M/s Batra Palace (P) Ltd., Ludhiana v. ITO, Ludhiana

CO 19/CHANDI/2011 | 2005-2006
Pronouncement Date: 30-03-2011 | Result: Dismissed

Appeal Details

RSA Number 1921523 RSA 2011
Assessee PAN AABCB6105D
Bench Chandigarh
Appeal Number CO 19/CHANDI/2011
Duration Of Justice 1 month(s) 21 day(s)
Appellant M/s Batra Palace (P) Ltd., Ludhiana
Respondent ITO, Ludhiana
Appeal Type Cross Objection
Pronouncement Date 30-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-03-2011
Assessment Year 2005-2006
Appeal Filed On 08-02-2011
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI N. BARATHVAJA SANKAR VICE PRESIDENT AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NO.21/CHD/2011 ASSESSMENT YEAR: 2005-06 THE ITO VS. M/S BATRA PALACE (P) LTD . WARD-VII(1) FEROZEPUR ROAD LUDHIANA LUDHIANA PAN NO. AABCB6105D & C.O. NO. 19/CHD/2011 (IN ITA NO.21/CHD/2011) ASSESSMENT YEAR: 2005-06 M/S BATRA PALACE (P) LTD VS. THE ITO WARD-4 FEROZEPUR ROAD LUDHIANA WARD-VII(1) LUDHIANA PAN NO. AABCB6105D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K.SAINI RESPONDENT BY: SHRI SUDHIR SEHGAL / SHRI ASHOK GOYA L ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) -II LUDHIANA DATED 22.11.2010 RELATING TO ASSESSMENT YE AR 2005-06 AGAINST PENALTY LEVIED U/S 271 (1)(C) OF THE I.T. ACT 1961 . THE ASSESSEE HAS FILED A CROSS OBJECTION AGAINST THE APPEAL FILED BY THE R EVENUE. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD . CIT(A)-II LD. HAS ERRED IN DELETING THE PENALTY ON THE ISSUE OF DISALLOWANCE OF DEPRECIATION OF RS. 2 06 0 75/- AND IN RESPECT OF TWO PARTIES WHO HAD DEALING WITH THE APPELLANT TO THE TUNE OF RS. 13 60 000/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A)-II LUDHIANA HAS ERRED IN REDUCING PENALTY IMPOSED @ 150% TO 100% OF THE TAX SOUGHT TO BE EVADED. 3. THAT THE ORDER OF LD. CIT(A) LUDHIANA BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE ASSESSEE IN ITS CROSS OBJECTION HAS RAISED T HE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A)-II LUDHIANA HAS RIGHTLY DELETED THE PENALTY ON THE ISSUE OF DISALLOWANCE OF DEPRECIATION OF RS. 2 06 075/- AND IN RESPECT OF TWO PARTIES WHO HAD DEALING WITH THE APPELLANT TO THE TUNE OF RS. 13.60 LACS. 2. THAT THE LD. CIT(A)-II LUDHIANA HAS ERRED IN CONFIRMING THE PENALTY IN RESPECT OF PURCHASES MADE FROM M/S AMAR NATH & COMPANY TO THE TUNE OF RS. 4 02 350/- AND FROM ZOEL TRADERS TO THE TUNE OF RS . 6.60 LACS. 4. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL FILE D BY THE REVENUE IS AGAINST THE PARTIAL DELETION OF THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. THE ASSESSEE HAS FILED A CROSS OBJECTION AGAINST CO NFIRMATION OF PENALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF PURCHASES MA DE FROM TWO PARTIES. 