This case, recorded as ITA No. 1798/DEL/2022, features Begud Beverages Pvt. Ltd., located in Vasant Kunj, New Delhi, as the appellant, and the Assistant Commissioner of Income Tax, Circle-4(2), New Delhi, as the respondent. The controversy pertains to the 2015-16 assessment year and centers on a significant penalty for an incorrect depreciation claim originally filed by the appellant.
The appeal is against the order of the Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre, Delhi. This order originated from a penalty order dated June 26, 2018, passed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, concerning the incorrect depreciation claimed amounting to Rs.1,36,59,217.
The Tribunal heard the arguments and reviewed the materials on record. The primary contention from the appellant was that the wrong claim of depreciation did not affect the tax liability as it only reduced the loss carried forward, which was not utilized in subsequent returns.
The Tribunal, referencing the Hon’ble Delhi High Court’s decision in CIT v. Brahmaputra Consortium Ltd., noted the similarities in the factual matrix and recognized the inadvertent nature of the error. It concluded that the excess depreciation claim was due to a bona fide human error with no malicious intent to evade tax.
The Tribunal reversed the decision of the CIT(A) and directed the Assessing Officer to delete the penalty. The decision was pronounced on September 27, 2023, by Judicial Member Shri Chandra Mohan Garg and Accountant Member Shri Pradip Kumar Kedia.
Penalty Dispute over Depreciation Claim: Begud Beverages Pvt. Ltd. vs ACIT, Case ITA 1798/DEL/2022
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