TaxTMI 
TaxTMI 
2022 (4) TMI 1380
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.... of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Officer to the extent mentioned above since the assessee has failed to disclose his true income/book profit. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored to the above extent. The appellant craves, to leave, to amend or alter any ground or add a new ground which may be necessary." 3. The brief facts of the case are that during the course of assessment proceeding for the captioned year, the ld. Assessing Officer made the following additions during quantum assessment proceedings:- Transfer Pricing Addition 2,70,80,409 Depreciation disallowed 2,66,83,892 Disallowance of deduction u/s 80SA 8,26,43,706 During the course of penalty proceedings in relation to the above additions, the ld. Assessing Officer upheld the penalty in respect of the above additions made during quantum proceedings. In respect of claim of depreciation of 37,45,93,719/-, the ld. Assessing Officer noted that in the assessment for A.Y. 2001-02, the Assessing Officer thrust upon the assessee depre....
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....fact and adopted all appropriate method for working of Arm's length price (ALP). The TPO without rejection of such method, adopted another method for the adjustment. It is therefore, such additions cannot be termed as furnishing of inaccurate particulars of income or concealment since based on different opinion of TPO and in the nature of deeming provisions. The appellant relied on Hon'ble ITAT Ahmedabad order in the case of Mastek Ltd. (supra). Hon'ble ITAT in this case held that - "8. We have heard the rival submissions and perused the material on record. It is seen that the A.O. has levied penalty on the adjustments made by the TPO with respect to international transactions. It is an undisputed fact that the international transactions were reported by assessee in Form 3CEB.Transfer Pricing adjustments have been made only in relation to certain activities stated by Transfer Pricing Officer to be of international transactions. The penalty under sec. 271(l)(c) of the Act is leviable if the A.O. is satisfied in the course of any proceedings under the Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such incom....
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....d that as held by Hon'ble ITAT, in the case of appellant necessary ingredient of drawing satisfaction of furnishing of inaccurate particulars of income are absent. Further appellant followed proper procedure and submitted all the details in respect of international transaction with an approved method of valuation of ALP. It is therefore, the satisfaction so drawn by A.O. and penalty so imposed is neither justified nor sustainable^ (ii) In reference to penalty imposed on disallowance of depreciation of Rs. 2,66,83,893/-, the appellant claimed depreciation under the bonafide tax audit report on the fact that appellant didn't claimed-depreciation in A.Y. 01-02 thrusted by A.O. in the asstt. order for A.Y. 01-02, hence there is difference of WDV and claim. Apart from various explanation and facts against penalty imposition, appellant relied on the order of Hon'ble ITAT Ahmedabad in its own case for A.Y. 02-03 & A.Y. 04-05 where penalty on this issue was deleted. I am inclined with appellant that on same issue and similar facts, Hon'ble ITAT Ahmedabad. In appellant's case for A.Y. 04-05 vide order dt. 19/01/2012 in ITA No. 3455/Ahd/2010 & C.O. No. 71 And/201....
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....9;ble Ahmedabad ITAT in quantum appeal in relation to Transfer Pricing additions for captioned year i.e. AY 2005-06 in assessee's own case in ITA No. 1681/Ahd/2011 has restored the matter back to the file of Ld. Assessing Officer for fresh adjudication. Accordingly, the penalty issue may also be restored to file of Ld. Assessing Officer. The Ld. Counsel for the assessee drew our attention to Para 7 of the aforesaid order. Now, so far as penalty on excess claim for depreciation is concerned, Ld. Counsel for the assessee submitted that on same issue and similar facts, Hon'ble ITAT Ahmedabad in appellant's case for A.Y. 03-04 vide order dt. 26-02- 2015 in ITA No. 2970/Ahd/2010 &in ITA No. 3188/Ahd/2010 for AY 2004-05 vide order dt. 19/01/2012 deleted the penalty imposed on the issue of excess claim of depreciation. Accordingly, he submitted that penalty in respect of excess claim of depreciation may kindly be deleted. On the issue of imposition of penalty in respect of claim u/s 80-IA of the Act, Ld. Counsel for the assessee submitted that Hon'ble ITAT in assessee's own case in ITA No. 2970/A/2010 for AY 2003-04 and in ITA No. 3188/A/2010 for AY 2004-05 has deleted....
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.... the CIT(A) has deleted the penalty on the premise that this disallowance of depreciation is basically for the reason that after allowing depreciation in assessment year 2001-02, the WDV has reduced and accordingly the claim of the assessee for this year was reduced. The finding of the CIT(A) are that the earlier years claim of the assessee was that no depreciation was allowed actually on the basis of a legal decision hence the issue in that year was debatable. In view of this finding of the CIT(A), we find no infirmity in the same and accordingly we uphold the same. This issue of the Revenue's appeal is dismissed." 5.1. The similar issue was also before the Tribunal (ITAT "D" Bench Ahmedabad) in assessee's own case in ITA No.3188/Ahd/2010 for AY 2004-05 & CO No.07/Ahd/2011, order dated 19/01/2012, and the Coordinate Bench following the earlier decision in ITA No.951/Ahd/2008 for AY 2002-03 deleted the penalty by observing as under:- (extracted from ITA No.3455/Ahd/2010 & CO No.07/Ahd/2011) "7. We have considered the rival submissions and have perused the order of the Tribunal for the earlier assessment year 2002- 03 in assessee's own case. WE find that i....
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....essee in this new industrial undertaking is less than 20% of the overall expenditure of the new machinery and on that the new machinery and (ii) that the new turbine is by itself a new industrial undertaking and the steam which was taken from the boiler would have been either purchased from outside agency as a fuel or like it has been done it would take the same from the in-house boiler and used it as fuel. There was no question of this being considered as a part of the turbine as a new Industrial Undertaking for the purposes of granting deduction under section 80IA. In view of the above explanation the assessee has stated in his explanation that very same Assessing Officer had scrutinized the return for assessment year 2001-02 and had made disallowance of the assessee's claim and hence was aware about the legal stand of the assessee. The assessee is merely canvassing the same stand in the subsequent assessment year i.e. Assessment year 2002-03 and hence there is no question of any concealment or filing of inaccurate particulars in the return of income. The assessee also put the certificate of the chartered Accountant as required u/s. 80IA(7) of the Act which also clearly demonstra....