Excess Claim Of Depreciation By Axis Bank, Voluntary Surrendered, No Case For Penalty: Gujarat High Court

The Gujarat High Court has held that the department has failed to establish that there was concealment of particulars of the income of the assessee, Axis Bank. The department has also failed to establish that the assessee furnished inaccurate particulars of its income.

The bench of Justice Vipul M. Pancholi and Justice D. M. Desai has upheld the ruling of the Income Tax Appellate Tribunal (ITAT), in which it was held that the addition made on account of excess depreciation claimed had been surrendered by the assessee itself without any prior detection by the Revenue and the excess claim had been demonstrated to have been made for bona fide reasons.

The respondent/assessee filed its return of income by declaring total income. The assessee filed a revised return of income, declaring revised income. The return was processed, and the case of the assessee was selected for scrutiny. Pursuant to the scrutiny, a notice was issued to the assessee. The assessee filed its reply against the notice. The assessment order was passed by the AO and assessed total income.

The assessee preferred an appeal before the CIT (Appeals). The assessee's appeal was denied by CIT (A), and a penalty order was made. The assessee submitted false information about his or her income, according to the CIT (A), and was consequently subject to a fine.

The assessee preferred an appeal before the ITAT. The ITAT allowed the appeal of the assessee.

The department contended that ITAT erred in law and on facts in deleting the penalty. The ITAT, without appreciating that the assessee had furnished inaccurate particulars of the income in the return of income, has allowed the appeal of the assessee.

The department submitted that the assessee had claimed excess depreciation on the land component of the properties purchased in 2011–12, but the revenue failed to detect the same.

The court, while dismissing the appeal, held that the case was not for the levy of a penalty and that the assessee itself had to align its books of accounts with the MCA notification and disclose all particulars relating to the excess claim.

Case Title: The Principal Commissioner Of Income Tax 1, Ahmedabad Versus Axis Bank Ltd. [R/Tax Appeal No. 169 Of 2023]

Case Citation: 2023 Livelaw (Guj) 123

Date: 11/07/2023

Counsel For Petitioner: Varun K.Patel

Counsel For Respondent: R.K. Patel

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