Case Law Details
Gulshan International Pvt. Ltd. Vs ACIT (ITAT Delhi)
The other issue relates to imposition of penalty on disallowance of claim of depreciation on Motorcyle on the ground that the Motorcycle is registered in the name of the Director. It is the case of the assessee that although the vehicle was registered in the name of the Director, the payment towards purchase was incurred by the assessee company, and therefore, beneficial ownership continues to remain with the company. It was further pointed out that perquisite to the extent of Rs.21,600/- under the provisions of Section 17(2) of the Act has also been added to the remuneration of the Director on account of element of personal use. In this backdrop, we find wholesome merit in the plea of the assessee that mere disallowance of depreciation in question would not lead to imposition of onerous penalty under Section 271(1)(c) of the Act, more particularly where the quantum disallowance of depreciation itself is highly debatable in view of the undisputed facts of beneficial ownership by the assessee-company. The order of the CIT(A) confirming penalty on this score is accordingly set aside and the penalty imposed by the Assessing Officer on this score stands cancelled.
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-XXXVI, New Delhi (‘CIT(A)’ in short) dated 02.06.2017 arising from the assessment order dated 31.03.2011 passed by the Assessing Officer (AO) under Section 271(1)(c) of the Income Tax Act, 1961 (the Act) concerning AY 2011-12.
2. As per the grounds of appeal, the assessee has challenged the imposition of penalty of Rs.4,68,035/- under Section 271(1)(c) of the Act on additions of Rs.10,64,394/- towards advertisement expenses and disallowance of depreciation of Rs.3,40,501/- on Motorcycle purchased by the assessee.
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