Law:

Section:

Section 271(1)(c ) of the Income-tax Act, 1961 - Penalty - For concealment of income  Where Tribunal had clearly found that claim of assessee for depreciation was bogus on non-existing assets, even though assessee had withdrawn such claim by filing revised return after search yet levy of penalty on it was justified [A.Y. 1995-96] The assessee had claimed 100 per cent. depreciation originally. The assessment was reopened under section 147. A survey under section 133A was carried out by the Department in the case of the lessee, BSA. The said company had obtained steel rolls on lease basis. The lease transaction was a tripartite transaction involving the manufacturer/supplier, lessor, the assessee, and the lessee, BSA. On investigation, it was seen that the lessee had not produced the original delivery challans in all the cases. No documents were produced to obtain the steel rolls on lease. The enquiry conducted showed that the suppliers had never supplied any steel rolls to BSA ; that the bills were raised to facilitate finance from credit institutions. On the basis of the materials, the Department came to the conclusion that the alleged lease transaction was false and a make-believe one, to enable BSAL to obtain finance and the assessee to claim 100 per cent. depreciation. In its letter, annexed to the revised return filed, the assessee claimed that it had carried out that transaction in good faith and that on coming to know the result of the investigation and the information given by the revenue, it was withdrawing the claim for depreciation. However, penalty was imposed on the assessee under section 271(1)(c). The Tribunal upheld the levy of penalty. Held that Tribunal had clearly found that the claim of the assessee for depreciation was bogus on the non-existing assets. The revised return was filed of consequent survey; which confirmed the finding that the assessee was guilty of concealment of income by furnishing inaccurate particulars. It could not deny the fact that the revised return itself was consequent on the information in possession of the revenue. In the aforesaid factual backdrop, the conclusion was factual, giving rise to no questions of law.…

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