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ACIT,Central Circle 17 New Delhi. Vs. M/s. Spectrum Coal & Power Ltd 18, Rao Tula Ram Marg Vasant EnclaveNew Delhi
July, 12th 2021





ITA No.5405/Del./2017

ACIT, vs. M/s. Spectrum Coal & Power Ltd.,
Central Circle 17, 18, Rao Tula Ram Marg,
New Delhi. Vasant Enclave,
New Delhi – 110 015.

(PAN : AADCS9860J)


ASSESSEE BY : Ms. Ananya Kapoor, Advocate
REVENUE BY : Shri Prakash Dubey, Senior DR

Date of Hearing : 24.06.2021
Date of Order : 09.07.2021



Appellant, ACIT, Central Circle 17, New Delhi (hereinafter

referred to as ‘the Revenue’) by filing the present appeal sought to

set aside the impugned order dated 05.04.2017 passed by the

Commissioner of Income-tax (Appeals)-2, Mumbai affirming the

penalty order dated 31.08.2009 passed under section 271(1)(c) of
2 ITA No.5405/Del./2017

the Income-tax Act, 1961 (for short ‘the Act’) qua the assessment
year 2002-03 on the grounds inter alia that :-

“1. The Ld. Commissioner of Income Tax (Appeal)
has erred in law in allowing the appeal of the assessee
without truly appreciating the factual matrix of the

2. The Ld. Commissioner of Income Tax (Appeal)
has erred in law and on the facts in deleting the
penalty of Rs.57,~posed by the AO on account of
furnishing inaccurate particulars by the assessee
company of its income when it is not covered by the
Instruction No.5/2015 which was applicable for A.Y.
2000-01 & 2001-02. ”

2. Briefly stated the facts necessary for adjudication of the
controversy at hand are : On the basis of assessment framed under
section 143 (3) read with section 147 of the Act at the loss of
Rs.3,30,96,030/-, penalty proceedings have been initiated by the
AO under section 271(1)(c) read with section 275(1A) of the Act
for claiming a depreciation to the tune of Rs.1,61,10,501/- on the
ground that the assessee has furnished inaccurate particulars of
income to the extent of Rs.1,61,10,501/-. Declining the
contentions raised by the assessee, AO levied penalty to the tune of
Rs.57,51,449/- u/s 271(1)(c) of the Act @ 100% of the tax sought
to be evaded.
3 ITA No.5405/Del./2017

3. Assessee carried the matter before the ld. CIT (A) by way of
filing the appeal who has deleted the penalty after allowing the
appeal. Feeling aggrieved by the order passed by the ld. CIT (A),
the Revenue has come up before the Tribunal by way of filing the
present appeal.

4. We have heard the ld. Authorized Representatives of the
parties to the appeal, gone through the documents relied upon and
orders passed by the revenue authorities below in the light of the
facts and circumstances of the case.
5. It is the case of the AO that as against allowable depreciation
admissible to the assessee to the tune of Rs.7,14,24,272/-, assessee
claimed excess depreciation of Rs.8,75,34,773/- i.e. excess

depreciation of Rs.1,61,10,501/-. However, on the other hand, it is
the case of the assessee company that it has claimed depreciation as
per the Act to the tune of Rs.6,35,84,390/- after making adjustment
of gross total income arrived at Rs.11,09,985/-. It is also a fact on
record that as per original computation of income, assessee has
computed Rs.11,09,985/- under the normal provisions of the Act
and claimed depreciation of Rs.6,35,84,390/- on the brought
forward unabsorbed depreciation of Rs.10,56,06,113/- whereas the
AO allowed depreciation as per the Act at Rs.7,14,24,272/- and
carry forward losses arrived at Rs.35780180/- as carry forward
4 ITA No.5405/Del./2017

depreciation reduced by the AO has automatically increased to


6. In the backdrop of the aforesaid facts and circumstances of

the case, order passed by the lower authorities and arguments

addressed by the authorized representatives of both the parties, the

sole question arises for determination in this case is:-

“as to whether the assessee has concealed particulars of income
or has furnished inaccurate particulars of income during
assessment proceedings?”

7. Ld. CIT (A) deleted the penalty levied by the AO by

returning following findings :-

“The AO has levied a penalty of Rs.57,51,449/- on the excess
depreciation carried forward of Rs.1,61,10,501/- stating reason that
correct depreciation has to be allowed upto Rs.7,14,24,272/- as
against carry forward depreciation claimed by the appellant at Rs.
8,75,34,773/- and finally arrived at excess depreciation of Rs.
1,61,10,501/-. Against this the AR of the appellant brought to my
notice that page 60 of paper book which is computation of total
income for the year ended 31.03.2002. The appellant company
claimed depreciation as per income tax at Rs.6,35,84,390/- after
making adjustment on gross total income arrived at Rs. 11,09,985
which is as under:

Profit as per Profit & Loss account 13,18,66,096 Amount
Add: (Rs.)
Book depreciation considered 1,35,128
Separately 3,72,19,789
Disallowance as per Tax Audit 13,78,468
Report Clause no. 21(i)(b) 6,63,608 13,40,43,300
Deferred Revenue expenses
considered separately
Preliminary expenses written off


Depreciation as per Income tax Act 6,35,84,390

Disallowance u/s. 40(a)(ia) in

Previous year now allowed 9,62,601

Interest on Bank deposits considered

separately 11,09,985 6,35,84,390
5 ITA No.5405/Del./2017

Income from business 10,56,06,113

Interest on Bank deposits considered separately (10,56,06,113)
Less: Brought forward unabsorbed depreciation

Whereas the Ld. AO has allowed the correct depreciation at
Rs.7,14,24,272/- in the Assessment order page 5 of the assessment
order as under:

"Business Income

Gross total Income before depreciation 17,03,00,488
Less: Correct Allowable Depreciation
Less: Correct set off of losses allowable

AY 2000-01 4,24,43,864

AY 2001-02 2,33,36,322

Taxable Income 3,30,96,030

Accordingly the AR pleads that excess depreciation allowed
by the AO resulted in reduction of carry forward losses which
further lead to taxable income arrived by the AO at Rs. 3,30,96,030/-
as against income offered by the appellant company at Rs.11,09,985/-

The AR has brought to my notice that while filing return of
income as computation of total income, the following is the income
arrived u/s. 115JB.