3 BOTH THE APPEALS FILED BY THE REVENUE AND CROSS OBJ ECTION OF THE ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 5. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOLLOWING ADDITIONS WERE MADE BY THE A SSESSING OFFICER :- I) ADDITION OF RS. 21 09 875/- ON ACCOUNT OF BOGU S CLAIM OF EXPENDITURE ON BUILDING REPAIRS OF HOTEL II) ADDITION OF RS. 4 02 350/- ON ACCOUNT OF BOGUS EXPENDITURE CLAIMED FOR PURCHASE OF LINEN CLOTH AND CURTAINS. III) ADDITION OF RS. 2 06 075/- ON ACCOUNT OF DEPRECIATION DISALLOWED ON THE LET OUT PORTION OF H OTEL BUILDING. 6. THE ABOVE SAID ADDITIONS AT (I) AND (II) HAVE BE EN CONFIRMED BY THE CIT(A) AND UPHELD BY THE TRIBUNAL VIDE ORDER DATED 15.5.2009. THE ADDITION IN RESPECT OF SR.NO. (III) ABOVE HAS ALSO BEEN DECIDED IN FAVOUR OF THE REVENUE BY THE TRIBUNAL. THE ASSESSING OFFI CER ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE WHY PENALTY U/S 271(1) (C) OF THE ACT MAY NOT BE LEVIED IN RESPECT OF THE ABOVE SAID ADDITIONS. T HE EXPLANATION OF THE ASSESSEE IN RESPECT OF DISALLOWANCE OF EXPENDITURE ON HOTEL BUILDING REPAIR AND OTHER VARIABLES WAS THAT SIMILAR EXPENSE WERE ALLOWED IN ASSESSMENT YEAR 2004-05. HOWEVER DURING THE PERIO D UNDER CONSIDERATION A CONFIRMATION FROM THE PARTIES WERE NOT RECEIVED B Y THE ASSESSING OFFICER AND THE ADDITIONS WERE CONFIRMED. THE CONTENTION OF THE ASSESSEE WAS THAT OUT OF THE SAID PARTIES TWO PARTIES HAD CONFIRMED TO HAVE MADE 4 TRANSACTIONS WITH THE ASSESSEE THOUGH ONE PARTY HAV E DENIED TO MAKE ANY TRANSACTIONS WITH THE ASSESSEE. AS PER THE ASSESSE E THE ADDITIONS WERE MADE MERELY ON THE BASIS OF DOUBTS AND SUSPICION AN D BY REJECTING THE BOOKS OF ACCOUNT. IN RESPECT OF THE ADDITIONS MADE ON ACCOUNT OF DEPRECIATION CLAIMED ON THE LET OUT PORTION OF THE BUILDING THE LD. AR POINTED OUT THAT THE SAME WAS DISALLOWED AS RENTAL INCOME WAS TREATED AS INCOME FROM HOUSE PROPERTY WHEREAS 50% OF DEPRECIAT ION WAS ALLOWED ON THE HOTEL BUILDING. THE PLEA OF THE ASSESSEE IN TH IS REGARD WAS THAT MERE DISCLOSING OF INCOME UNDER A WRONG HEAD DOES NOT AM OUNT TO CONCEALMENT. THE ASSESSING OFFICER OBSERVED THAT THE DISALLOWAN CE OF EXPENDITURE WAS MADE ON ACCOUNT OF BOGUS EXPENDITURE CLAIMED BY THE ASSESSEE WHERE THE ASSESSEE HAD FAILED TO ESTABLISH THE PURCHASES OF T HE ITEMS WITHOUT PROPER EVIDENCE AND IN VIEW OF THE BOGUS CLAIM OF EXPENDIT URE THE BOOKS OF ACCOUNT WERE REJECTED AND SUCH REJECTION HAS BEEN C ONFIRMED BY CIT(A) AND UPHELD BY THE TRIBUNAL. FURTHER A PORTION OF THE PROPERTY OWNED BY THE ASSESSEE WAS GIVEN ON RENT FOR A PERIOD OF 12 Y EARS AND SUCH RENTAL INCOME WAS ASSESSABLE AS INCOME FROM HOUSE PROPERTY AND HALF DEPRECIATION WAS RIGHTLY DISALLOWED ON THE LET PORT ION OF THE HOTEL BUILDING. THE ASSESSEE WAS HELD TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AND PENALTY AT THE RATE OF 150% OF THE TA X SOUGHT TO