TaxTMI 
TaxTMI 
2024 (8) TMI 917
X X X X Extracts X X X X
X X X X Extracts X X X X
...., 1961 (the "Act"), pertaining to the assessment year 2017-18. The Revenue has raised following grounds of appeal: "1. Whether on the facts and in the circumstances of the case the learned CIT(A) has erred in deleting the penalty imposed u/s 270A of Rs. 1,13,76,592/- ignoring the provisions of section 270A are attracted in this case as the assessee has misreported its income by claiming excess depreciation? 2. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing." 2. Facts of the case, in brief, are that for A.Y. 2017-18 the assessee filed its return of income declaring income of Rs. 383,45,50,210/-. The case was selected for scrutiny under CASS. During assessme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ated the submissions as made before the authorities below and submitted that the difference between the assessed income and the returned income was on account of depreciation, where inadvertently the opening written down value (WDV) of the assets was taken at book value in the audited annual accounts prepared under the Companies Act instead of written down value (WDV) under the Income-tax Act by the auditors in their tax audit report u/s 44AB of the Act. Both the accounts and the said report were submitted with the return of income. Consequently, the assessee also claimed the depreciation in the return of income as computed in the tax audit report by the tax auditors. The said error, as soon as it was noticed, was intimated for correction t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as an incorrect figure for opening WDV of block of assets has been adopted for the purpose of computing the admissible depreciation. The mistake is purely an oversight. because both the figures i.e. the closing WDV of block of assets as per the Income Tax Act and the closing WDV of block of assets as per the Companies Act, for the immediately preceding year, were available on record; but the incorrect figure was adopted by mistake by the Tax Auditor, and the same was relied upon by the appellant while filing its return of income. This oversight resulted in an excess claim of depreciation as per the return for an amount of Rs. 1.63 Crore. The appellant company has a declared Turnover to the tune of Rs. 978 Crore and returned income to the tu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... relevant clause of sub-section (9) of section 270A, which is sought to be invoked in this case. AO has only mentioned that the appellant has committed default of misrepresentation and suppression of facts. However, in view of the facts stated above, I am constrained to disagree with the findings of AO in this regard. The excess claim of depreciation, which is the subject matter of addition, was a result of oversight in adopting an incorrect figure for the opening WDV for block of assets. It has already been brought out in preceding paragraphs that both the figures of opening WDV for block of assets, i.e. as per the Companies Act and as per the Income Tax Act, were clearly available on record (in audited financial statements, the tax audit ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... application under section 270AA was rejected in a wholly cursory manner indicating that case of assessee was within ambit of clause (a) and (c) of section 270A(9) and without giving any cogent reasons, same could not be sustained. 6.5 Hon'ble ITAT, Mumbai Bench in the case of Alrameez Construction (P.) Ltd. Vs NFAC (2023) (152 taxmann.com 382) (Mumbai Trib.) has held that where Assessing Officer made addition under section 43CA read with section 56(2)(x), case of assessee did not fall in category of under reporting of income and moreover since in penalty notice under section 270A revenue had failed to specify limb "under-reporting" or "misreporting" of income, under which penalty proceedings had been initiated, entire proceedi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....income is not sustained. The Jurisdictional Assessing Officer (JAO) is directed to delete the penalty of Rs. 1,13,76,592/- levied on this account." 6. The assessee's stand in the case in hand is that the difference between the assessed income and the returned income was on account of depreciation, where inadvertently the opening written down value (WDV) of the assets was taken at book value in the audited annual accounts prepared under the Companies Act instead of written down value (WDV) under the Income-tax Act by the auditors in their tax audit report u/s 44AB of the Act. Both the accounts and the said report were submitted with the return of income. The learned First Appellate Authority in the impugned order has discussed the issue e....