INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Disallowance of depreciation of leased premises - -

Assessee-company was engaged in the business of publication of business magazines. It owned a premise and part of this premise was given on lease and balance part premise was used by assessee-company for business purposes. AO observed that assessee had shown income from house property and claimed 30% deduction under section 24(1) and also claimed depreciation on the very same property. AO deputed an Inspector who submitted his report and stated that one third of the said premises was being used by assessee for its business purposes and two third of the said premises was rented out. Accordingly AO disallowed the excess depreciation claimed and initiated penalty proceedings under section 271(1)(c) which was upheld by CIT(A). Held: Assessee company only offered 50% claim of depreciation as its income and conveniently/deliberately concealed the actual fact that 2/3 part of the premises was on rent. In fact, assessee repeated the said claims of depreciation as well as deduction under section 24. Thus, AO rightly levied the penalty under section 271(1)(c) and there was no need to interfere with order of CIT(A) as assessee had deliberately given inaccurate particulars of income.

Relied:Price Waterhouse Coopers (P.) Ltd. v. CIT (2012) 211 Taxman 40 (SC) : 2012 TaxPub(DT) 2967 (SC) CIT v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC) CIT v. M/s. Bennett Coleman & Co. Ltd. (2012) 259 CTR 383 (Bombay) : 2013 TaxPub(DT) 1643 (Bom-HC) CIT v. Morgan Finvest (P) Ltd. 213 Taxman 23 (Delhi) : 2013 TaxPub(DT) 0609 (Del-HC) CIT v. Societex [ITA No. 1397/Del/2012] : 2013 TaxPub(DT) 1462 (Del-HC) and CIT v. Hari Machines Ltd. (2009) 311 ITR 285 (Del) : 2009 TaxPub(DT) 0165 (Del-HC)

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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