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2017 (3) TMI 672 - AT - Income TaxPenalty u/s. 271(1)(c) - disallowance on account of loss incurred on purchase and sale of securities and units as per provision u/s 94(7) - Adjustments to book profit by AO u/s 115JB - Held that:- Under the scheme of the Act, the total income of assessee is first computed under the normal provisions of the Act and tax payable on such total income is compared with the prescribed percentage of the book profits computed under section 115JB of the Act. The higher of the two amounts is regarded as total income and tax is payable with reference to such total 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 sec. 115JB of the Act. In the case before them the assessee was assessed u/s. 115JB of the Act and not under normal provisions. No doubt there was concealment but that had its repercussions only when the assessment was done under the normal procedure. The assessment as per the normal procedure was, however, not acted upon. On the contrary, it is the deemed income assessed u/s. 115JB of the Act which has become the basis of assessment as it was higher of the two. Tax is thus paid on the income assessed u/s. 115JB of the Act. Hence, when the computation was made u/s. 115JB, the concealment had no role to play and was totally irrelevant. Therefore, the concealment did not lead to tax evasion at all. Therefore, penalty u/s. 271(1)(c) of the Act could not be imposed. Also it is on record as appearing in the Ld. CIT(A)’s order that assessee has filed total dividend claimed as exemption u/s. 10(35) of the Act. That further in the order itself in the assessee’s own submission as on record, it is clear that complete and true details in relation to claim made in the return were furnished, details of dividend as well as statement of transactions of mutual fund were duly filed before the AO as and when required. See Nalwa Sons Investments Ltd.[2012 (5) TMI 150 - SUPREME COURT OF INDIA ] - Decided in favour of assessee
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