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TMI Blog2014 (1) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... - Shri B. R. Mittal And Shri Sanjay Arora,JJ. For the Appellant : Shri Rakesh Joshi For the Respondent : Shri Mohit Jain ORDER Per B. R. Mittal, JM:- The assesee has filed this appeal for assessment year 2003-04 against order dated 24.10.2011 of ld CIT(A)-13, Mumbai confirming the levy of penalty u/s.271(1)(c) of the Act of Rs.4,22,164 on account of addition of Rs.11,48,746/-. 2. The relevant facts are that assessee filed return of income declaring income at Rs. Nil. The AO completed assessment u/s.143(3) assessing the loss of Rs.72,34,415 after setting off brought forward unabsorbed depreciation of Rs.94,70,234 under the normal provisions of the Act. Since the profit as per profit and loss account is of Rs.5,30,693/-, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, levied penalty @ 100% of tax sought to be evaded u/s.271(1)(c) of the Act, which works out to Rs.4,21,164/-. 4. In the first appeal, ld CIT(A) confirmed the action of AO. It is relevant to state that ld CIT(A) placed reliance on the decision of Hon'ble Kerala High Court in the case of CIT vs. Gates Farm and Rubber C, 91 ITR 467 (Ker) and stated that assessee made false claim which would amount to concealing the income. Ld CIT(A) also placed reliance on the decision of Hon'ble Gujarat High Court in the case of CIT vs. Vidyagauri Natverlal Ors, 238 ITR 91(Guj). Hence, this appeal by assessee. 5. At the time of hearing, ld A.R. submitted that similar kind of expense was made in assessment year 2001-02, which was allowed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and, therefore, levy of penalty is not justified on the facts of the case of the assessee. 6. On the other hand, ld D.R. supported orders of authorities below. He submitted that Mr Naval Kumar was only 19 years old in 1999 when he completed his B.Sc and immediately he was employed and sent for the computer course to Rochester Institute of Technology, New York. He submitted that assessee company was promoted by parents of Mr Naval Kumar as 99% of shares are held by Mr B.R.Kumar and 1% share held by Mrs Pushpa Kumar wife of Mr B.,R.Kumar. He further submitted that only Mr Naval Kumar was sent for such training programme after executing an agreement and no other employee was sent. He further submitted that at the time when Mr Naval Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 115JB of the Act as the total income computed as per normal provisions of the Act was less than the book profits computed u/s.115JB of the Act. The Hon'ble Delhi High Court in the case of Nalwa Sons Investments Ltd (supra) has considered similar issue, wherein, it was held that while considering levy of penalty u/s.271(1)(c) of the Act, it has to be considered as to whether furnishing of such wrong particulars had any effect on the amount of tax sought to be evaded. It was held that under the scheme of the Income-tax Act, 1961, the total income of the assessee is first computed under the normal provisions of the Act and tax payable on such total income is compared with the prescribed percentage of the book profits computed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon'ble Delhi High Court was followed by the ITAT Mumbai Bench in the case of M/s. Ruchi Strips Alloys Ltd(supra) and penalty levied u/s.271(1)(c) of the Act was cancelled on the ground that total income of the assessee was determined on the basis of book profits u/s.115JB of the Act as there was no tax sought to be evaded because the addition in respect of which penalty was imposed was made while computing the total income under the normal provisions of the Act and ultimately, total income of the assessee was determined on the basis of book profits u/s.115JB of the Act. Therefore, the said concealment has no effect on evasion of tax. Since above decisions squarely apply to the facts of the assessee under consideration before us, resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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