AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 1633
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.... penalty levied u/s. 271(1)(c) of Rs. 2,34,05,562/-". Ground No. 2 is general in nature. 2. Briefly stated, assessee-company is engaged in the business of manufacture of rectified spirit. It has filed its return of income for the A.Y. 2010-11 on 15-10-2010 declaring loss of Rs. 47,00,309/- under normal provisions of the Act and under MAT provisions of Section 115JB of the act, book loss of Rs. 36,54,039/- was reflected. The assessment u/s 143(3) was completed on 28-01-2013 at loss of Rs. 39,01,674/- as against the loss declared by assessee at Rs. 47,00,309/- under normal provisions of the Act making an addition of Rs. 7,98,545/- being disallowance u/s 14A of the Act and further an addition of Rs. 7,72,20,000/- was made for the purpose....
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.... After making this adjustment, assessee in its computation statement of total income has reflected book loss at Rs. 36,54,039/-. In fact, the profit before taxes as per P&L Account was Rs. 7,86,75,335/- and the admissible adjustments as per the provisions of Section 115JB are only certain inadmissible expenses to the tune of Rs. 6,95,536/- and dividend received of Rs. 58,12,500/-, which are included in the P&L Account. Since assessee made a claim for deduction in computation of book profits u/s. 115JB of the Act in contravention of provisions specified in the said provision, the claim of assessee for deduction was rejected and was included for the purpose of computing book profits u/s 115JB of the Act. 3. Assessee accepted the disallowan....
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.... was not permissible under the provisions of Section 115JB of the Act. 5.1 I also find that the appellant filed all the information before the Assessing Officer along with the return of income, regarding the claim of expenditure under each head, revenues to the company and all other particulars on the basis of which the A.O. had rejected the claims of the appellant, disallowing Rs. 7,98,545 u/s 14A and Rs. 7,72,20,000 u/s 115JB of the Act (which was not included by the appellant for the purpose of computing the book profits u/s 115JB of the Act). Therefore, this is a case of rejection of the claim and the decision of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products (P) Ltd., reported in 322 ITR 158 is sq....
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....f India Ltd vs. Asst CST 124 ITR 15 (1980), it has been observed that observed that; " where the assessee does not include a particular item under a bona fide belief that he is not liable so to include it, it would not be right to condemn the return as a false' return inviting imposition of penalty." (iv) In Hindustan Steel Ltd vs. State of Orissa 83 ITR 26 (1972), it has been has observed that: "the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute." (v) The Hyder....
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....allowance of claims does not warrant penalty. 7. There was no paper book filed and neither assessee nor DR has placed the annual report, computation of income, explanation stated to have been filed before the AO on record. It was informed that assessee preferred a writ petition which was withdrawn, before accepting the assessment order of AO. No such petition or order of Hon'ble High Court was placed on record. 8. After considering the rival contentions and perusing the order of AO and CIT(A), we are not persuaded to accept either of the orders of the authorities. As noticed, the AO has not considered the explanation of assessee (stated to have filed only on 31-07-2013) nor Ld.CIT(A) referred to it in his order. It was also notice....