TaxTMI 
TaxTMI 
2022 (2) TMI 702
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....in turn arises from order of penalty levied by assessing officer (A.O.)/Income Tax Officer, Ward-2(1)(2) Surat, under section 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act') dated 20.03.2018 for assessment year (AY) 2015-16. The assessee has raised the following grounds of appeal:- 1 The Ld Faceless CIT(A) has erred and was not just and proper on the facts of the case and in law in confirming the penalty u/s 271(1)(c) of the Act Rs. 7,55,913/- 2 The penalty of Rs. 7,55,913/- may be kindly deleted Any other relief that your honours may deem fit maybe granted Nil 3 The assessee craves leave to add, amend, modify alte....
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.... on rent alongwith building but somehow it does not find place in the rent agreement. The assessee also stated that after insertion of block system, the assets got subsumed in specific block and even if single machine is ready to put to use for the purpose of business, depreciation is allowable. The reply of assessee was not accepted by Assessing Officer by taking view that assessee is not carrying out any business activities. Therefore the claim of depreciation is not allowable. The Assessing Officer disallowed the depreciation and initiated penalty under section 271(1)(c) while passing the assessment order on 29.09.2017. Subsequently, the assessment order was rectified under section 154 vide order dated 17,11,2017 and business income offe....
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....nt and machineries were let out on rent and that depreciation is allowable. The machineries were installed in the process house property and these were not removed from the premises. The plant & machinery were sold in financial year 2017-18 relevant to AY 2018-19 and Short Term Capital Gain/Loss was offered to tax in the relevant assessment years. Which also establishes the bona fide claim of assessee. The Assessing Officer disagreed with the submission and disallowed the depreciation and treated the rental income as income from "house property" instead of 'business income'. The Assessing Officer rectified his order under section 154 of the Act and allowed the deduction @ 30% which was not allowed at the time of disallowance of depreciation....
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....cturing business and gave the land & building to various parties on rental basis and claimed depreciation which constitutes "furnishing of inaccurate particulars of income" and upheld the action of Assessing Officer. Further aggrieved assessee has filed present appeal before this Tribunal. 5. We have heard the submission of Ld. Authorized Representative (AR) for the assessee and Ld. Sr. Departmental Representative (Sr.DR) for the Revenue and have gone through the orders of authorities below. The Ld. AR of the assessee submits that the assessee was in a manufacturing business and suffered huge losses in its business and in order to curtail heavy loss and to protect the plant & machinery from deteriorating, the assessee let out the land & ....
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....to the fact that assessee has not done any business during the year. To support his submission, Ld. AR of the assessee relied upon various case laws of Hon'ble Apex Court and Hon'ble High Courts; • CIT Vs. Reliance Petroproducts (P) Ltd. [2010] 189 Taxman 322/ [2010] 322 ITR 158 (SC) • PCIT Vs. Financial Technologies India Ltd. [2020] 113 taxmann.com 152 (SC) • CIT Vs. Royale Manor Hotels & Ind. Ltd. [2014] 41 taxmann.com 491 (Guj) • PCIT Vs. Himalayan Expressway Ltd. [2019] 109 taxmann.com 262 (P&H) • PCIT Vs. Financial Technologies Ltd. [2019] 112 taxmann.com 398 (Bom) 6. On the other hand, Ld. SR-DR for the Revenue supported the order of authorities below. He sub....
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.... in the least out deed. 8. We find that the Assessing Officer disallowed the depreciation on the basis of contents of lease deed. And admittedly no verification of fact about the claim of assessee that plant & machinery is installed in the let out premises or the plant & machinery was not ready to use. We further find that before the Ld. NFAC/CIT(A), the assessee specifically contended that such machines which was a part of block assets or were sold during the AY 2018-19 and Short Term Capital Gains/Loss thereon offered for taxation. The Ld. NFAC/CIT(A) has not given any finding on such facts. The Ld. NFAC/CIT(A) confirmed the order of Assessing Officer by referring the decision of Sundaram Finance Ltd. (supra) with utmost regard to the ....