Penalty deleted as assessee had disclosed all particulars of income in return
Penalty deleted as assessee had disclosed all particulars of income in return
Assessee company was a manufacturer and exporting of granite. It had shown income from FDR and NSC and claimed deduction u/s 10B (of Income Tax Act, 1961), and the issue reched to the ITAT which held assessee had claimed wrong deduction. AO imposed penalty @100% on tax sought to be evaded. CIT(A) deleted penalty. ITAT held that assessee had disclosed all particulars of income in return alongwith audit report, and thus, penalty was not justified.
1 The assessee company was engaged in the business of manufacturing and exporting of granite and other natural stone slabs and tiles. The assessee filed return declaring total income of 1,84,80,180/- and for A.Y. 2008-09 it filed return declaring total income of Rs. NIL. Both the cases were scrutinized U/s 143(3) (of Income Tax Act, 1961). In A.Y. 2007-08, the assessee had shown income from FDR and NSC at Rs. 32,94,630/- and in A.Y. 2008-09, these receipts were Rs. 56,55,228/-. The assessee had claimed deduction U/s 10B (of Income Tax Act, 1961) on it. The Assessing Officer in quantum addition had observed that these receipts were not business income and cannot be treated as income derived from the export business. Therefore, deduction U/s 10B (of Income Tax Act, 1961) was not allowed in both the years on the
receipt. The ld CIT(A) in both the years have confirmed the addition made on account of interest not considered as derived income for computing deduction U/s 10B (of Income Tax Act, 1961). Assessing Officer held that there was no direct nexus between the interest earned with the export business. Therefore, the same cannot be treated as income from export business. The Hon'ble ITAT in its order dated 31/7/2009 for A.Y. 2006-07 has decided the issue in favour of the department, therefore, the assessee had claimed wrong deduction U/s 10B (of Income Tax Act, 1961) by furnishing inaccurate particulars of income and showing less business profit which led to concealment of income and penal action U/s 271(1)(c) (of Income Tax Act, 1961). established. The explanation filed by the assessee was not bonafide. Therefore, the explanation-1 of Section 271(1)(c) (of Income Tax Act, 1961) was squarely applicable. Accordingly, the Assessing Officer imposed minimum penalty @ 100% on tax sought to be evaded at Rs. 10,90,368/- in A.Y. 2007-08 and Rs. 50,89,705/- in A.Y. 2008-09.
2 CIT(A) deleted the penalty.
3 On appeal, the ITAT held as under:
"The case laws relied on by the assessee is squarely applicable in the assessee's case. In A.Y. 2008-09, the assessee's income assessed U/s 115JB (of Income Tax Act, 1961) and the Hon'ble Delhi High Court in the case of Cit Vs. Nalwa Sons Investments Ltd. (supra) has held that any addition in regular assessment and thereafter the case is assessed U/s 115JB (of Income Tax Act, 1961) and finally tax paid by the assessee on the basis of Section 115JB (of Income Tax Act, 1961). The concealment on account of any regular assessment, does not lead to evade the tax at all. Therefore, penalty U/s 271(1)(c) (of Income Tax Act, 1961) is not justified. In this year also, the assessee has disclosed all the particulars of income in return alongwith audit report. The matter is whether interest income has direct nexus with the export business or not. Therefore, we uphold the order of the ld CIT(A) in both the assessment years.”
Case Reference-BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM ITA Nos. 743 & 726/JP/2013 & 2014 Assessment Years : 2007-08 & 2008-09 Deputy Commissioner of Income Tax v M/s Tab India Granites Pvt. Ltd
IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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