TMI Blog2013 (10) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2004-05 - the reopening of the assessment u/s. 147 r.w. Section 148 was justifiable – Decided against Assessee. Adjustment of unabsorbed depreciation while computing the book profit u/s. 115JB – Held that:- Wherever either of the figures is nil, no deduction is to be made from book profit - Under the clear provisions, assessing officer did not allow deduction of unabsorbed depreciation in the current assessment year on the ground that unabsorbed depreciation was fully utilized and reduced from the book profit in assessment year 2003-04 and therefore there is no unabsorbed depreciation available which can be reduced in this year - Since unabsorbed depreciation as per books is nil for assessment year 2004- 05, it will not be permissible to reduce any amount on account of unabsorbed depreciation or brought forward business loss from book profit - there is no brought forward unabsorbed depreciation available in assessment year 2004-05, there is no question of reducing the same from book profit - The action of the assessing officer is therefore confirmed – Decided against Assessee. Deletion of Penalty u/s 271 (1)(c) – Concealment of Income – Held that:- Following COMMISSIONE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation of Rs.257.97 lakhs should not be added back while calculating the book profit u/s. 115JB of IT Act for A.Y. 2004-05. The AO has noted that the assessee had claimed the unabsorbed depreciation twice, first in the year 2003-04 and again in the assessment year 2004-05 while computing the book profit u/s. 115JB. In this connection, the figures has noted by the AO in the show cause notice were as under: "The return of income for the above assessment year was filed declaring income at Rs.NIL after setting off the brought forward unabsorbed business loss and unabsorbed depreciation of earlier assessment year to the extent of Rs.3,69,63,276/- and the tax was paid u/s. 115JB of the Act on book profit of Rs.2,56,96,286/-. The said book profit was worked out after reduction of brought forward unabsorbed depreciation of Rs.2,57,97,105/-. Order u/s. 143(3) of the Act was passed determining the total income at Rs.NIL and book profit u/s.115JB was computed as Rs.2,59,57,980/- after allowing the reduction of brought forward unabsorbed depreciation of Rs.2,57,97,105/- as claimed by the company. However, no unabsorbed depreciation is available to be brought forward in the case of company f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to examine the calculation of unabsorbed depreciation for the purpose of computation of tax liability u/s.115JB of IT Act. The said discrepancy in the first assessment order has pointed out by the Revenue Department appears to be corrected. In the said assessment order, there is no mention at all about the computation of brought forward unabsorbed depreciation. In any case, once the admitted factual position was that the amount of unabsorbed depreciation had already been exhausted in A.Y. 2003-04 then legally the assessee is not entitled for double claim in A.Y. 2004-05. We, therefore, hold that the reopening of the assessment u/s. 147 r.w.s 148 was justifiable. This ground of the assessee is, therefore, dismissed. 6. Next ground is challenging the adjustment of unabsorbed depreciation while computing the book profit u/s. 115JB. In this regard, learned CIT(A) has reproduced the computation of the tax liability for A.Y.2003-04 u/s.115JB of IT Act to demonstrate that the impugned amount had already been observed and exhausted in that year. Learned CIT(A) has thereafter held as under: "I have considered the facts of the case, assessment order and appellant's submission. The is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income vide an order u/s. 143(3), dated 6.12.2006, the AO has invoked the provisions u/s. 155JB and the income was taxed accordingly. Admittedly, there was no tax on the assessee in respect of regular business income. Due to this reason, while levying the penalty u/s. 271(1)(c), vide order dated 30th of March, 2010, it was noted by the AO that the total income was determined at Rs. NIL by the AO after disallowing capital expenditure of Rs.8,14,793/-. The book profit was computed after an adjustment of deferred tax of Rs.2,61,694/-. We have also noted that there was no clear cut finding in the impugned penalty order about the income on which the AO has imposed the concealment penalty. In the concluding paragraph, the AO has held that the assessee has evaded the tax by filing inaccurate particulars and thus worked out the penalty of Rs.3,12,425/-. The same was challenged. 11. Learned CIT(A) has deleted the penalty in the following manner: "I have considered the facts of the case; penalty order and appellant's written submission. Assessing officer levied penalty on addition made in normal computation and also on addition of deferred tax liablility made under Section 115 JB. Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 30/04/2007 has been placed according to which in quantum appeal a relief of Rs.1.6,77,152/- was granted, hence, leaving behind the net taxable income only at of Rs.2,62,667/- against which there was brought forward depreciation of Rs.7,37,850/-, hence, the revised total income remained at NIL. It has also been brought to our notice that while filing the return u/s.153A of the I.T. Act, the book profit u/s.115JA was disclosed at Rs. 16,28,110/- and the tax was accordingly paid. On account of these undisputed information, the case before us is directly covered by the aforecited decision that in such circumstances the concealment of Income would have no role to play once the income is assessed on the book profit u/s.115JA and not under the normal provisions of the Act. Resultantly, we hereby affirm the findings of the learned CIT(A) and reject the ground of the Revenue." 11.3 Respectfully following these decisions and also considering the totality of the facts and circumstances, we hereby affirm the findings of learned CIT(A). We hereby hold that there was no valid reason for imposing the concealment penalty on this assessee. We find no force in the ground of the Revenue, hence h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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