Case Law Details
Prafful Industries (P) Ltd Vs DCIT (ITAT Delhi)
It is not in dispute that the assessee has declared the total value of fixed assets (Plants & Machinery) in its books of accounts. It is also not in dispute that the capital subsidy received by the assessee under TUFF scheme of Gujrat Government was also declared by the assessee before the AO in the assessment proceedings. The only lapse on the part of the assessee unearthed by the AO in the assessment proceedings was that instead of deducting the cost of fixed assets by the amount of capital subsidy received from the Govt., the assessee had shown it as part of reserves in the balance sheet and for this lapse, the AO had already disallowed the excess depreciation claimed. These facts, however, nowhere go to suggest that the assessee had furnished the inaccurate particulars to attract penalty u/s. 271(1)(c) of the Act. Had the assessee not declared the capital subsidy received and claimed the depreciation on full value of capital assets, the matter would have been different. However, once all the information were given in the return of income accompanied by relevant books maintained by assessee, in our considered opinion, simple disallowance of depreciation will not amount to furnishing of inaccurate particulars, as held by Hon’ble Punjab & Haryana High court in the case of CIT vs. Ajaib Singh & Co., 253 ITR 630 and other several decisions relied by the assessee before us including CIT vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158 (SC). In view of this, we are not inclined to sustain the order of the ld. CIT(A). As a result, the appeal of the assessee is found to have merit and deserves to be allowed.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This is an appeal filed by the assessee against the penalty order by the CIT(A) – 7, New Delhi order dated 26.05.2016 for the assessment year 2009-10 on the following grounds of appeal :-
“1. The action of the learned CIT(A) in upholding the penalty levied by DCIT Circle 14(1) of Rs. 2,22,240/- u/s 271(1)(c) is unjust, illegal, arbitrary, illusory and against the facts of the case and thus deserves to be deleted.
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