penalty u/s 271(1)(c) on disallowed depreciation

This query is : Resolved

Mahesh (Querist)
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25 April 2008 Sir,
In one of the cases the A.O. has disallowed the depreciation on a motor cycle on the ground that the Motor Cycle was procured on 31/3 and was not registered in the name of assessee. He has also proposed penalty u/s 271(1)(c) on the addition so made. Is he justified in doing so? I have read somewhere that in such a case the penalty should not be imposed. Please provide me the details of any related case or the provisions.
This is urgent.

Thanks in advance.
Mahesh