BE EVADED TOTALING RS. 14 91 307/- WAS IMPOSED. THE CIT(A) H ELD THAT OUT OF FOUR PARTIES TWO PARTIES HAVE CONFIRMED ABOUT THE SUPPL Y OF GOODS AND RECEIPTS OF PAYMENTS FROM ASSESSEE THOUGH ONE PARTY DID NOT RESPOND TO THE LETTER ISSUED BY THE ASSESSING OFFICER AND ANOTHER PARTY M /S AMARNATH & COMPANY DENIED ANY DEALINGS WITH THE ASSESSEE IT W AS HELD BY CIT(A) THAT NO PENALTY IS TO BE LEVIED IN RESPECT OF THE T WO PARTIES WHO HAD CONFIRMED THE TRANSACTIONS. HOWEVER IN RESPECT O F M/S AMARNATH & COMPANY WHO HAD DENIED THE TRANSACTIONS WITH THE AS SESSEE AND M/S TOOL 5 TRADERS THOUGH THERE IS NO MATERIAL ON RECORD TH E CIT(A) HELD THAT THERE WAS SUFFICIENT MATERIAL AGAINST THE ASSESSEE AND EV EN THOUGH NO CROSS EXAMINATION HAD BEEN ALLOWED THE LEVY OF PENALTY I N SUCH CIRCUMSTANCES WAS HELD TO BE JUSTIFIED. IN RESPECT OF DISALLOWA NCE ON DEPRECIATION ALSO AS THE ASSESSEE HAD DISCLOSED PARTICULARS OF THE R ENTAL INCOME IN THE RETURN OF INCOME FOLLOWING THE RATIO LAID DOWN BY HON'BLE SUPREME COURT IN M/S RELIANCE PETRO PRODUCTS 322 ITR 158 (SC) IT WAS HE LD THAT MERELY MAKING AN INCORRECT CLAIM DOES NOT TANTAMOUNT TO FURNISHIN G OF INACCURATE PARTICULARS OF INCOME HENCE THE PENALTY ON THIS AC COUNT WAS DELETED. HOWEVER THE ASSESSING OFFICER WAS DIRECTED TO IMPO SE PENALTY AT THE RATE OF 100% OF THE TAX SOUGHT TO BE EVADED. THE REVENUE IS IN APPEAL AGAINST THE PORTION OF THE PENALTY DELETED ON THE ALLEGED B OGUS PURCHASES MADE BY THE ASSESSEE AND THE DENIAL OF DEPRECIATION AND THE ASSESSEE HAS FILED A CROSS OBJECTION AGAINST UPHOLDING OF PENALTY U/S 27 1(1)(C) OF THE ACT. 7. SHRI N.K.SAINI APPEARED FOR THE REVENUE AND SHRI SUDHIR SEHGAL ALONG WITH SHRI ASHOK GOYAL APPEARED FOR THE ASSESS EE AND PUT FORTH THEIR CONTENTIONS. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THE ASSESSEE TO HAVE MADE HUGE PURCHASES OF HOTEL BUILD ING REPAIR MATERIAL AND BED SHEETS BED COVERS THE DETAILS OF PURCHASES MA DE PARA WISE AND BILL WISE ARE INCORPORATED AT PAGE 2 OF THE ASSESSMENT O RDER. THE INVOICE WISE ITEMS PURCHASED BY THE ASSESSEE TOTALING OF RS. 24 02 350/- ARE INCORPORATED UNDER PARA 3 AT PAGES 2 & 3 OF THE AS SESSMENT ORDER. THE ASSESSING OFFICER SOUGHT INFORMATION U/S 133(6) OF THE INCOME TAX ACT. THE LETTERS ADDRESSED TO M/S TOOL TRADERS AND A/S A MIT ENTERPRISES OF 6 NEW DELHI WERE RECEIVED BACK WITH THE POSTAL REMARK S NO SUCH NUMBER. ANOTHER PARTY M/S AMARNATH & COMPANY WERE CONTACTED ON THE TELEPHONE AND IT WAS INFORMED BY THEM THAT THEY HAVE NOT SOLD ANY MATERIAL TO THE ASSESSEE AT LUDHIANA. THE SAID PARTY ALSO VIDE LET TER DATED 21.12.2007 INFORMED THE ASSESSING OFFICER THAT DURING THE FINA NCIAL YEAR 2004-05 THEY HAD NO ACCOUNT IN THE NAME OF THE ASSESSEE IN THEIR BOOKS OF ACCOUNT. THE ASSESSEE HAD SHOWN TOTAL PURCHASES OF RS. 4 02 350/ - FROM M/S AMARNATH & COMPANY WHICH WAS HELD TO BE A BOGUS PURCHASES BY THE ASSESSEE. THE SECOND PARTY M/S AMIT ENTERPRISES IN A COMMUNICATIO N TO THE ASSESSEE SENT A LETTER TO ASSESSING OFFICER CONFIRMING TO HAVE SU PPLIED THE MATERIAL THROUGH BILL NO. 834 DATED 2.5.2004 AND BILL NO. 84 2 DATED 1.4.2004 TOTALING RS. 8 20 000/-. THE ASSESSING OFFICER DID NOT BELIEVE THE SAID EVIDENCE FURNISHED AS THE INFORMATION SOUGHT U/S 13 3(6) OF THE ACT WAS RECEIVED BACK WITH THE POSTAL REMARKS NO SUCH NUM BER. THE ASSESSEE HAD ALSO MADE PURCHASES FROM M/S SUPERTECH ENGINEERING WORK AND THE SAID PARTY ALSO CONFIRMED THE TRANSACTIONS WITH THE ASSE SSEE. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SALE INVOICES WERE FAKE / BOGUS AS THE SAME APPEAR TO HAVE BEEN PREPARED BY A SINGLE PERSO N EXACTLY IN THE SAME HANDWRITING AND THE SAME STYLE AND AT ONE POINT OF TIME. THE ASSESSEE HAD MADE PURCHASES AND BUILDING REPAIR MATERIAL FROM TH E ABOVE PARTIES AND THE MODE OF PAYMENT REFLECTED IN THE BOOKS OF ACCOU NT WAS CASH PAYMENT OF RS. 20 000/- EACH ON VARIOUS DATES. THE ASSESSI NG OFFICER FURTHER FOUND THAT THOUGH THE ASSESSEE HAD DEBITED RS. 21 0 9 875/- ON ACCOUNT OF COST OF HOTEL BUILDING REPAIR MATERIAL BUT NO BILL S OF THE LABOUR ALLEGEDLY ENGAGED IN THE REPAIR AND MAINTENANCE WORK WAS RECO RDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSEE DURING THE C OURSE OF ASSESSMENT PROCEEDINGS FILED A COPY OF THE BUILDING REPAIR AND MAINTENANCE ACCOUNT FOR ITS ACCOUNTS BOOK AND ON COMPARISON CERTAIN DI SCREPANCIES WERE FOUND 7 BY THE ASSESSING OFFICER. IN THE COPY OF THE BUILD ING REPAIR ACCOUNT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSEE HAD SHOWN TOTAL CASH PAYMENT OF RS. 1 80 000/- TO THE LABOUR AND CO RRESPONDINGLY THE COST OF MATERIAL HAD BEEN REDUCED BY THE SAME AMOUNT. F URTHER THE TOTAL FIGURE OF EXPENDITURE TALLIED WITH THE AMOUNT REFLECTED IN THE LEDGER ACCOUNT. THE PURCHASE OF MATERIAL AS PER THE EXPENSES IN THE LEDGER INCLUDES AN AMOUNT OF RS. 1 80 000/- SHOWN AS PURCHASES FROM M/ S AMIT ENTERPRISES VIDE BILL NO. 834 DATED 2.4.2004 BUT THE SAME WAS OMITTED FROM THE STATEMENT OF ACCOUNT FILED DURING THE COURSE OF ASS ESSMENT PROCEEDINGS. UNDER THE CIRCUMSTANCES A SUM OF RS. 21 09 875/- W AS ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF BOGUS BILL. T HE SECOND DISPUTE WHICH AROSE DURING THE ASSESSMENT PROCEEDINGS WAS I N CONNECTION WITH THE ACCESSIBILITY OF RENTAL INCOME. THE ASSESSEE HAD S HOWN RENTAL INCOME FROM PART OF THE HOTEL BUILDING LET OUT BY IT AS IN COME FROM BUSINESS WHICH WAS ASSESSED AS INCOME FORM HOUSE PROPERTY BY THE ASSESSING OFFICER. THE ASSESSEE HAD FURTHER CLAIMED DEPRECIA TION ON THE HOTEL PROPERTY WHICH WAS RESTRICTED TO 50%. IN APPEAL TH E CIT(A) CONFIRMED THE ADDITIONS AND TRIBUNAL UPHELD THE