TMI Blog2012 (7) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be an irrelevant factor for imposing the penalty - in favour of assessee. - ITA No. 5590/Del/2010 - - - Dated:- 22-6-2012 - SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA JJ. Appellant by: Shri R. Murlidhar, Adv. Respondent by: Shri UC Dubey, Sr. DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER The assessee is in appeal before us against the order of Learned CIT(Appeals) dated 10.09.2010 passed for assessment year 2005-06. The solitary grievance of the assessee is that Learned CIT(Appeals) has erred in confirming the penalty of Rs.63 lacs which was imposed under sec. 271(1)(c) of the Income-tax Act, 1961. 2. The brief facts of the case are that the assessee company is a 50:50% joint venture of NTPC and SAIL. It owns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has imposed a penalty of Rs.63 lacs which according to him is marginally higher than the tax sought to be evaded on concealed income of Rs.197,94,500. 3. Appeal to the Learned CIT(Appeals) did not bring any relief to the assessee. 4. The learned counsel for the assessee while impugning the order of the Learned CIT(Appeals) submitted that the issue in dispute is squarely covered in favour of the assessee by the decision of Hon ble jurisdictional High Court rendered in the case of CIT vs. Nalwa Sons Investments Ltd. reported in 327 ITR 543, 194 Taxman 387. He placed on record copy of the decision. He pointed out that the income of the assessee has ultimately been determined under sec. 115JB and no addition or adjustment has been made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justments made while computing such book profit; in such a situation, the revenue cannot be allowed to impose penalty with reference to the additions made while computing normal income, because such income losses its relevancy for the purpose of imposition of tax and all logical sequences falling thereon. He further submitted that the Hon'ble High Court has considered this aspect in the case of Nalwa Sons Investments (supra). 6. Learned DR on the other hand pointed out that in the case of Gold Coin Health Food Pvt. Ltd. reported in 304 ITR 308, Hon'ble Supreme Court, while construing explanation 4 appended to section 271(1)(c) has observed that if an assessee has declared loss in its return of income and that loss has been reduced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Gold Coin Health Food (P) Ltd. (supra), obviously, does not deal with such a situation. What is held by the Supreme Court in the case that even if in the Income-tax return filed by the assessee losses are shown, penalty can still be imposed in a case where on setting off the concealed income against any loss incurred by the assessee under head of income or brought forward from earlier years, the total income is reduced to a figure lower than the concealed income or even a minus figure. The court was the opinion that the tax sought to be evaded will mean the tax chargeable not as if it were the total income. Once, we apply this rationale to Explanation 4 given by the Supreme Court, in the present case, it will be difficult to sustain th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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