2016 (12) TMI 1809

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....The assessee filed return of income for the A.Y. 2010-11, declaring loss of Rs. 43,52,78,405/-. The assessment was completed u/s 143(3) on 8-2-2013 determining the total loss of Rs. 38,31,47,099/- by disallowing excess depreciation claimed on water treatment plant and its equipments. 3. Thereafter, the A.O. initiated penalty proceedings u/s 271(1)(c) of the Act, and asked to explain as to why penalty shall not be levied for furnishing inaccurate particulars by claiming 100% depreciation on water treatment plant and equipments. The A.O. observed that the assessee has claimed 100% depreciation on water supply and distribution equipments and water treatment plant, whereas it is eligible for normal rate of 15% depreciation applicable to gener....

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....ssee levied penalty u/s 271(1)(c) of the Act, by holding that the assessee has furnished inaccurate particulars of income by claiming 100% depreciation on water treatment plant and equipment, even though it is not eligible for such claim. The A.O. further held that the assessee fails to make out a case that its claim is a bonafied mistake as it was advised by expert tax consultants and also the law is very clear in as much 100% depreciation is eligible for those assessee which claims deduction u/s 80IA(4)(i), whereas the assessee had claimed deduction u/s 80IAB. The A.O. further held that penalty is a civil liability and willful concealment or an attempt to evade tax is not a pre-requisite for attracting penalty. Evan wrong claim or excess ....

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....addition of Rs. 5,21,31,306/- to the returned loss and as a result the total loss returned is reduced. The A.O. observed that the assessee has furnished inaccurate particulars of income which attracts penalty u/s 271(1)(c ) of the Act. The A.O. after relied upon certain judicial precedents, has given his own reasons for coming to the conclusion that the assessee has furnished inaccurate particulars of its income. It is the contention of assessee that its claim is bonafied and it has disclosed all material facts in the return of income. The assessee further contended that there is no ulterior motive behind excess claim of depreciation and its claim is supported by sound legal contention and also it was advised by expert tax consultants who c....

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....(i) of the Act. The explanation provided to section explained infrastructure facility to include a water supply project, water treatment system etc. Whether the assessee is developing exclusive infrastructure facility of water treatment plants is eligible for 100% depreciation or providing in house water supply project or water treatment plant in a integrated infrastructure facility being Textile park in Special Economic Zone is a debatable issue which involves two possible views. The assessee had taken one of the possible view which was supported by sound legal contention and also certified by the tax auditor cannot be considered as furnishing of inaccurate particulars of income within the meaning explanation 1 to sec. 271(1)(c) of the Act....