TMI Blog2018 (6) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... o be a reserve. Further, it is clear that such amount set aside towards debentures redemption is not an unascertained liability. Ground of appeal is accordingly allowed Penalty u/s.271(1)(c) - write back of provision for contingencies of 24,60,00,000/- in computing' the Book Profits under Section 115JB - Held that:- Assessee had furnished all the details of its expenditure as well as Income In Its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on Its part. It was up to did authorities to accept its claim in the return pinot. Merely because the assessee had claimed the expenditure, which claim not accepted or was not acceptable to the revenue, that, by itself, would not attract the penalty under section 271(1)(c). If the contention of the revenue was accepted, then in case of every return where the claim 'made was not accepted by the Assessing Officer for any reason, the assessee would invite penalty under section 271(1)(c), That is clearly not the Intendment of the Legislature - Decided against revenue - ITA Nos.185 to 187/Ran/2016, C.O. Nos.10 & 11/Ran/16 - - - Dated:- 28-6-2018 - Shri N. S Saini, Accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.115JA. Provision for wealth tax : 16,05,868/- Foxed asset written off as per books : 98,896/- Loss on sale of fixed assets : 7,43,478/- Provision for contingencies : 1,80,00,000/- Int. On income tax refund : 8,94,204/- Income from investment : 53,41,911/- Profit from transfer of undertaking : 17,72,64,686/- Profit on sale of investment : 19,08,202 Total: Rs.20,48,57,245/- Further commercial vehicles costing ₹ 70,76,556/- and put to use in the business for less than 180 days during the previous year relevant to A.Y. 1999-2000, the assessee was entitled for depreciation @ 20% (50% of prescribed rate of 40%). Since no details and supporting evidences are available on record, I have reason to believe that non-inclusion of the above amount resulted in the short computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unascertained liability. Ground of appeal is accordingly allowed. 11. Before us, ld D.R. supported the order of the Assessing Officer. 12. We find that ld D.R. could not point out any specific error in the order of the CIT(A), which was passed following the order of the Tribunal in the case of assessee itself for the assessment year 2003-04. The revenue has brought no material on record to show that the order of the Tribunal was either not applicable in the instant case or the said order was varied by any higher authority. In absence of any such material, we do not find any reason to interfere with the order of the CIT(A). Therefore, the ground of revenue for both the assessment year is dismissed. ITA No. 187/Ran/2016: A.Y. 2002-03 13. The revenue in its appeal for the assessment year 2002-03, the assessee is aggrieved by the deletion of ₹ 94,07,400/- imposed u/s.271(1)(c) of the Act 14. The brief facts of the case are that the assessee is a widely held domestic company engaged in the business of inter alia, manufacture and sale of jelly filled telecommunication cables, wire ropes billets, etc. For the assessment year under consideration, the assessee had fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , offered to tax in earlier years), the write back of provision in the current Assessment Year was reduced while computing the book profits. However, the said claim of the Appellant was not allowed by the Learned Assessing Officer in the assessment order issued under Section 143(3) of the Income Tax Act, 1961: [11] in this regard, the Hon ble ITAT vide its order dated 30th June, 2d09 had restored the matter back to the file of the Learned Assessing Officer for fresh adjudication. Further, the Learned Assessing Officer vide its order dated 20th May, 2010 decided the issue in favour of the appellant and upheld the argument of the appellant that the amount of provision was already offered to tax in earlier Assessment Years. The Learned Assessing Officer, in the aforesaid order for Assessment Year- 2002-03 also relied on the assessment order issued under Section 143(3) of the Income Tax Act, 1961 for Assessment Year-2004-05 wherein the Learned Assessing Officer has accepted the reduction on account of write back of provision for contingencies amounting to Z2,70,00,000/- while computing the book profits. [12] With regard to the debenture redemption reserve of ₹ 6,71,50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed as income under section 115JA of the Act. Therefore, the Hon'ble Mumbai ITAT held that Capital Gains arising to the Appellant under section 50 of the Act on a depreciable asset is liable to be excluded from deemed profits under section 115JA of the Act. Relying on the said judgment, it was inferred by the appellant that the profit on sale of fixed asset was liable to be excluded in computing book profit under section 115JB of the Act. The appellant under a bona fide belief had claimed exclusion of capital profit in computing book profit under section 115JB of the Act. [16] Regarding