AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 52
X X X X Extracts X X X X
X X X X Extracts X X X X
....imited listed company. During the year under consideration 2005-06 the assessee has shown business income from export of computer software, selling learning solutions and power generation. The assessee has filed its original return of income on October 30, 2005 declaring income at nil and paid tax on minimum alternate tax. The book profit has been shown at Rs. 3,84,87,419, The case was selected for scrutiny. Notice under section 143(2) was issued to the assessee on May 19, 2006. The Assessing Officer while going through computation sheet has come across that the assessee has suffered short-term capital loss at one hand and has received dividend income at the other hand. The Assessing Officer vide query letter dated June 25, 2007 asked the assessee to explain as to whether the provisions of section 94(7) pertaining to dividend stripping were applicable in its case or not. In reply to the notice dated June 25, 2007, the learned authorised representative of the assessee vide letter dated November 27, 2007 submitted the details of capital loss to be disallowed under section 94(7), We would like to reproduce the relevant para of the reply dated November 27, 2007 hereinbelow : "Details....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... against the facts of the case. Relief may please be granted by quashing the order being illegal and without the authority of law. Beside the abovesaid grounds the order of the Assessing Officer, no other grounds was urged before the Commissioner of Income-tax. However, the learned authorised representative had not pressed both grounds and, therefore, the order passed by the Assessing Officer had attained finality. 6. Thereafter the Assessing Officer had issued show-cause notice on March 10, 2011 asking the assessee as to why the penalty under section 271(1)(c) be not levied in its case, in term of assessment order. In response thereto, the learned authorised representative of the assessee filed reply on March 18, 2011. However, the Assessing Officer was not convinced with the reply given by the assessee and he imposed penalty amounting to Rs. 8,50,287 being 100 per cent. of the tax sought to be evaded in the concluding para of the penalty order the Assessing Officer mentioned as under : In view of the above discussion, the abovesaid income of Rs. 23,23,664 held as concealed income of the assessee and penalty under section 271(1)(c) is imposed as under : (Rs.) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....laims knowing that it will not be allowed in scrutiny which is done only in 2 per cent. cases. The decision of the Delhi High Court has also considered apex court decision relied upon by the appellant. Considering this I am of the clear opinion that the appellant has concealed income and furnished inaccurate particulars of income by making claim of capital loss clearly not allowable under section 94(7) and also contesting the addition before the Commissioner of Income- tax (Appeals). Accordingly penalty levied by the Assessing Officer on this addition is confirmed." 8. Before us, learned counsel for the assessee has raised multiple defences. 9. That for the assessment year 2005-06 the form meant for filing the return of income did not contain column required for giving the particulars in respect of dividend stripping under section 94(7) or 94(8). 10. The assessee also contended that the particular column under capital gain was introduced for the first time in Form ITR-6 for the assessment year 2007-08 and that the column meant for the disclosure was as under : (d) Loss if any to be ignored under section 94(7) or 94(8). 11. It was also contended that even for the purpose of fur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m and Forms 3C and 3D, the assessee will not comply the provisions of section 94(7). 15. The learned Departmental representative for the Revenue has submitted that the bona fides are to be shown by the assessee and it cannot be assumed. The learned Departmental representative relied upon the judgment in the matter of CIT v. Zoom Communication P. Ltd. reported in [2010] 327 ITR 510 (Delhi) ; [2010] 191 Taxman 179 (Delhi), CIT v. HCIL Kalindee Arsspl [2013] 37 taxmann.com 347 (Delhi) and Mahindra Intertrade Ltd. v. Deputy CIT [2011] 16 taxmann.com 77 (Mum-Trib). The learned Departmental representative emphasised on para 8 of the CIT v. HCIL Kalindee Arsspl [2013] 37 taxmann.com 347 (Delhi) and has submitted that there is also wilful submission of inaccurate particulars by the assessee, therefore the penalty is required to be imposed on the assessee. 16. We have heard the rival contentions and have perused the material available on record. It is an admitted case that the assessee was taxed under section 115JB of the Income-tax Act, on the basis of book profit and was not taxed under normal computation procedure. Had the normal provision been applied, no tax was leviable on the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tax Act. If the assessee was to be assessed under normal provisions of the Act, there is no tax liability. The Assessing Officer while computing the tax liability has given the calculation under normal provisions of law as well as under minimum alternate tax. From the perusal of order it is crystal clear that the failure on the part of the assessee to give effect to section 94(7) has no bearing on the payment of tax to be paid, therefore no penalty can be imposed on the basis of tax sought to be evaded, as there is no evasion of any tax liability. Moreover we are bound to follow the judgment of the hon'ble Delhi High Court on this issue and, therefore, we hereby allow the appeal of the assessee and set aside the order passed by the Assessing Officer and the Commissioner of Income-tax (Appeals) on imposition of the penalty. 18. We will be failing in our duty if we do not discuss the judgment cited by the learned Departmental representative for the Revenue. The judgments of CIT v. Zoom Communication P. Ltd. [2010] 327 ITR 510 (Delhi), CIT v. HCIL Kalindee Arsspl [2013] 37 taxmann.com 347 (Delhi) and Mahindra Intertrade Ltd. v. Deputy CIT [2011] 16 taxmann.com 77 (Mum-Trib) were ....