2013 (10) TMI 1391

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....ogether. We therefore proceed with the facts of A.Y. 05-06. 3. The facts as culled out from the order of lower authorities are as under: 4. Assessee is a company engaged in the business of manufacturing of Ceramic Tiles. Assessee filed its return of income for A.Y. 05-06 on 29.10.2005 declaring total income at Rs. Nil after claiming deduction under Section 80IB of the Act. Assessment was framed under Section 143(3) vide order dated 27.07.2007 wherein additions to the extent of Rs. 46,78,545/- was made but however the taxable income after allowing deduction under 80IB remained Nil. Tax was accordingly worked out on book profits under section 115JB. The addition of Rs. 46,03,545/- made on account of unaccounted sales was considered for ....

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..... 16,51,520/- levied u/s 271(1)(c) of the Income Tax Act, 1961 by the Assessing Officer. 6. The Assessee has later on raised the additional ground which reads as under:- 1. The learned Assessing Officer has levied penalty of Rs. 16,51,520/- u/s. 271(1)(c) holding that the appellant had concealed income as per the computation of regular income though the income is actually assessed u/s. 115JB of the Act accepting the returned income. Both the grounds are interconnected and therefore same are considered together. 7. Before us, the learned A.R. submitted that the entire profits of the Assessee is eligible for deduction under 80IB of the Act and that even after the additions made during the course of assessment proceedings, the taxa....

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....cedure was less than the income determined by legal fiction namely, book profit under section 115JB, and thus income was assessee under section 115JB and not under the normal provisions- Though there was concealment, it had repercussion only when assessment was made under the normal procedure- Assessment as per the normal procedure was not acted upon- It is the deemed income under section 115JB which has become the basis of the assessment- Thus tax was paid on the income assessed under section 115JB-Therefore, the concealment did not lead to tax evasion at all and penalty under section 271(1)(c) could not be imposed in respect of the false claim of depreciation." 10. Before us, the Revenue could not bring any contrary decision in its sup....