RADHA EXPORTS (INDIA) P. LTD.,CHENNAI vs. DCIT, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -3, Chennai, dated 22.03.2016 confirming the penalty levied by the Assessing Officer under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act').

Shri S. Sridhar, the Ld.counsel for the assessee, submitted that during the course of assessment proceeding, the assessee claimed depreciation to the extent of `19,62,632/-. According to the Ld. counsel, what was purchased by the assessee is only evacuator. The purchase of evacuator is not in dispute. The Assessing Officer found that the evacuator was not put to use before 31.03.2005. Therefore, he disallowed the claim of the assessee. According to the Ld. counsel, evacuator does not require any special installation, therefore, the moment it was purchased, it was ready for use. Hence, according to the Ld. counsel, the Assessing Officer is not justified in disallowing the claim of the assessee.

The Ld.counsel for the assessee further submitted that when the assessee claimed depreciation as per its understanding of the Income-tax Act, merely because the Assessing Officer disallowed the claim of the assessee that would not be considered as concealment of income or furnishing of inaccurate particulars of income. Referring to the judgment of Madras High Court in CIT v.

On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that the assessee claimed depreciation on the evacuator which was not put to use during the year under deduction. Therefore, the Assessing Officer has rightly levied penalty under Section 271(1)(c) of the Act and it was rightly confirmed by the CIT(Appeals).

We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the assessee claimed depreciation on evacuator. As rightly submitted by the Ld.counsel for the assessee, the purchase of evacuator by the assessee was not in dispute. What is disputed is whether the assessee put to use the evacuator before 31.03.2005. The question arises for consideration is when the assessee has furnished the details of purchase of the machinery and claimed depreciation during the course of assessment proceeding, whether that would amount to furnishing of inaccurate particulars or concealment of any income? The Apex Court in Reliance Petroproducts Pvt. Ltd. (supra) had an occasion to examine the same. The Apex Court found that when the assessee has furnished all the details and claimed the expenditure, it does not amount to furnishing of inaccurate particulars or concealment of any part of income. In this case also, the assessee has furnished all the particulars of its income, therefore, it is not a case of concealment of income of the assessee.

Moreover, the assessee purchased the evacuator and claimed depreciation as provided in the statutory provisions. Depreciation is a statutory claim as provided in Income-tax Act.

In the result, the appeal filed by the assessee is allowed.