. ITO 46 CCH 0130 (Asr.) (Trib.) dt. 22.01.2016 3. Tristar Intech P. Ltd. Vs. ACIT 43 ITR (Trib.) 0279 (Del.) dt. 07.09.2015 4. CIT vs. M/s Manjunatha Cotton & Ginning Factory & Ors. 359 ITR 565 (Kar.) HC 5. Radha Mohan Maheshwari Vs. DCIT order dt. 18.03.2016 in ITA No.773/JP/13 6. Shankar Lal Khandelwal Vs. DCIT order dt. 11.03.2016 in ITA No. 878/JP/13 On merit 1. It is submitted that assessee under a bonafide belief that the trucks purchased from NBI Finance is new for it claimed the depreciation at the higher rate. However, when the AO took a view that on these trucks higher depreciation is not allowable to the assessee, a revised depreciation chart was filed reducing the claim of depreciation. This was done as ultimately it was not making any effect on the tax liability of the assessee in as much as even after reducing the claim of depreciation, the income of the assessee remained at Nil with a lower carried forward of unabsorbed depreciation but at the same time the WDV of the trucks increa....
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.... building in the textile industry-will continue to benefit from 50% depreciation in the first year. Further, the eligibility criteria for the extra depreciation benefit would be benchmarked on the TUFS norms with regard to the sophistication levels of the machine installed. The special dispensation will be coterminus with TUFS, which has been extended to 2006-07..." claimed higher depreciation. The AO made disallowance on account of excess claim of depreciation which was confirmed by the CIT(A). The AO initiated penalty proceedings u/s 271(1)(c). The Ld. CIT(A) deleted the penalty by holding that the assessee under bonafide belief based on the report in the Financial Express had claimed higher depreciation. There was no concealment involved nor this is a case of filing of inaccurate particulars as everything was disclosed in the deprecation chart attached with the Income-tax Return. This case is covered by the case of CIT Vs. Reliance Petro Product Pvt. Ltd. (2010) 322 ITR 158 and CIT Vs. Brahmputra Consortium Ltd. 348 ITR 0339 (Del.) (HC). In case of CIT Vs. Brahmputra Consortium Ltd., the assessee claimed depreciation at 40% on earth moving equipment which consisted of excavat....
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....led its return of income along with tax audit report. In its tax audit report, it was indicated that provision towards payment of gratuity was not allowable but it failed to add provision for gratuity to its total income. It was held that it was a bona fide and inadvertent error. The same can only be described as a human error which we all are prone to make. The assessee could not be held guilty of either furnishing inaccurate particulars or attempting to conceal its income. Therefore, imposition of penalty was unjustified. 3. The decisions relied by the Ld. CIT(A) in case of Punsumi Engineers Ltd. Vs. CIT (2014) 90 CCH 0262 (Raj.) (HC) is on different facts and situations in as much as in that case it was found that the acquisition of asset itself is not proved and the transaction was held to be a colourable transaction. Similarly the case of CIT Vs. NG Technologies Ltd. (2015) 370 ITR 0007 (Del.) (HC) is on a different footing. Further, the decision relied by CIT(A) in case of MAK Data Pvt. Ltd. (2013) 358 ITR 593 (SC) is not applicable on facts. In that case, the assessee filed its ROI for A.Y. 04-05 on 27.10.2004. During the course of assessment proceedings, the AO noticed t....