TaxTMI 
TaxTMI 
2022 (8) TMI 1277
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.... on the sale and lease back transactions relating to windmills electric generators, where the assessee itself was not the owner of lands on which the generators had been installed and hence could not be treated as owner of the windmills? 2. Whether on the facts and in the circumstances of the case the Income-Tax Appellate Tribunal was right in not holding that the penalty had been rightly levied since the assessee had made a false claim of depreciation on wind electric generators when the assessee was not recognized as the owner by the Electricity Boards?" TCA No. 441 of 2011: "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in cancelling the penalty of Rs.7,60,00,000/- levied under Explanation 1 to section 271(1)(c) of the Income Tax Act 1961, even though it had been established that the assessee had claimed depreciation on the assets which were not owned by it, but which were already owned by M/s.Indo Wind Energy Ltd., on the basis of invoices for purchase which were not genuine?" 3. Briefly stated facts are as follows:- For the Assessment Year 1999-2000, the respondent-assessee bank filed their ....
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.... scheme of amalgamation under Section 44A of Banking Regulation Act, approved by the Reserve Bank of India. For the assessment year 2001-2002, the assessee filed their return of income on 29.10.2011 declaring a loss of Rs.27,12,68,138/- and the return was processed under Section 143 (1) of the Act on 29.11.2002. Subsequently, the case was selected for scrutiny and the assessment was completed under Section 143 (3) of the Act on 31.03.2004 determining the total income of the assessee at Rs.34,33,06,188/-. During the course of the said assessment, depreciation claimed by the assessee on wind mills amounting to Rs.7,60,00,000/- was disallowed. As the assessee filed inaccurate particulars of their income, notice under Section 274 of the Act was issued proposing to initiate penal action under Section 271 (1) (c) of the Act. Aggrieved by the same, the appellant filed appeal before the Appellate Authority and it was disposed of on 15.10.2004 confirming the disallowance of depreciation. However, a direction was issued to the Assessing Officer to complete the penalty proceedings after providing opportunity to the assessee. Accordingly, an opportunity was given to the assessee and they filed....
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....g Officer. However, the appeals filed by the assessee before the Commissioner of Income Tax (Appeals), came to be allowed by deleting the penalty, with the following observations: I.T.A. No. 185/06-07/A.III "I have considered the facts of the case and the submissions of the ld. AR. I have also gone through the order of Hon'ble ITAT, find that AO has levied penalty only in respect of disallowance of 50% of depreciation on windmills and 100% depreciation on windmills leased to Milton Plastics Ltd. The Hon'ble Tribunal vide para 47 of its order dated 06.06.2008 has allowed the claim of depreciation on windmills. Therefore, I delete the penalty levied by the AO on these transactions." I.T.A. No. 186/06-07/A.III "I have considered the facts of the case and the submissions. I have also gone through the order of the Hon'ble ITAT. I find that AO has levied penalty only in respect of disallowance of depreciation on windmills leased to M/s.Indowind Energy Limited. The Hon'ble ITAT vide para 40 of its order dated 06.06.2008 has allowed the claim of depreciation on windmills. Therefore, I delete the penalty levied by the Assessing Officer on ....
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.... the assessment reopened under s.147 of the IT Act, 1961, the Tribunal deleted the addition on account of deemed dividend under section 12(1B) read with section 2(6A)(e) of the Indian Income-tax Act, 1922, the deemed dividend which had been deleted could not form the subject-matter of imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961, because, the basis for imposition of penalty had ceased to exist. Therefore, the Tribunal was correct in cancelling the penalty imposed on account of the addition." 5. CIT vs. Bedi and Co. (P) Ltd. (1990) 183 ITR 59 (Kar) "Held, that, in view of the conclusion reached by the High Court that the amount in question was not assessable, there was no basis for the imposition of penalty. The cancellation of penalty was valid. [The Supreme Court has dismissed the special leave petition filed by the Department against this judgment of the High Court in relation to penalty under section 271(1)(c) arising out of an assessment, wherein the addition of a loan has been cancelled by the High Court as reported in Bedi & Co. (P) Ltd. Vs. CIT (1983) 144 ITR 352 (Kar) : See (1990) 181 ITR (St) 19-Ed.] 6. CIT v....