Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: due date for vat payment :: VAT Audit :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: TDS :: form 3cd :: list of goods taxed at 4% :: VAT RATES :: empanelment
From the Courts »
 Abicor and Binzel Technoweld Pvt. Ltd vs. UOI (Bombay High Court)
 CST vs. Shri Krishna Chaitanya Enterprises (Bombay High Court)
 Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd vs. CIT (Supreme Court)
 Principal Commissioner Of Income Tax-7 Vs. Pavitra Commercial Ltd.
 Commissioner Of Income Tax Delhi Iv Vs. Gee Kay Finance & Leasing Co. Ltd.
 Pr.Commissioner Of Income Tax-6 Vs. Nokia Solutions & Network India Pvt Ltd (Formerly Known As, Nokia Siemens Network Pvt Ltd)
 SKY Light Hospitality Llp Vs. Assistant Commissioner Of Income Tax, Circle -28(1), New Delhi
 Tax outgo may rise for investors in companies undergoing M&A cases
 Rajat B Mehta vs. ITO (ITAT Ahmedabad)
 Seema Sabharwal vs. ITO (ITAT Chandigarh)
  Vikram Singh vs. UOI (Delhi High Court)

October, 23rd 2013
+                       INCOME TAX APPEAL NO. 89/2013

                                       Date of decision: 10th October, 2013

                                                              ..... Appellant
                              Through Mr. Siddharth Shankar Dev,


                                         ..... Respondent
                              Through Ms. Suruchi Aggarwal, Sr. Standing



        This appeal by the assessee under Section 260A of the Income

Tax Act, 1961 (Act, for short), relates to Assessment Year 2005-06 and

arises out of order of the tribunal dated 23rd March, 2012.

2.      By order dated 10th July, 2013, the following substantial

question of law was framed:-

                  "Whether the order of the Income Tax
                  Appellate Tribunal confirming penalty under
                  Section 271(1)(c) of the Income Tax Act, 1961
                  is justified as the appellant-assessee was
                  assessed and had paid tax under MAT

ITA No. 89/2013                                                   Page 1 of 4

3.      As is apparent from the question itself, income of the appellant-

assessee has been assessed under Section 115JB of the Act. As per the

income tax return filed on 31st October, 2005, the appellant-assessee

had suffered loss of Rs.12.28 crores under the normal provisions. The

Assessing Officer while examining the profit and loss account and

statement of income prepared under the normal provisions, disallowed

donation of Rs.50,98,500/-, which had been claimed as expenditure in

the profit and loss account. Under the heading "operating and general

expenses" schedule (xviii) the appellant-assessee had specifically

under "donation" mentioned this amount. However, the Assessing

Officer computed the income on book profits under Section 115JB

after noticing that the assessee had earned profit of Rs.14,47,91,067/-

in the said assessment year. No adjustment towards book profits was

made, except on account of        provision for wealth tax and excess

depreciation charged on electrical fittings.    Accordingly, minimum

alternative tax was computed.

4.      The Assessing Officer thereafter initiated penalty proceedings

under Section 271(1)(c) of the Act and imposed penalty of

Rs.24,94,596/-. While calculating the penalty, the Assessing Officer

records that the returned income was at loss of Rs.12,27,93,403/- and

the assessed income was at the positive figure of Rs.14,47,91,067/-.

ITA No. 89/2013                                                Page 2 of 4
The amount in respect of which inaccurate particulars were furnished

was taken at Rs.50,98,500/- plus foreign commission of Rs.18,89,158/-

(addition towards foreign commission was deleted by the tribunal and,

therefore, is not subject matter of the present appeal and penalty has

not been sustained by the tribunal on the said amount).

5.      In the first appeal filed before the Commissioner (Appeals), it

was stated that donation of Rs.50,98,500/- was given to charitable

organisations and deduction under Section 80G of the Act was

assessable. This amount was shown as an expense under the head

"administrative expenses" in the profit and loss account and the

relevant schedule of the balance sheet. It was stated that by mistake,

the appeallant-assessee inadvertently had failed to add back or disallow

Rs.50,98,500/- while computing the taxable income in the statement of

accounts. This was an inadvertent error as the amount paid was clearly

disclosed under the entry "donation" in the heading "administrative

expenses". There was no concealment.

6.      The Commissioner (Appeals) confirmed the said penalty and by

the impugned order penalty imposed has been sustained by the


7.      Learned counsel for the appellant has relied upon decision of the

Supreme Court in Price Water House Coopers Private Limited versus

Commissioner of Income Tax, (2012) 348 ITR 306(SC), but we need

ITA No. 89/2013                                                Page 3 of 4
not examine the said aspect as the appellant is entitled to succeed in

view of the decision of the Delhi High Court in Commissioner of

Income Tax versus Nalwa Sons Investments Limited, (2010) 327 ITR

543 (Delhi) wherein it has been held that when taxable income is

computed on book profits under Section 115JB and not under the

normal provisions, Explanation (4) has to be accordingly applied. In

view of the said Explanation, the additions made by the Assessing

Officer under the normal provisions are totally irrelevant. Thus, there

cannot be imposition of penalty under Section 271(1)(c) of the Act for

addition made under the normal provisions.

8.      Question of law is accordingly answered in favour of the

appellant-assessee and against the respondent-Revenue. The appeal is

disposed of. No order as to costs.

                                      SANJIV KHANNA, J.

                                      SANJEEV SACHDEVA, J.
OCTOBER 10, 2013

ITA No. 89/2013                                              Page 4 of 4
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Enterprise Resource Planning Solutions ERP Solutions Enterprise Resource Planning Software Solutions ERP Software Solutions Supply Chain Management Solutions SCM Solutions Supply Chain Management Software Solutions SCM Software Solutions Enterprise Resource Planning Solutions India ERP Solutions India Enterprise Resource Planning Software Solutions India ERP Software Solutions India Supply Chain Management Solutions India SCM Solutions India Supply Chain Management Software Solutions India SCM Software Solutions India

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions