Allowing the appeal the Court held that  giving up the claim of depreciation under section 32 would not automatically entail penalty under section 271(1)(c) . The imposition of penalty was neither automatic nor was expected to be imposed even if the bona fide explanation of the assessee was not accepted by the statutory authorities. There was no concealment on the part of the assessee. The purchase of the three pay loaders in question on the last day of the previous year was supported by the production of purchase invoices before the assessing authority. Even if the assessee was confused during the course of the assessment proceedings about the place of delivery, whether at T or P, it could not be said that the assessee’s statement was false because there was no rebuttal of the fact that the pay loaders were available ready for use at Chennai port before the last day was over on March 31, 2000. The assessee produced the relevant evidence before the assessing authority as well as the Commissioner (Appeals). For reasons best known to the assessee he gave up the claim for depreciation but that did not mean that the assessee admitted the guilt of giving a wrong explanation or a false explanation or having concealed his income or filing inaccurate particulars. There was absence of mens rea or guilty animus on the part of the assessee. No material brought on record by the assessing authority indicated or proved guilty animus on the part of the assessee. The order of the Tribunal restoring the penalty imposed by the Assessing Officer was set aside. (AY. 2000-01)