Case Law Details
Agarwal Packers & Movers Ltd Vs DCIT (ITAT Delhi)
Merely because if a claim is rejected by Assessing Officer, would not ipso facto made the assessee liable for penalty
Now, coming to the penalty confirmed in respect of addition sustained on account of disallowance of claim of depreciation. One of the averments of the assessee before the authorities below was that under the identical facts, the Ld.CIT(A) allowed the claim of depreciation in succeeding year. This fact is not rebutted by the Revenue. It was further contended that the assessee had disclosed and furnished true and correct particulars of its income at the time of filing of return. The assessee had not acted in defiance of law and did not act on conscious in this regard to the law. In this regard, reliance was placed on the judgement of the Hon’ble Supreme Court in the case of CIT vs Reliance Petroproducts (P.) Ltd. (supra).
We find merit into the contention of the assessee merely because if a claim is rejected by the Assessing Officer, would not ipso facto made the assessee liable for penalty. In the present case the Ld.CIT(A) himself allowed the claim of depreciation under the identical facts in the succeeding year. The Revenue has not pointed out any change into the facts and circumstances of the case in the year under appeal. Therefore, in the light of the judgement of Hon’ble Supreme Court in the case of CIT vs Reliance Petroproducts (P.) Ltd. (supra), the levy of penalty was not justified. We therefore, hereby direct the Assessing Officer to delete the penalty. Hence, the assessee succeeds on merit.
Where the limb of the section is not struck off in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act, then the levy of penalty u/s 271(1)(c) of Income Tax Act suffers from infirmity
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