TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 591
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....ed that assessee has not provided any calculation of book profit u/s 115JB of the Act as the assessee was of the view that income from capital gain at Rs. 8,52,63,544/- which is exempted from tax u/s 10(38) of the Act is not includible in the book profit. Accordingly, ld. Assessing Officer calculated book profit of Rs. 9,87,99,99,018/-. Penalty proceedings u/s 271(1)(c) of the Act were initiated. No appeal against quantum addition was filed by assessee before ld. CIT(A). 3. During penalty proceedings u/s 271(1)(c) of the Act assessee made various arguments but the same were brushed aside by ld. Assessing Officer and penalty u/s 271(1)(c) of the Act was imposed at Rs. 98,79,990/- for not offering correct MAT on the book profit u/s 115JB of the Act and also imposed penalty of Rs. 4,63,247/- for nonsubmission of explanation for claiming expenditure of Rs. 13,24,563/- claimed against exempt dividend income and income from house property. 4. Aggrieved, assessee went in appeal before ld. CIT(A) but could not succeed. 5. Assessee is now in appeal before the Tribunal, against penalty imposed u/s 271(1)(c) of the Act at Rs. 98,79,990/- and Rs. 4,63,247/- raising following grounds :- 1.....
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....ant craves leave to add, amend and/or alter the ground or grounds of appeal either before or at the time of hearing of the appeal. 6. Ground no.1 is of general nature, which needs no adjudication. 7. Ground no.2 reads as under :- 2. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in .upholding the order levying penalty of Rs. 98,79,990 u/s. 271(1)(c) on the ground that the appellant was guilty of concealment of income inasmuch as it had failed to show in its return the total income pursuance to Section 115JB and instead, merely returned total income as per the normal provisions of the Income-tax Act, 1961. The same may be deleted for the reasons stated in the Synopsis attached herewith. It was contended by ld. Authorised Representative (AR) that assessee company has provided all the necessary material facts and information and the return of income accompanied with documents, audit reports which included the income earned by assessee by way of long term capital gain. Assessee did not commit any default as contemplated u/s 271(1)(c) of the Act as neither any income was concealed nor any inaccurate particulars of incom....
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....) of the Act by treating assessee as guilty of concealment of particulars of income as it failed to show calculation of income u/s 115JB of the Act and pay MAT. 9.1 From going through the records and paper book we find that assessee is a limited company incorporated on 17.01.1986 and regularly assessed to tax. During the year under appeal assessee earned long term capital gain of Rs. 8.53 crores (approx.) and exemption u/s 10(38) of the Act was claimed. As per the provisions of section 115JB of the Act this sum of Rs. 8.53 crores is required to form part of the book profits for the purpose of calculating Minimum Alternate Tax (MAT). However, assessee has claimed exemption u/s 10(38) of the Act but did not file any detail of calculating deemed income u/s 115JB of the Act. More so assessee also did not adher to the statutory requirements of filing of form 29B duly certified by Chartered Accountant, required for calculating book profit u/s 115JB of the Act and MAT so as to pay the higher of normal tax or MAT. 9.2 We further observe that ld. counsel has heavily relied on the judgment of Hon.Punjab & Haryana High Court in the case of CIT vs. Stock Home India Ltd. wherein Hon'ble Court....
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....o be inaccurate. Thus, ld. CIT(A) has rightly held that it cannot be said that assessee had concealed particulars of income or furnished inaccurate particulars thereof In the case of CIT v. Reliance Petro Products (P) Lid. (supra] followed by the ld. CIT(A) it has been held that furnishing of inaccurate particulars mean details specified in return which are not exact or correct, not according to truth or erroneous and if the assessee furnishes details of income and expenditure in its return which details in themselves are not found to be inaccurate which cannot be said that assessee has concealed particulars of income or furnished inaccurate particulars merely because in relation to those particulars as claim for deduction is made which is not accepted. We thus do not find infirmity in the first appellate order on the issue. The same is upheld. The ground is accordingly rejected." 6. It was not disputed that vide Finance Act, 2006 proviso was inserted in Section 10(38) of the Act w.e.f. 1.4.2007 and prior to the insertion of the aforesaid proviso under Section 10(38) of the Act. the long time capital gains on shares was not required to be included while determining the book prof....
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....rse of assessment proceedings. For this very reason the facts of the case of assessee are different to those of the judgment relied on by the assessee in the case of CIT vs. Stock Home India Ltd. (supra). 11. It is true that details of long term capital gain were forming part of the audited financial statements but one has to take cognizance of the fact that these details calls for verification only when the case is selected for scrutiny assessment and the necessary details are examined by the Assessing Officer. Certainly if the case of assessee has not been scrutinized then this error committed by the assessee could not have been examined and there would certainly have been loss of revenue to that effect. We are surprised to observe that on one hand assessee is accepting the error committed by it and on the other hand it has not taken any pain to revise the return and to comply with the statutory requirements of filing form 29B r.w.s. 115JB of the Act which clearly raises doubt about its bona fideness. 12. We further observe that in the penalty order u/s 271(1)(c) of the Act ld. Assessing Officer has observed that assessee in its return filed for Asst. Year 2005-06 and 2006-07 h....
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....its MAT income. This particular attitude of assessee is enough to prove that the assessee has not committed any mistake but meaningfully avoided showing income u/s. 115JB of the IT Act. 13. We further observe that ld. CIT(A) has also confirmed the penalty by observing that the appellant company had furnished inaccurate particulars of its income by making incorrect claim/exemption and it understated its income and concealed the particulars of income by not paying MAT on the deemed income i.e. book profit u/s 115JB of the Act. 14. We are, therefore, of the view that in totality of facts and circumstances of the case, observation made by the lower authorities and discussions made by us in the preceding paragraphs, the assessee has concealed particulars of income by allegedly not calculating MAT u/s 115JB which in the case of assessee was higher than the normal taxes; as the long term capital gain exempted u/s 10(38) of the Act is required to be added in the book profits for the purpose of calculating MAT. Assessee is also guilty for the fact that it was well aware of the provisions of section 115JB of the Act as it has been consistently furnishing details of the same in the previou....
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....filed by assessee. Penalty proceedings u/s 271(1)(c) of the Act were initiated and by way of penalty order dated 20.5.2010, imposed penalty at Rs. 463,247/- which was further confirmed by ld. CIT(A). 17. Aggrieved, assessee is now in appeal before the Tribunal. Ld. AR referring to the audited financial statements and profit and loss account as well as computation of income submitted that ld. Assessing Officer erred in observing that assessee had no income under the head "profit and gains of business " by completely ignoring the fact that assessee has shown positive income of Rs. 2,06,595/- as business income. Further expenses claimed by assessee are of general administrative nature incurred in meeting out day to day expenses and to run the office of the company. It is needless to mention that assessee is a limited company being incorporated for running business and during the year apart from share, dividend, rent income and interest income assessee had other income also. Further there is no dispute about the genuineness of the expenditure incurred by the assessee. As there is no concealment of particulars of income no penalty u/s 271(1)(c) of the Act should have been imposed by th....