9911796707
TMI Blog2012 (11) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal raised by the Revenue in this appeal read as follows: "1. Whether on the facts and circumstances of the case and in law the Ld CIT(A) was justified in deleting the penalty of Rs. 1,47,90,000/- u/s. 271(1)(c) of the I.T.Act 1961 by ignoring the fact that both the A.O. and CIT(A) had arrived at a concurrent finding that the assessee had furnished inaccurate particulars. 2. Whether on the facts and circumstances of the case and in law the Ld CIT(A) was justified in deleting the penalty of Rs. 1,47,90,000/- u/s. 271(1)(c) of the I.T.Act 1961 by ignoring the fact the quantum addition on account of surplus amount of Rs. 3,50,44,825/- on prepayment of sales tax deferral loan, software expenses of Rs. 13,51,839/-, repairs to plant and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d machinery (Gross amount Rs. 1,639,509 less depreciation allowed Rs. 252,138) 1,387,371 Additions to taxable income 37,378,483 Further, while assessing the 'Book Profit' as per 115JB of the Act, the Assessing Officer made an addition of Rs. 31,70,092 on account of Provision for bad and doubtful debts contending that such provision was contingent in nature. 4. Subsequently, the Assessing Officer held the assessee guilty of furnishing inaccurate particulars of income within the meaning of Section 271(1)(c) of the Act qua the aforesaid additions amounting to Rs. 4,12,06,265/-. Thus, in terms of an order passed u/s.271(1)(c) of the Act dated 30/03/2010, penalty equal to 100% of the tax sought to evaded on the aforesaid inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 115JB of the Act. In this regard, reliance has been placed on the following decisions. 1) CIT Vs. Nalwa Sons Investments Ltd., (2010) 327 ITR 543 (Delhi) 2) CIT Vs. Central Warehousing Corporation, ITA No. 999, 1091/Del/2011 3) Ruchi Strips & Alloys Ltd. Vs. DCIT, vide ITA No.6940/Mum/2008 and ITA No.6941/Mum/2008 4) M/s. Cheryl Laboratories P.Ltd. Vs. ITO, vide ITA No.2086/Mum/2009 7. We have carefully considered the submissions put forth by the respondent assessee in this regard. The claim of the Revenue is that even in a situation where the income has been assessed u/s.115JB of the Act penalty should be levied because as per the provisions of Section 115JB (5) save as otherwise provided in this section, all other provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able not as if it were the total income. Once we apply this rationale to Expln.4 given by the Supreme Court, in the present case, it will be difficult to sustain the penalty proceedings. Reason is simple. 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 under 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 under s.115JB of the Act. Hence, when the computation was made under s.115JB of the Act, the aforesaid concealment had no role to play and was totally irrelevant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT Vs. Jg Vaccum Flasks Pvt. Ltd.(2002) 83 ITD 242 (Pune). It is submitted that subsequently the principle was also confirmed by the Hon'ble Supreme Court in the case of M/s. HCL Comnet Systems & Service Ltd. (2008) 305 ITR 409. It was explained that therefore no adjustment was required to be made to the 'book profits' as per the Section 115JB on account of Provision for bad and doubtful debts. It has been explained that only after an amendment to Section 115JB introduced by Finance Act, 2009 retrospectively from 01/04/2001, adjustment is also required to be made for the provision for diminution in value of assets while computing 'book profits' as per Section 115JB of the Act. It was therefore submitted that in this background the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances it can be said that at the time of filing of return the issue in question was debatable where two view were possible and therefore such a claim made in return of income, though found untenable by the Assessing Officer, cannot be construed as furnishing of inaccurate particulars of income within the meaning of Section 271(1)(c) of the Act. Therefore, on this count also we find no justification for the penalty imposed by the Assessing Officer.
11. In the result we hereby uphold the ultimate conclusion of CIT(A), albeit on different grounds as discussed above.
12. Resultantly, the appeal of the Revenue is dismissed.
Decision pronounced in the open Court on 25th day of May, 2012. X X X X Extracts X X X X X X X X Extracts X X X X
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