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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
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.
Anita Kumaran (2017) 148 DTR 281, the Ld.counsel submitted that on identical situation, the assessee before the High Court claimed travelling and other expenses for earning income from other sources. This Tribunal by placing reliance on the judgment of Apex Court in CIT v. Reliance Petroproducts Pvt. Ltd. (322 ITR 158), found that when the assessee furnished all the details of claim for deduction, merely because the same was not allowed by the Assessing Officer that would not amount to furnishing of inaccurate particulars of income. Accordingly, according to the Ld. counsel, this Tribunal deleted the penalty and the order of this Tribunal was confirmed by the High Court.
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.
Whether the assessee is entitled for such depreciation or not is for the decision of the Assessing Officer. Mere making claim as per the understanding of law by the assessee cannot be construed as furnishing of inaccurate particulars of any part of income of the assessee. Therefore, this Tribunal is of the considered opinion that it is not a fit case for levy of penalty under Section 271(1)(c) of the Act. A similar view was taken by the Madras High Court in Anita Kumaran (supra). In view of the above, we are unable to uphold the order of the lower authority. Accordingly, the orders of both the authorities below are set aside and the penalty levied by the Assessing Officer is deleted.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 6th September, 2017 at Chennai.