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Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI SANJAY GARG & DR. B.R.R. KUMAR
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against
the order dated 01.06.2017 of the Commissioner of Income Tax
[hereinafter referred to as CIT(A)]-2, Ludhiana agitating the levy of
penalty u/s 271(1)(c) of the Act.
The brief facts relating to the issue are that the assessee
claimed additional depreciation on plant and machinery. However,
the Assessing officer found that the assessee was not entitled to the
same. He, therefore, disallowed the claim of additional depreciation
amounting to Rs. 6,01,030/-. The Assessing officer also initiated
ITA No.1230/Chd/2017- M/s Aabas Spinners Pvt Ltd., Ludhiana 2
penalty proceedings u/s 271(1)(c) of the Income-tax Act, 1961 (in
short 'the Act') and imposed penalty of Rs. 2,02,307/- on the
assessee.
Being aggrieved by the above order of the Assessing officer,
the assessee came in appeal before CIT(A) but remained
unsuccessful.
The assessee has now come in appeal before us. Though the
arguments were heard in the appeal on 29.11.2017, however, certain
clarifications were needed. Hence, this case was fixed for today.
We have considered the rival submissions and have also gone
through the records. The contention of the assessee is that claim of
additional depreciation made by the assessee was under bonafide
belief and there was no intention on the part of the assessee to evade
tax. That assessee company had already incurred huge losses of Rs.
77,93,682/-, and even despite the aforesaid addition, the assessee
would not have been liable to pay any tax. That the claim of
additional depreciation on old plant and machinery was out of an
inadvertent error. That the mistake regarding claim of additional
depreciation was admitted by the assessee before assessing officer
during assessment proceedings itself and even the assessee did not
prefer any appeal against the order of the Assessing officer.
The Ld. DR, on the other hand, has relied on the findings of the
lower authorities and has stressed that the assessee had wrongly
ITA No.1230/Chd/2017- M/s Aabas Spinners Pvt Ltd., Ludhiana 3
claimed the additional depreciation which was not allowable; hence, the penalty has been rightly levied by the lower authorities.
We have considered the rival submissions. We find that the assessee has given a bonafide explanation that the claim of additional depreciation was not out of any malafide intention to evade tax. That it was an inadvertent error. The assessee further explained that it was running in huge losses and there was no reason for the assessee to wrongly claim the additional depreciation as due to huge losses even after disallowance of the additional depreciation, there was no tax liability on the assessee for the year under consideration.
Considering the above submissions of the assessee, we do not find it a fit case for levy of penalty u/s 271(1)(c) of the Act. In view of this, the penalty levied by the lower authorities is ordered to be deleted. The appeal of the assessee stands allowed. Order pronounced in the Open Court.
Sd/- Sd/- (B.R.R.KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 06.04.2018 Rkk Copy to: • The Appellant • The Respondent • The CIT • The CIT(A) • The DR