TaxTMI 
TaxTMI 
2018 (6) TMI 1510
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the facts and in the circumstances of the case, the CIT(A) erred in concluding that the AO was not required to pass a speaking order. 4. That on the facts and in the circumstances of the case, the CIT(A) erred in concluding that the onus on the AO for passing a speaking order, disposing the objections of the appellant company, arises only on filing of return of income in response to notice/s.148 of the I.T.Act. 5. That on the facts and in the circumstances of the case, the CIT(A) erred in not considering the submission of the appellant company dated 22.11.2004 filed in response to notice u/s.148 of the Act." 3. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. The facts of both the years are same and, therefore, assessment year 1999-2000 is taken as lead year for discussion herein-under. 4. The return of income was originally accepted u/s.143(1) of the Act. Originally, no assessment u/s.143(3) was framed. Thereafter, notice u/s.148 was issued after recording the reasons as under: "Assessee filed return of income on 30.12.1999 declaring total loss of Rs. 20,57,01,250/- for the A.Y. 1999-2000. Return was proces....
X X X X Extracts X X X X
X X X X Extracts X X X X
....leted the above addition by observing as under: "vi. Based on a reading of explanation to section 115JA of the Act, the meaning assigned to the term "Reserve" and "Provision" in the Companies Act and the decision of the Supreme Court in the case of National Rayon Corporation Ltd., 227 ITR 764 (SC), it is clear that the amount set aside for the purpose of redemption of debentures, is a known liability to the extent it is not excessive as per the opinion of directors. The same neither falls within the meaning of clause (b) as amounts carried to any reserves by whatever name called, nor within the meaning of clause (c) as amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities. vii. In view of the aforesaid decision of the Apex Court, the amount set aside to redeem debentures must be treated as a known liability and cannot be considered to be a reserve. Further, it is clear that such amount set aside towards debentures redemption is not an unascertained liability. Ground of appeal is accordingly allowed." 11. Before us, ld D.R. supported the order of the Assessing Officer. 12. We find that ld D.R. could not point out any speci....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Income Tax Act, 1961 the appellant submitted that it had created provision for contingencies, to the extent of 27,50,00,000/- in Assessment Year-1998-99 and the same was duly disallowed in the computation of book profits at the time of filing the return of income. The computation of book profits for Assessment Year-1998-99 was submitted. Further, the appellant created another provision for contingencies to the extent of 21,80,00,000/- in 'Assessment Year-1999-00 which was also disallowed in the computation of book profits at the time of filing the return of income. The computation of book profit for Assessment Year- 1999-00 was submitted. [10] The appellant submitted that out of the aforesaid provision cheated in earlier years, the appellant had written back an amount of 24,60,00,000/- in Assessment Year-2002-03. Since, the entire amount of provision for contingencies had already been disallowed in the year of creation of the same (i.e, offered to tax in earlier years), the write back of provision in the current Assessment Year was reduced while computing the book profits. However, the said claim of the Appellant was not allowed by the Learned Assessing Officer in the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also mentioned that its position was based on the [ decisions of the Delhi Tribunal in the case of Oswal Agro Mills Ltd vs DCIT (1994) 51 ITD 447 (Del) and the decision of the Special bench of Hon'ble Calcutta Tribunal in the case of Sutlej Cotton Mills Limited vs ACIT (1993) 45 ITD 22 (Cal)(SB). [15] In this connection, it was submitted that the profit on sale. of fixed assets was excluded by the appellant from the computation of the book profit under section 155JB(2) of the Act on the basis that profit on sale of fixed assets was not earned in the regular course of business. In this regard, the appellant submitted that the Hon'ble Mumbai ITAT in the case of ITO vs Frigsales (India) Ltd. (2005), 4 SOT 376 (Mumbai), had decided on the issue of treatment to be accorded to sale of Fixed Asset in computing book profit. Towards the same, the Hon'ble ITAT receipt which is not in the nature of income cannot be taxed as income under section 115JA of the Act. Therefore, the Hon'ble Mumbai