INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Assessee revised its claim of depreciation on the basis of re-grouping of assets in the return filed under section 153A but could not file full details in respect of excess claim -

Assessee claimed additional depreciation of Rs. 75 lakhs in return filed in pursuance of notice issued under section 153A. AO required assessee to explain it. Assessee contended that in the return of income filed under section 139, claim of depreciation was not correct in as much as groupings of assets for the purpose of claiming depreciation were not correct, whereas while filing returns under section 153A, assets were regrouped and depreciation was re-computed which resulted in higher depreciation for cocnerned assessment year 2004-05. AO was not convinced with assessee's expalantion, and therefore, levied penalty under section 271(1)(c). Assessee challenged this.Held: AO required assessee to file full details in respect of excess claim of depreciation, in such situation assessee had to file relevant documents/evidence from which AO could have drawn correct inference but assessee failed to do so. As a logical corollary, the burden could not be shifted to the department and burden of proof rests with assessee. Matter was remanded back to AO with direction to assessee to file relevant documents/evidence regarding claim of additional depreciation on account of reclassification of assets.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2004-05

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