TaxTMI 
TaxTMI 
2011 (1) TMI 171
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....2. In both these appeals the assessee has challenged the order of the learned CIT (Appeals) where by the learned CIT (Appeals) confirmed the order of the AO imposing penalty on assessee u/s. 271 (1) (c) of the Act. The facts and circumstances under which penalty was imposed on the assessee by the AO are as follows :- 3. The assessee is a company engaged in the business of coal rolling manufacturing. There was a search and seizure operation u/s. 132 of the Income Tax Act, 1961 (the Act) carried out by the department in the business premises of the assessee on 17.11.2005. In the course of search, statements of directors were recorded. Based on the incriminating documents found in the course of search, the assessee had through its di....
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....d- Addl. Income towards loose paper no.47, 48,52,53 & 56 of Annexure A-15 Rs.2,84,00,000/- Rs.2,84,00,000/- Less: Set off of b/f losses Rs.4,21,55,790/- Rs.6,47,43,644/- Rs.6,47,43,644/- Total Income Rs. NIL Rs.58,12,150/- Rs.58,12,150/- Book Profit u/s.115JB Rs.2,93,91,564/- Rs.2,93,91,564/- Rs.2,93,91,564/- 4. In respect to the income disclosed by the assessee in return of income filed after the search towards loose papers found in the course of search, the AO initiated penalty proceedings u/s. 271 (1) (c) of the act and also imposed penalty by holding that the assessee concealed particulars of income. On appeal by the assessee, the learned CIT (Appeals) confirmed the order of the AO.....
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....hout appreciating aforesaid facts and without any positive proof of concealment against the appellant at 100% of the tax sought to be evaded is very excessive, arbitrary, unjustified, improper, bad in law and deserves to be quashed. 2. The appellant further craves leave to add, alter and/or to amend the aforesaid grounds of appeal as and when required." 5. Though submissions were made on the applicability of explanation-5 to Sec.271(1)(c) of the Act, and also general submissions with regard to imposing of penalty, we deem it appropriate for taking up for consideration Ground (c). 6. As already stated the income of the assessee was ultimately determined as per the provision of section 115 JB of the Act and not a....
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....such income is compared with the prescribed percentage of the 'book profits' computed under section 115JB. The higher of the two amounts is regarded as total income and tax is payable with reference to such 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 assessee in terms of section 115JB. In the instant case, the income computed as per the normal procedure was less than the income determined by legal fiction, namely, 'book profits' under section 115 JB[Para 22] The income of the assessee was, thus assessed under section 115 JB and not under the normal provisions. It was in that context that the application of Ex....