ITAT held that Capital Gains arising to the Appellant under section 50 of the Act on a depreciable asset is liable to be excluded from deemed profits under section 115JA of the Act. Re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'ble 1TAT (in merit appeal) that the said Apex Court judgment was considered for the fir- St time. Moreover, it was only after the said Hon'ble ITAT order (issued can 07th March, 2008), the Assessing Officer concluded that the Appellant had not taken into consideration the Hon'ble Apex Court judgment of Apollo Tyres Ltd. (Supra). Accordingly, the learned Assessing Officer erred in holding that the Appellant has consciously and deliberately refused to take into consideration the judgment of the Apex Court in the case of Apollo Tyres Ltd. (Supra). [18] I have considered the submissions of the appellant and have also perused the penalty order. The main argument of the Ld. Assessing Officer is that the appellant had deliberately taken shelter under the judicial pronouncements which were in its favour and had deliberately not considered the judgment in the case of Apollo Tyres (supra) which had become available before the date of thin of return. [19] It is an admitted position that the appellant had made elaborate disclosures on its notes to the computation of MAT liability providing the basis (along with relevant judicial- pronouncements) on which the sale profits wer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which resulted in keeping off or hiding a portion of its income is punishable as furnishing inaccurate particulars of its income." [24] In the case of K C Builders vs ACIT (2004) 265 ITR 562 (SC), the Hon'ble Supreme Court has held as follow: "The meaning. of the word "concealment"- as found in Shorter- Oxford English Dictionary, third edition, Volume l, is as follows : - "In law, the intentional suppression of truth or fact known, to the injury or prejudice of if another. The Shorter Oxford Dictionary V edition, Volume 1 ('Oxford Dictionary') defines the word 'conceal' as 'keep out of sight or notice, keep secret, refrain from disclosing or divulging' As per Black's Law Dictionary, 'concealment' Is the act of refraining from disclosure; an act which prevents or hinders the discovery of something; act of removing from sight or notice; hiding. Further, 'Concealment' is an affirmative act far intended or known to be likely to keep another from learning, of a fact which he would otherwise have learned. Such affirmative action is always equivalent to a misrepresentation... [25) Based on the above judicial pronouncements ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itted position in the instant case that no information given in the return was found to be incorrect or inaccurate. It was not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee could not be held guilty of furnishing inaccurate particulars. The revenue argued thatsubmitting an incorrect claim in law for the expenditure On interest would amount to giving inaccurate particulars of such Income. Such cannot be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly; covered by the provision, the penalty provision cannot be invoked. By any stretch of Imagination, making an incorrect claim in law cannot tantamount' to furnishing of inaccurate particulars. [Para 7] Therefore, it must be shown that the conditions under section 271(1)(c ) exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed, because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of CIT vs. Nalwa Sons Investment ltd, order dated 4.5.2012 in Special Leave to Appeal (Civil) No(s).18564/2011 , wherein, it was held as under: "In this context, Hon'ble Delhi High Court in its judgment dated 26.8.2010 in ITA No.1420 of 2009 in the case of Nalwa Sons Investment Ltd. (available in MRS as 2010-LL-0826-2), held that when the tax payable on income computed under normal procedure is less than the tax payable under the deeming provisions of Section 115JB of the Act, then penalty under section 271(1)(c) of the Act could not be imposed with reference to additions /disallowances made under normal provisions. The judgment has attained finality. 4. Subsequently, the provisions of Explanation 4 to sub-section (1) of `section 271 of the Act have been substituted by Finance Act, 2015, which provide for the method of calculating the amount of tax sought to be evaded for situations even where the income determined under the general provisions is less than the income declared for the purpose of MAT u/s 115JB of the Act. The substituted Explanation 4 is applicable prospectively w.e.f. 01.04.2016. 5. Accordingly, in view of the Delhi High Court judgment and substitution of ....