TaxTMI 
TaxTMI 
2023 (12) TMI 1125
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....sed u/s. 250 of the Income Tax Act, 1961 ('the Act'), pertaining to the Assessment Year ('A.Y.' for short) 2017-18. The assessee has filed a cross objection challenging the order of the ld. CIT(A). 2. The Revenue has challenged the order of the ld. CIT(A) directing the ld. Assessing Officer ('A.O.' for short) to delete the penalty levied u/s. 270A of the Act by holding that the excess claim of depreciation to be a bona fide mistake on the part of the assessee without considering the fact that the assessee has disclosed the claim of excess depreciation only during the scrutiny proceeding along with the other corresponding grounds. The assessee has challenged on the ground that the notice issued by the ld. A.O. was without spec....
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....precation during the assessment proceeding after duly reducing the claim of insurance from the block of assets where the reduced claim of depreciation was worked out at Rs. 3,17,94,645/-. The ld. A.O. disallowed the excess claim of depreciation on fixed assets amounting to Rs. 3,17,94,645/- and determined the total income at Rs. (- )1252,37,71,789/- and book profit u/s. 115JB at Rs. (-)95,37,05,064/- and added the same to the total income of the assessee. The ld. A.O. also initiated penalty proceedings u/s. 270A of the Act for under reporting of income. The ld. A.O. then passed the penalty order dated 10.01.2022 u/s. 270A of the Act determining the penalty amount to be Rs. 52,56,132/- being 50% of the amount of tax on the under reported inc....
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....ve ('ld. AR' for short) for the assessee contended that the assessee's action on non reduction of insurance claim from the block of assets was not malafide and it was a bona fide mistake committed by the assessee while filing the return of income. The ld. AR further contended that the assessee had in its return of income declared loss and that the excess claim of depreciation was in no way beneficial to the assessee and was merely in an inadvertent error. The ld. AR further contended that the assessee was in advantageous position only when it had claimed deprecation @ 25% in the relevant year which would result into higher written down value in the next year while claiming depreciation of a higher amount on higher written down value....
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....at it had inadvertently not reduced the amount of insurance claim received by the assessee from the block of assets thereby claiming more depreciation on fixed assets. The assessee company then submitted a revised working of depreciation with computation of income after duly reducing the claim of insurance received from the block of assets. The ld. A.O. levied penalty u/s. 270A(7) of the Act for the reason that the assessee has under reported its income. The provision of section 270A(2) of the Act is extracted hereunder for ease of reference: Penalty for under-reporting and misreporting of income. 270A. (2) A person shall be considered to have under-reported his income, if- (a) the income assessed is greater than ....
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....he assessee's contention that it was a bona fide mistake was not considered by the ld. A.O. The first appellate authority, on the other hand, held the same to be a bona fide mistake and deleted the impugned penalty by relying on various decisions cited by the assessee. 11. The moot question here is whether the ld. A.O. was right in levying penalty u/s. 270A of the Act resulting in invoking of section 270A of the Act. The assessee in the present case has stated that it was not in an advantageous position to claim higher depreciation as it was adverse for the assessee in subsequent years and that there was no question of reducing the tax liability where the assessee's return of income declared a huge loss during the year under consideratio....