the assertion of the Ld. Assessing Officer in the order under section 271(1)(c) of the Income Tax Act, 1961, that the appellant had consciously and deliberately refused to take into consideration the judgment of the Apex Court in the case of Apollo Tyres Ltd. vs CIT (2002) 255 ITR 273 (SC) it was submitted, without prejudice, that in another case of Frigsales (Indio) Ltd. (Supra), the Hon'ble Mumbai ITAT had decided the issue of exclusion of profit on sale of fixed assets from the computation of book profit under section 115JA of the Act, only after distinguishing the Apex Court judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available before the date of thin of return. [19] It is an admitted position that the appellant had made elaborate disclosures on its notes to the computation of MAT liability providing the basis (along with relevant judicial- pronouncements) on which the sale profits were reduced in computing the book profits. The said disclosure was also made in the Form No.29B, certifying the computation of MAT liability. The question is whether under suchconditions penalty u/s.271(1)(c) could be levied. [20] The expression 'concealment of income' implies that incomes and particulars thereof is/are being hidden, camouflaged or covered up so as it cannot be seen, fc4incl, observed or discovered. The expression furnishing of inaccurate particulars of income' implies furnishing of details or information about income, which are not in conformity with the facts as per the truth. [21] The above disclosures made by the appellant and other disclosures in the financial statements dearly indicate that the appellant has neither concealed any particulars of its income/profit nor furnished any inaccurate particulars thereof. [22] In the case of T Ashok Pal vs CIT (2007) 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or notice; hiding. Further, 'Concealment' is an affirmative act far intended or known to be likely to keep another from learning, of a fact which he would otherwise have learned. Such affirmative action is always equivalent to a misrepresentation... [25) Based on the above judicial pronouncements and dictionary meanings of the word 'conceal' and 'deliberate, it may be concluded that for (deliberate) concealment of income, there should have been 'hiding of income or profit' or 'keeping of secret' some particulars that resulted in income or profit being 'concealed'. [26] Further, In the case of CIT vs Mussadilal Ram Bharose (1987) 165 ITR 14 (SC), the apex court has held that it is for the fact-finding body to judge the relevance and sufficiency of the materials. If such a factfinding body comes to the conclusion that tide assessee has discharged the onus, it becomes a conclusion of fact. However, in the present case, the Assessing Officer has nowhere concluded that the relevant materials placed by the appellant, were insufficient. In fact, the Assessing Officer has accepted the facts and materials placed by pot rejecting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hown that the conditions under section 271(1)(c ) exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed, because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. [Para 81 The word 'particulars' must mean the details supplied in the return, which are not accurate, not exact or correct not according to truth or erroneous, In the instant case, there was no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under section 271(1)(c). A mere making of the claim, which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the Inaccurate particular. [Para 9] The revenue contended that since the assessee had claimed excessive deductions knowing that they were incorrect it amounted to concealment of income. It was argued that the falsehood in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of tax sought to be evaded for situations even where the income determined under the general provisions is less than the income declared for the purpose of MAT u/s 115JB of the Act. The substituted Explanation 4 is applicable prospectively w.e.f. 01.04.2016. 5. Accordingly, in view of the Delhi High Court judgment and substitution of Explanation 4 of section 271 of the Act with prospective effect, it is now a settled position that prior to 1/4/2016, where the income tax payable on the total income as computed under the normal provisions of the Act is less than the tax payable on the book profits u/s 115JB of the Act, then penalty under 271(1)(c) of the Act, is not attracted with reference to additions /disallowances made under normal provisions. It is further clarified that in cases prior to 1.4.2016, if any adjustment is made in the income computed for the purpose of MAT, then the levy of penalty u/s 271(1)(c) of the Act, will depend on the nature of adjustment. 6. The above settled position is to be followed in respect of section 115JC of the Act also. 7. Accordingly, the Board hereby directs that no appeals may henceforth be filed on this ground and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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