SAME. 9. THE ISSUE ARISING BEFORE US IS IN CONNECTION WIT H THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IT IS A TRITE LAW THAT THE PENALTY PROCEEDINGS ARE INDEPENDENT OF THE ASSESSMENT PROCEEDINGS AND THERE IS NO JUSTIFICATION FOR LEVY OF PENALTY FOR CONCEALMENT U/S 271 (1) (C) OF THE ACT IN RESPECT OF EACH ADDITION/S MADE IN THE HANDS OF THE ASSESSEE. IN THE FACTS OF THE PRESENT CASE THE ASSESSING OFFICER DURING THE ASSE SSMENT PROCEEDINGS HAD AT LENGTH CARRIED OUT INVESTIGATIONS IN RESPECT OF THE EXPENDITURE TOTALING RS. 21 09 875/- ON ACCOUNT OF HOTEL BUILDING REPAIR MATERIAL. WE HAVE REFERRED TO THE OBSERVATIONS OF THE ASSESSING OFFIC ER WHILE MAKING THE 8 AFORESAID ADDITIONS IN THE PARAS HEREINABOVE. THE TOTAL EXPENDITURE WAS INCURRED UNDER THE AFORESAID HEAD OF BUILDING REPAI R BY MAKING PURCHASE FROM FOUR DIFFERENT PARTIES ALL AT DELHI. TWO OF THE SAID PARTIES HAD CONFIRMED THE TRANSACTIONS WITH THE ASSESSEE. ONE OF THE PARTY M/S AMAR NATH AND COMPANY HAD DENIED ANY TRANSACTION WITH TH E ASSESSEE THOUGH THE ASSESSEE HAD SHOWN PURCHASES MADE FROM THE SAID PARTY TO THE TUNE OF RS. 4 02 350/-. THE FOURTH PARTY M/S TOOL TRADER S FROM WHOM PURCHASES WERE MADE TO THE EXTENT OF RS. 6 60 000/- WAS NOT T RACEABLE. THE ADDITION WAS MADE DUE TO SEVERAL FACTORS ADDRESSED BY THE AS SESSING OFFICER. HOWEVER TWO PARTIES I.E. M/S AMIT ENTERPRISES AND M/S SUPERTECH ENGINEERING WORKS HAD CONFIRMED THE SUPPLY OF MATE RIAL TO THE ASSESSEE. IN THE FACE OF THE ABOVE SAID EVIDENCE AVAILABLE ON RECORD WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) THAT THERE IS N O JUSTIFICATION FOR LEVY OF PENALTY FOR CONCEALMENT U/S 271(1)(C) OF THE ACT IN RESPECT OF THE ABOVE SAID TWO PARTIES. THE THIRD PARTY M/S AMARNATH AN D COMPANY HAD DENIED THE TRANSACTIONS WITH THE ASSESSEE AND NO EVIDENCE HAS BEEN FURNISHED BY THE ASSESSEE EVEN DURING THE PENALTY PROCEEDINGS TO ESTABLISH ITS CLAIM. THE ONLY PLEA RAISED BY THE ASSESSEE WAS THAT NO OP PORTUNITY TO CROSS EXAMINE WAS GIVEN BUT WE FIND THE ASSESSEE NOT TO HAVE DISCHARGED ITS ONUS OF PROVING THE GENUINENESS OF ITS PURCHASES OF RAW MATERIAL MADE FROM THE AFORESAID PARTIES. IN RESPECT OF THE FOURTH PARTY I.E. M/S TOOL TRADER S NO CONFIRMATION WAS FILED BY THE ASSESSEE AND EVEN THE SUMMONS ISSUED B Y THE ASSESSING OFFICER WERE RETURNED BACK BY THE POSTAL AUTHORITIE S AND HENCE THE DISALLOWANCE. THE GENUINENESS OF THE EXPENDITURE WAS DOUBTED BY THE ASSESSING OFFICER IN VIEW OF THE NATURE OF INVOICES EXAMINED AND ALSO ON ACCOUNT OF THE PAYMENTS BEING MADE IN ENTIRETY IN C ASH. THE ASSESSEE HAD FAILED TO BRING ON RECORD ANY EVIDENCE TO PROVE THE TRANSPORTATION OF GOODS 9 BY THE SUPPLIERS AT DELHI TO THE ASSESSEE AT LUDHIA NA. FURTHER THERE WAS NO EVIDENCE AS TO HOW CASH PAYMENTS LESS THAN RS. 2 0 000/- WERE