Case Law Details
M. Prabaharan Vs ITO (ITAT Chennai)
Before us, the Chartered Accountant Shri Jeevarathinam categorically admitted in writing that the duplication of assets has happened while calculating the depreciation as per Income Tax Act while computing the tax computation sheet by his staff. He admitted that while doing so, the staff has wrongly computed the deprecation value filed 15% block of assets with respect to the said assessment year and accordingly, excess depreciation claimed was made to the extent of Rs. 17,86,187/-. The Chartered Accountant vide letter filed during the course of hearing and admitted this mistake as under:
“Here we admit that the mistake above was done by one of my staff and the same was totally not aware of by the company as the same was not related to the book of accounts of the company as it alters only the statement of accounts and the annexure in the Income tax Depreciation statement. Indeed the companies itself are very much ignorant about all the tax rules and laws.
Hence I kindly request your honor to consider the true factual grounds that the company has no intention to evade tax or to provide any false statement to suppress any profits with any malafide intentions.”
We noted that this mistake has occurred at the office of the Chartered Accountant and there is no intention of the assessee to evade the tax. Moreover, the assessee has already accepted assessment and paid taxes. In view of the facts and circumstances narrated above and the cumulative effect of the facts, if we analyze, it clearly shows that the assessee was under bonafide belief in claiming this depreciation. Hence, we delete the penalty and allow the appeal of the assessee.
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