2021 (3) TMI 105

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.... Act'). The grounds raised in the appeal are reproduced as under: 1. Whether on the facts and circumstances of case, the ld. CIT(A) is correct in deleting the penalty on disallowance of depreciation on computers and the disallowance of expenses of Rs. 42,29,574/- ignoring the fact that no business activity was carried out during the year under consideration. 2. Whether on the facts and circumstances of case, the ld. CIT(A) is correct in deleting the penalty on disallowance of depreciation on computer which is not allowable as per provision of section 342 of I.T. Act, 1961, that tantamount to filing of inaccurate particulars of income. 3. The appellant craves leave, to add, alter or amend any ground of appeal raise....

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....ssee in disclosing fully and truly all the material facts and issue involved was a debatable issue. 3. Before us, none appeared on behalf of the assessee. We have heard submission of the learned DR, who appeared through Video Conferencing facility. The learned DR relied on the order of the Assessing Officer. 4. We have heard the submission of the Learned DR and perused the relevant material on record, including orders of the lower authorities. We find that Learned Assessing Officer has levied the penalty invoking Explanation 1 below section 271(1)(c) of the Act. The Assessing Officer has held that contentions of the assessee are not bonafide. The Ld. CIT(A), however, has deleted the penalty observing as under: "4. The only is....

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....llowed by the AO. Out of travelling and conveyance expenses an amount of Rs. 4.26 lakhs has been disallowed. Out of lease rent expenses, an amount of Rs. 4.47 lakhs has been disallowed. Out of rent expenses an amount of Rs. 2.19 lakhs has been disallowed. Other expenses of smaller amounts have also been disallowed. At the assessment stage, the appellant had also relied on two decisions of Hon'ble Delhi High Court in the case of Bharat Aluminum Company Limited and Integrated Technologies Limited for claiming depreciation. The expenses were claimed for running day to day affairs of the company. 5. During the present appellate proceedings, the appellant relied on the decision of the Apex Court in the case of Reliance Petro Products Li....