TaxTMI 
TaxTMI 
2023 (9) TMI 1316
X X X X Extracts X X X X
X X X X Extracts X X X X
....ferred to as 'the Act') relating to the Assessment Year (A.Y) 2011- 12. 2. The solitary ground raised by the Revenue is that the Ld. CIT(A) erred in law in deleting the levy of penalty of Rs. 2,27,86,676/- u/s. 271(1)(c) of the Act. 3. The brief facts of the case is that the assessee is mainly engaged in development, operation and maintenance of Ports & Economic Zone at Mundra, Gujarat. For the Assessment Year 2011-12, the assessee filed its Return of Income declaring total income of Rs. 30,81,75,558/-. Regular scrutiny assessment was completed u/s. 143(3) of the Act on 01-03-2014 determining the total income as Rs. 1,41,39,57,721/- after making various additions/disallowances The A.O. initiated penalty proceedings u/s. 271(1)(c) of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ii) disallowance of depreciation on Right to use leasehold land. So far as the levy of penalty u/s 271(1)(c) of the Act on both of the above disallowances is concerned, it is observed that claim of the Appellant was very much apparent in Computation of its income and in Clause No. 14(a) to 14(f) of Tax Audit Report. As such claim was certified by Tax Auditor it proves beyond doubt that claim of appellant is bonafide. Further, all the facts were disclosed on the face of Computation of income and Tax Audit Report thus: merely disallowance has been confirmed does not invite levy of penalty on ground of furnishing inaccurate particulars. It is observed that Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt Ltd v/s CIT 348 IT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....will in turn lead to increase in eligible profit u/s 80IAB of the Act. Such fact was accepted by the AO himself while passing the Assessment Order for AY 2013-14 following Circular No. 37/2016 issued by CBDT on 02.11.2016. Further Hon'ble Jurisdictional High court in case of ITO vs. Keval Construction (33 taxmann.com 277) have also held the issue in favour of appellant company. These facts support the contention of appellant that even if disallowance is sustained, it will be entitled to deduction u/s 80IAB meaning thereby it will not have any tax effect hence by claiming such expenditure in return of income, appellant has not made any malafaide claim which triggers levy of penalty u/s 271(1)(c) of the Act. 3.8 Considering the f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isation is not available, the eligible profit for computation of deduction under Section 80IAB should increase. 15. The Ld. DR submitted that the principle of depreciation of value/amortisation expenses does not apply to land. 16. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the amortisation expenses are not available to the assessee as it was part of lease rent payment and, therefore, the plea of the assessee that eligible profit for computation of deduction under Section 80IAB should increase is acceptable. Hence, ground nos.6 and ground no.6.1 are allowed. ......................... 11. As regards Ground nos. 5 & 5.1 of the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... should have been taken into account by the Assessing Officer as well as CIT(A). Thus, ground no.5 and ground no.5.1 are allowed." 6. Thus Ld. Counsel submitted that even on merits, the additions made by the Assessing officer were deleted in the quantum appeal. Hence, there is no question of levying penalty in the above cases for furnishing inaccurate particulars of income. The Ld. CIT(A) followed the Judgment of the Hon'ble Supreme Court in the case of Reliance Petro Products and Jurisdictional High Court Judgment thereby deleted the levy of penalty. Therefore the findings reached by the Ld. CIT(A) does not require any interference and the Revenue appeal is liable to be dismissed. 7. Per contra, the Ld. CIT-DR Shri Akhilendra Pratap ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntention of the revenue then in case of every Return where the claim made is not accepted by Assessing Officer for any reason, the assessee will invite penalty under section 271(1)(c). That is clearly not the intendment of the Legislature. 11. In this behalf the observations of this Court made in Sree Krishna Electricals v. State of Tamil Nadu[2009] 23 VST 249 as regards the penalty are apposite. In the aforementioned decision which pertained to the penalty proceedings in Tamil Nadu General Sales Tax Act, the Court had found that the authorities below had found that there were some incorrect statements made in the Return. However, the said transactions were reflected in the accounts of the assessee. This Court, therefore, observed:....