Working of MAT u/s. 115JB

Net profit as per P & L A/c. 3,72,19,789

Add: Provisions for leave encashment 95,128

Add: Provisions for gratuity 40,000

Book profit u/s. 115JB 3,73,54,917


Tax payable 28,01,619

Add: surcharge 56,032

Total tax payable 28,57,651

The AR pleads that the while filing of return, appellant has
not filed an inaccurate particulars nor any wrong claim, only the ld.
AO made some adjustment which is also depreciation allowed In the
assessment order, the depreciation allowed by AO is of
Rs.7,14,24,272/- whereas depreciation claimed by the appellant is of
Rs.6,35,84,390/- as per computation of income and therefore it is not
concealment and penalty should be deleted.

I have argument to be verified by the AR and also again
computation statement AO of the AO in the original computation of
income appellant company has arrived Rs.11,09,985/ - under normal
provision of income tax. The appellant company has arrived Rs.
11,09,985/- under normal provision of income tax by claiming
depreciation of Rs.6,35,84,390/- on the brought forward unabsorbed
depreciation of Rs.10,56,06,113/ - whereas the ld. AO has allowed
6 ITA No.5405/Del./2017

depreciation as per income tax Act at Rs.7,14,24,272/- and carry
forward losses arrived by made Rs.35,78,0180 as carry forward
depreciation has been reduced by learned AO the income has
automatically increased to Rs.33096030/- the adjustment of carry
forward depreciation under dispute by the appellant which is
pending before Hon'ble ITAT. Prima facie I am of the opinion the
appellant company furnished all information before the AO only the
AO has reworked the carry forward depreciation by allowing more
depreciation than claimed by the appellant company and therefore
question of concealment may not arise in this case. And I have also
gone through the jurisdictional High Court decision in the case of
CIT vs. First Data India Ltd., ITA No. 2085 of 2013 dtd. 18.01.2016-
wherein it is held that:

"Where assessee had only claimed expenditure which was
disallowed by AO and due to which carry forward loss arose. It
could not be said that assessee had furnished inaccurate particulars
of income by showing carried forward loss as once a loss was shown
in e-return, the software suo-moto reflects the returned loss as
carried forward loss. Further the fact that the assessee had not
claimed carry forward loss in subsequent year was evident of the
fact that there was no intent on part of assessee to furnish inaccurate

Considering the above fact on record, the appellant company
has furnished information before the AO, however, the AO suo moto
made some objection for the depreciation and carry forward
depreciation and also respectfully following the Hon'ble
jurisdictional High Court decision in the case of CIT vs First Data
India Ltd., I am of the considered opinion this is not fit case of
penalty u/s. 271(I)(c) of the Act, therefore, the AO is directed to
delete the penalty. Hence this appeal is allowed”

8. We have perused the order passed by the ld. CIT (A) and we
are of the considered view that the ld. CIT (A) arrived at the
findings that it is not a case of furnishing of inaccurate particulars
of income as alleged by AO rather assessee company has furnished
all information before the AO. Perusal of the assessment order
shows that at the time of recomputing carry forward depreciation,
AO reached the conclusion that the assessee has claimed excess
depreciation which amounts to furnishing of inaccurate particulars
7 ITA No.5405/Del./2017

of income, whereas it is not the case when the working made and
examined by the ld. CIT (A) in para 4 of the impugned order. It is
the case of some adjustment made by the AO for examining the
issue of depreciation whereas exact depreciation claimed by the
assessee of Rs.6,35,84,390/- and not the depreciation of
Rs.7,14,24,272/- as made by the AO.
9. When the assessee company had furnished all the necessary
facts with complete working of the computation of income under
the normal provisions of the Act as well as under MAT u/s 115JB
of the Act, there is no question of furnishing inaccurate particulars
of income.
10. Coordinate Bench of the Tribunal in ITA No.1295 &

1296/Del/2012 vide order dated 03.08.2017 passed in assessee’s
own case for AY 2000-01 & 2001-02 respectively has already
decided the issue as to the claim of depreciation of the assessee
without deducting the amount of conditional grant received by the
assessee from the actual cost from the WDV of the plant and
machinery in favour of the assessee.
11. So, in view of the matter, we are of the considered view that
it is merely a case of difference arising out of the reworking of the
carry forward depreciation by the AO by allowing more
depreciation than claimed by the assessee company and not a case
8 ITA No.5405/Del./2017

of concealing of income or furnishing of inaccurate of particulars
of income. Consequently, finding no illegality or perversity in the
impugned order passed by the ld. CIT (A) who has rightly deleted
the penalty levied by the AO, the appeal filed by the Revenue is
hereby dismissed.

Order pronounced in open court on this 9th day of July, 2021.

Sd/- sd/-

Dated the 9th day of July, 2021 AR, ITAT

Copy forwarded to:
4.CIT(A), Ghaziabad.
5.CIT(ITAT), New Delhi.

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