TMI Blog1993 (3) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rs. 24,46,340) and unabsorbed investment allowance (Rs. 46,217) were also allowed to be carried forward to the subsequent assessment years. Subsequently a notice under s. 148 was issued because the Assessing Officer was of the view that the provisions of s. 43B were applicable in respect of unpaid liability relating to luxury tax. The reassessment order was passed on 25th Nov., 1991. The luxury tax collected during the year was Rs. 9,52,858 and luxury tax paid came to Rs. 5,88,783 leaving unpaid luxury tax of Rs. 3,64,075. The assessee had maintained separate luxury tax account and the credit balance to the above extent in said account was taken directly to the balance-sheet and not to P L account. This amount formed part of current year' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of those items. For asst. yr. 1989-90 he held that the tax on the above item of Rs. 3,64,075 would work out to Rs. 2,16,260. He levied penalty of 200% of the said tax which came to Rs. 4,32,520. For asst. yr. 1990-91 he held that the tax on Rs. 5,15,875 (Rs. 1,38,830 plus Rs. 3,77,045) would come to Rs. 3,06,429. He levied penalty of 200% amounting to Rs. 6,12,858. These penalties were confirmed by the CIT(A) and the assessee is now in further appeals before the Tribunal. 5. The submission on behalf of the assessee is that the assessee was under bona fide belief that difference between the luxury tax collected and luxury tax paid did not represent the income of the assessee of the year under consideration and it was for that reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had not filed any appeal against assessment order which indicated the assessee's admission that the said amount represented income of the assessee. Similar argument was made in respect of the cash credits for the second year. Reliance was placed on the decisions in the cases of CIT vs. Dr. R.C. Gupta Co. (1980) 15 CTR (Raj) 23 : (1980) 122 ITR 567 (Raj) and R.V. Venugopal Chettiar vs. CIT (1985) 153 ITR 376 (Mad). It was further submitted that the assessee had not raised plea either before the ITO or before the CIT(A) to the effect that the cash credits were of the earlier years and hence the said plea should not be allowed to be raised before the Tribunal. 8. As regards the submission of the assessee that there should not be any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that there was any concealment as far as the amounts representing difference between the collections and payments of luxury tax were concerned. 10. As regards the cash credits, those credits are from the directors of the company who had made advances without payment of interest. These directors had signed accounts and had confirmed in the audited accounts given to the IT Department and also with the Registrar of Companies. Consequently no further confirmation was required. Merely because these amounts were added in the assessment proceedings, would not mean that they represented income of the assessee. The assessee has filed revision petition under s. 264 of the Act before the CIT in the quantum matter and the said revision peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar as Benches of the Tribunal at Ahmedabad are concerned, consistent view in the recent period is in favour of assessee. One of the recent decisions of Ahmedabad Bench of the Tribunal has been cited on behalf of the assessee and that decision is in the case of H.T. Power Structure Pvt. Ltd. in ITA No. 4778/Ahd/1991 dt. 10th Feb., 1993. In that decision the conflicting decisions have been noted and Expln. 4 to s. 271(1)(c) on which the Department has placed strong reliance, has been considered in detail and it has been held that nothing in said Explanation would justify levy of penalty under s. 271(1)(c) when the finally assessed amount is a loss. The Tribunal has observed as follows in said decision: "This phraseology of Expln. 4 also en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbit a case where no tax is leviable at all. This constitutes yet another reason for a very strict construction being placed on this provision of Expln. 4. Viewed in this light it would be very difficult to accept the Department's contention that in cl. (5) of Expln. 4 below s. 271(1) the total income assessed should take into its ambit a case where assessment has resulted in a loss. Here, we are not concerned with a case in which part of the concealed income gets adjusted against other items of loss or deficiency and the assessment results in computation of a positive figure of total income albeit much smaller than the concealed income as was the case before the Hon'ble Kerala High Court in CIT vs. India Sea Foods (1976) 105 ITR 708 (Ker). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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