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2011 (1) TMI 171 - AT - Income TaxPenalty u/s. 271 (1) (c)- The total income of the assessee is first computed under the normal provisions of the Act and tax payable on such income is compared with the prescribed percentage of the ‘book profits’ computed under section 115JB - The higher of the two amounts is regarded as total income and tax is payable with reference to such income - If the tax payable under the normal provisions is higher, such amount is the total income of the assessee, otherwise ‘book profits’ are deemed as the total income of the assessee in terms of section 115JB - Hence, no penalty could have been imposed on the assessee because there was no tax sought to be evaded because the addition in respect of which penalty was imposed was made while computing total income under the normal provisions of the Act and ultimately the total income of the Assessee was determined on the basis of book profits u/s.115JB of the Act - Cancel the penalty imposed by the Assessing Office - Appeals by the Assessee are allowed.
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