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TMI Blog2014 (4) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee. Penalty u/s 271(1)(c) of the Act - Excess depreciation claimed Computation of profits u/s 115J of the Act – Held that:- The decision in Commissioner of Income Tax Noida Vs Aleo Manali Hydro Power P Ltd. [2013 (9) TMI 751 - ALLAHABAD HIGH COURT] followed - when the computation was made u/s 115JB, the concealment had no role to play and was totally irrelevant - the concealment did not lead to tax evasion at all - The book profit disclosed by the assessee for the purpose of the liability of tax u/s 115 J is relevant and not the Income determined under the provisions of Income Tax Act - The Tribunal on the facts and circumstances of the case has further recorded the finding that on the facts and circumstances of the case and on the bonafide of the explanation given by the assessee and the disclosure made in the accounts accompanying the return, no penalty is leviable - The finding of the Tribunal is a finding of fact – Decided against Revenue. - Income Tax Appeal No. - 73 of 2001 - - - Dated:- 7-4-2014 - Hon'ble Rajes Kumar And Hon'ble Dinesh Gupta,JJ. For the Appellant : A. N. Mahajan,A. Kumar,B. J. Agarwal,D. Awasthi,G. Krishna, R. K. Upadhyay, S. Chopr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) at Rs. one crore which has been reduced to Rs.74,17,870/ by Commissioner of Income Tax(Appeal) in the appeal against which the Assessee filed appeal before the Tribunal which has been allowed by the impugned order dated 15.12.2000. The Tribunal has deleted the penalty. The Tribunal has recorded the following finding : We have carefully considered the fact and circumstances of the case. The sum and substance of the matter is that the income returned by Assesse stands accepted as the final taxable income. Therefore, the bonafide of the assessee cannot be doubted . The assessee did not make a mistake in the calculation of income under the normal provisions of the Income Tax Act which was required only for comparison . There was in fact a calculation of bonafide mistake. The Income under the normal provisions of the Act had to be ignored because the income under Section 115J was always higher . All the facts relating to depreciation are fully disclosed in the notes on accounts accompanying the return. Even the computation of depreciation as per the Income tax Act was filled by the aseess on its own. The calculation under the normal provisions of the Income Tax Act had in any case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 387 Delhi ) against which SLP was dismissed by Apex Court . He further submitted that even in the false claim of depreciation penalty can not be levied Reliance has been placed on the case of Commissioner of Income Tax Vs Gold Coin Health Food reported in 2008(304) ITR page 308 We have considered the rival submissions.It is not in dispute that the Tribunal has accepted the book profit disclosed by the assessee in the assessment appeal which has been affirmed by this Court in the Appeal by its order dated 28.8.2012 in Appeal No.182 of 2000. This Court while dealing with the appeal arising from the assessment proceeding with respect to the determination of liability under Section 115 J has observed as follows: 6. On the third question, regarding change in method of charging depreciation from straight line to written down value method, the question, as rightly pointed out by the learned counsel for the respondent-assessee, is also covered by the decision of the Supreme Court in Apollo Tyres Vs. CIT [255 ITR 273]. In Malayalam Manorama Vs. CIT [300 ITR 251 (SC)], the Supreme Court following the ratio of the judgment in Apollo Tyres (Supra) held as follows:- In Apollo T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be approved by the company in its general meeting and thereafter to be filed before the Registrar of Companies who has a statutory obligation also to examine and satisfy that the accounts of the company are maintained in accordance with the requirements of the Companies Act. In spite of all these procedures contemplated under the provisions of the Companies Act, the Court observed that it is difficult to accept the argument of the Revenue that it is still open to the Assessing Officer to rescrutinize this account and satisfy himself that these accounts have been maintained in accordance with the provisions of the Companies Act. The Court categorically held that: ... the Assessing Officer while computing the income under Section 115-J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 2 has to be answered in the negative and in favour of the assessee. This Court while dealing with the penalty under Section 271(1)(c) Commissioner of Income Tax Vs Aleo Manali Hydro Power (P Limited has held as follows: The Delhi High Court held that in respect of company in question on the basis of normal provision income was assessed at negative i.e. on loss of Rs.36,95,21,018/-. The company was MAT company and that the assessment under Section 115-JB resulted in calculation of profit at Rs.4,01,63,180/-. The income of the assessee was thus assessed under Section 115-JB and not under normal provision. It was held; no doubt, there was concealment but that had its repercussions only when the assessment was done under the normal procedure. The assessment as per the normal procedure was, however, not acted upon. On the contrary, it is the deemed income assessed u/s 115JB which has become the basis of assessment as it was higher of the two. Tax is thus paid on the income assessed u/s 115JB. Hence, when the computation was made u/s 115JB, the concealment had no role to play and was totally irrelevant. Therefore, the concealment did not lead to tax evasion at all. The up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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