TMI Blog2016 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of tax sought to be evaded, as there is no evasion of any tax liability - Decided in favour of assessee - I. T. A. No. 941/JP/2013 - - - Dated:- 30-9-2015 - T. R. Meena (Accountant Member) And Laliet Kumar (Judicial Member) For the Petitioner : Rajeev Sogani For the Respondent : O. P. Bhateja ORDER Laliet Kumar (Judicial Member) 1. This appeal is by the assessee arising out of the order passed by the learned Commissioner of Income-tax (Appeals)-II, Jaipur on September 5, 2013 in relation to the assessment year 2005-06. The only effective ground raised in the appeal is as under : In the facts and circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) has erred in confirming the action of the learned Assessing Officer in imposing penalty under section 271(1)(c) of the Income-tax Act, 1961 amounting to ₹ 8,50,287. The action of the learned Commissioner of Income-tax (Appeals) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the penalty of ₹ 8,50,287 imposed under section 271(1)(c). 2. The assessee is a public limited listed company. Durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 5. Against the assessment order passed by the Assessing Officer, the appeal was filed by the assessee before the learned Commissioner of Income-tax (Appeals)-II, Jaipur on January 9, 2008 only on the following two grounds : (a) The learned Assessing Officer has erred in the facts and circumstances of the case to reject the common expenses dividing ratio of 20 : 80 applied by the company and arbitrarily applied the ratio of 37.5 : 62.5, while dividing the common expenses of ₹ 1,03,53,632 between tax exempt income (software exports) and tax payable income (learning solutions). The action of the learned Assessing Officer is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the order being illegal and without the authority of law. (b) The learned Assessing Officer has erred in the facts and circumstances of the case by disallowing the depreciation of ₹ 56,58,923 claimed by the appellant-company on the windmill treating separate cost centres/ break up without basis, contrary to the suppliers' invoice for the windmill. The action of the learned Assessing Officer is illegal, unjustified, arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not allowable under the provisions of the Income-tax Act and therefore by making such claim ; the appellant has reduced its taxable income and in effect furnished inac curate particulars of income. Such capital loss can never be claimed as per the provisions of section 94(7) and therefore by making such claim in the return of income, the appellant has definitely concealed the income and furnished inaccurate particulars of income. The appellant relied upon certain decisions including decision of Supreme Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC). In all these decisions, penalty was levied on disallowance of revenue expense claimed by the appellant. It was held that disallowance of expense will not automatically result in levy of penalty. However what was claimed by the appellant is not a revenue expense or loss on revenue account. It was a capital loss not allowable under section 94(7) of the Act and therefore by making such claim, the appellant cannot get the benefit of these decisions. In the case of CIT v. Zoom Communication P. Ltd. reported in [2010] 327 ITR 510 (Delhi), the Delhi High Court held that if any assessee makes patently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f normal computation. The assessee placed reliance on judgment in the case of CIT v. Nalwa Sons Investments Ltd. [2010] 327 ITR 543 (Delhi) and Unison Hotels Ltd. v. Deputy CIT [2013] 40 taxmann.com 237 (Delhi). 14. Per contra, the learned Departmental representative submits that merely because the assessee complied with the procedural requirement of filing the prescribed form and certificate (3C and 3D), it cannot be absolved of its liability. The act of the assessee in not setting off the dividend earned against the short-term capital loss within the provisions of section 94(7) was not bona fide. It was also submitted by the learned Departmental representative that the assessee is a public limited listed company and is advised by the professionals for the purpose of filing the return of income. It was further submitted that whenever any amendment or new provision is introduced in the Income-tax Act, lot of discussion took place among the professionals and corporate circles. Though the Income-tax Act is a little complicated and complex Act but it is not expected from the assessee- company which is professionally managed and which take help from the professional that such an imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 115JB and not under normal provision, the penalty under section 271(1)(c) is not leviable, as the levy of penalty is dependent upon the tax sought to be evaded. Paras 21 and 24 dealing with the abovesaid issue in the Nalwa Sons Investments Ltd. (supra) held below (pages 552, 553) : 21. The question, however, in the present case, would be, as to whether furnishing of such wrong particulars had any effect on the amount of tax sought to be evaded. Under the scheme of the Act, the total income of the 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 appellant in terms of section 115JB of the Act. 24. The income of the assessee was thus assessed under section 115JB and not under the normal provisions. It is in this context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 013 wherein in para 7 has held as under : 7. Learned counsel for the appellant has relied upon the decision of the Supreme Court in Price Water House Coopers (P) Ltd. v. CIT [2012] 348 ITR 306 (SC) ; [2012] 211 Taxman 40; [2012] 25 tax mann.com 400, but we need not examine the said aspect as the appellant is entitled to succeed in view of the decision of the Delhi High Court in CIT v. Nalwa Sons Investments Ltd. [2010] 327 ITR 543 (Delhi) ; [2010] 194 Taxman 387 wherein it has been held that when taxable income is computed on book profits under section 115JB and not under the normal provisions, Explanation (4) has to be accordingly applied. In view of the said Explanation, the additions made by the Assessing Officer under the normal provisions are totally irrelevant. Thus, there cannot be imposition of penalty under section 271(1)(c) of the Act for addition made under the normal provisions. 20. In the light of the above discussion, there is no merit in the submissions of the learned Departmental representative. Therefore, the same is also dismissed. 21. In the result, the assessee's appeal is allowed. 22. The order pronounced in the open court on September 30, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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