MADE ON SEVERAL DATES OF LARGE AMOUNT RANGING FROM RS. 96 2 75 TO RS. 4 40 000/-. THE TRIBUNAL VIDE ITS OBSERVATION UNDER PARA 7 AT PAGES 4 & 5 OF THE QUANTUM ORDER HAVE HELD THAT IN VIEW OF THE INFEREN CES DRAWN BY THE ASSESSING OFFICER THE EXPENDITURE CLAIMED ON THE S TRENGTH OF THE INVOICES DOES NOT INSPIRE CONFIDENCE AND THE SAME HAVE BEEN RIGHTLY HELD TO BE IN GENUINE BY THE ASSESSING OFFICER. IN VIEW OF TH E ABOVE SAID FINDINGS OF THE ASSESSING OFFICER WHICH IN TURN HAVE BEEN UPHE LD BY THE TRIBUNAL THE ASSESSEE IS EXIGIBLE TO THE LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT IN RESPECT OF THE PURCHASES MADE FROM M/S AMARNATH & C OMPANY AND M/S TOOL TRADERS. WE CONFIRM THE ORDER OF CIT(A) IN TH IS REGARD. 10. FURTHER PENALTY WAS LEVIED BY THE ASSESSING OF FICER ON THE DISALLOWANCE OF DEPRECIATION ON BUILDING. THE ASSE SSEE HAD SHOWN THE RENTAL INCOME FROM PART OF THE BUILDING AS INCOME F ROM BUSINESS WHICH WAS HELD TO BE INCOME FROM PROPERTY BY THE ASSESSIN G OFFICER AND DEPRECIATION ON OF THE BUILDING WAS DISALLOWED B EING RELATABLE TO THE RENTED PORTION. THE SAID DISALLOWANCE OF DEPRECIAT ION HAS BEEN UPHELD BY THE TRIBUNAL. THE ASSESSEE CLAIMS TO HAVE FURNISHE D COMPLETE DETAILS IN RESPECT OF THE INCOME EARNED FROM RENTING OUT AND A LSO IN RESPECT OF THE CLAIM OF DEPRECIATION ON THE BUILDING. THE SAID CL AIM OF DEPRECIATION WAS REJECTED BY THE ASSESSING OFFICER AFTER ASSESSING T HE RENTAL INCOME AS INCOME FROM PROPERTY. THE ASSESSING OFFICER HAD LE VIED PENALTY ON THIS ADDITION WHICH WAS DELETED BY CIT(A) FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN M/S RELIANCE PETRO PRODUCTS PVT LTD (SUPRA). THE ADDI TION IN THE PRESENT CASE WAS MADE ON A CLAIM MADE BY THE ASSESSEE WHICH WAS HELD TO BE INCORRECT 10 WHICH CANNOT TANTAMOUNT TO FURNISHING INACCURATE PA RTICULARS OF INCOME MAKING ASSESSEE EXIGIBLE TO LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) IN DELET ING THE PENALTY ON THE ISSUE OF DISALLOWANCE OF DEPRECIATION OF RS. 206075 /-. UPHOLDING THE ORDER OF CIT(A) WE DISMISS THE GROUND NO. 1 RAISED BY THE REVENUE AND THE GROUND NO.2 RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION. 11. THE GROUND NO.1 RAISED BY THE ASSESSEE IN ITS C ROSS OBJECTION WAS IN SUPPORT OF THE ORDER OF CIT(A) WHICH IS DISMISSED. 12. THE REVENUE VIDE GROUND NO. 2 IS AGGRIEVED BY T HE ORDER OF CIT(A) IN REDUCING THE PENALTY IMPOSED AT THE RATE OF 150% TO 100% OF THE TAX SOUGHT TO BE EVADED. WE FIND NO MERIT IN THE SAI D GROUND NO.2 RAISED BY THE REVENUE AND HENCE THE SAME IS DISMISSED. 13. IN THE RESULT APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF MARCH 2010. SD/- SD/- (N.BARATHVAJA SANKAR) (SUSHMA CHOWLA) VICE PRESIDENT JUDICIAL MEMBER DATED : 30 TH MARCH 2010 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 11