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Elpro International Ltd Versus DCIT

2015 (5) TMI 513 - ITAT MUMBAI

Penalty u/s 271(1)(c) - furnished wrong particulars of its income in terms of profits u/s 115JB - Computation of Minimum Alternate Tax (MAT) - Held that:- During the original assessment proceedings, obviously the appellant had furnished wrong particulars of its income in terms of profits u/s 115JB of the Act. Even during the course of reassessment proceedings, the appellant did not explain/clarify such facts and figures, as nobody attended on behalf of the appellant. Similarly, during the penalt .....

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ng the reassessment proceedings. It is only on account of the reopening of the assessment that correct income of the appellant has been assessed. Thus the computation of book profit under section 115JB on the part of the appellant was inaccurate. The he case of the appellant is fully covered by clause (A) of the above Explanation-1 to section 271 (1)(c) - Decided against assessee. - ITA NO.6701/Mum/2013 - Dated:- 24-4-2015 - Shri Joginder Singh And Shri B.R. Baskaran JJ. For the Appellant : Nara .....

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concealment of income nor furnishing of inaccurate particulars of income by the assessee. On the other hand, the ld. DR, Shri, N.V. Nadkarni, defended the imposition as well as confirmation of penalty levied u/s 271(1)(c) of the Act. 2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is in the business of manufacture of lighting Arrestors and Varistors. The original assessment was completed on 28/12/2006 determin .....

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stead of loss of ₹ 11,41,05,966/-, wrongly computed by the assessee. The reasons recorded by the Assessing Officer for reopening the assessment have been reproduced at page-2 of the impugned order. As per the Revenue, full and true disclosure of fact was not made by the assessee. There was no response from the assessee to the reassessment proceedings, therefore, order u/s 144 r.w.s. 147 was passed on 29/09/2011 assessing the income under the provision of section 115JB determining the book .....

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It is seen that the appellant, while filing the return of income on 31.10.2004, had declared total loss of ₹ 1,10,55,202/- under the normal provisions of the Act and book loss at ₹ 11,41,05,966/- u/s 115JB of the Act. While declaring the book loss u/s 115JB, the appellant computed the same in the following manner:- Profit/loss as per P& L account before taxation (2,38,92,096/-) Less:- i. The amount withdrawn from reserves or provisions, If any such amount is credited to P & L .....

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ppellant, from which above figures can be deciphered. Further, it is seen that the appellant's P&L account as per its audited books of account is as under: INCOME Schedules Rs. lakhs Sales and services -Gross XV 5732.54 Less: Excise Duty 505.95 Sales and services - Net 5226.59 Other income (Note 19b) XVI 474.47 5701.06 EXPENDITURE Materials XVII 3478.68 Employee costs XVIII 545.30 Depreciation! Amortization V 141.92 Interest XIX 247.77 Other expenses XX 1200.57 5614.24 Profit/(Loss) Befo .....

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/s 115JB of the Act. However, for this computation, the appellant has not followed the provisions of Explanation-1 of the said section wherein the adjustments in respect of book profits have been prescribed. These adjustments are as under: Explanation-1, - for the purposes of this section, "book: profit" means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased bya) the amount of income tax paid or payable, .....

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rovisions contained in clause (38) thereof) or section 11 or section 12 apply; or g) the amount of depreciation, h) the amount of deferred tax and the provision therefore, i)the amount or amounts set aside a provision for diminution in the value of any asset, if any amount referred to in clauses (a) to (i) is debited to the profit and loss account, and as reduced by, - i. the amount withdrawn from any reserve or provisions excluding a reserve created before the 1st day of April, 1997 otherwise t .....

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r iib. the amount withdrawn from revaluation reserve and credited to the profit and loss account, to the extent it is not exceed the amount of depreciation on account of revaluation of assets referred to in clause (iia}; or iii. the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account, Explanation, -………. iv to vi (omitted) vii. …………….. viii. the amount of deferred tax, if any such amount is cr .....

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ead of 'Profit/loss as per P&L account'. Furthermore, it is also seen that the computation is inaccurate. The correct computation of profits u/s 115JB should have been as under: Profit/loss as per P & L account (2,38,92,000) Add: i) Provisions for doubtful loans and advances 1,97,91,000 ii) Provisions for diminution in Value of investments 10,69,25,000 12,67,16,000 10,28,24,000 Less: i) Short/excess provision for tax for earlier years 8,84,42,000 ii) Deferred tax 57,00,000 9,41,4 .....

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ellate proceedings also, the appellant has not furnished complete facts and figures. Hence, it cannot be' concluded that the appellant had filed complete particulars' of its income during the original assessment proceedings, from which the appellant's correct income could have been computed. Neither any explanations/ clarifications were furnished during the reassessment proceedings. It is only on account of the reopening of the assessment that correct income of the appellant has been .....

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) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his income have been disclosed by him, Then the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purpose of clause (c) of this subsection, be deemed to represent the income in respect of which particulars have been concealed. 12. From t .....

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ny stage, either during the original assessment proceedings, reassessment proceedings or during the penalty proceedings. Even during the appellate proceedings, complete facts and figures/explanations have not been furnished: The appellant's case therefore falls under clause (A) of the above Explanation-1 to section 271(1)(c) of the Act. So far as the appellate proceedings are concerned, the appellant's case is covered by both clauses (A) and (B) of the above Explanation-1 to section 271( .....

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ssed. 14. In the result, the appeal of the appellant is dismissed. 2.2. If the observation made in the assessment order/penalty order, leading to imposition of penalty, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, we find that at any stage, the assessee did not furnish any explanation and ultimately the reassessment proceedings/order was passed u/s 144 r.w.s.147 of the Act assessing the .....

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