Sesa Kembla Coke Company Limited. Since merged with Sesa Goa Limited now Vedanta Limited., Panaji V. The Assistant Commissioner of Income Tax, Circle-1 (1), Panaji., Panaji

ITA 104/PAN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2027 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 27-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 115JB

Judgement Text

1 ITA NO. 104 /P A N/201 6 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 104 /P A N/201 6 (ASST. YEAR : 200 3 - 0 4 ) SESA KEMBLA COKE CO. LTD., (NOW MERGED WITH SESA GOA LTD.), SESA GHOR, NO.20, EDC COMPLEX, PATTO PLAZA, PANAJI GOA . VS. ACIT, CIRCLE - 1(1), PANAJI GOA. PAN NO. AACCS 7099 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BEN I CIO MENEZES (ASSOCIATE GENERAL MANAGER) DEPARTMENT BY : SHRI R.N. SIDDAPPAJI - D R DATE OF HEARING : 28 / 0 7 /201 6 . DATE OF PRONOUNCEMENT : 28 / 0 7 /201 6 . O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) PANAJI - 2 , DATED 1 0 /0 2 /201 6 . 2. THE SOLE GRIEVANCE IN THIS APPEAL OF THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING PENALTY UNDER SECTION 271(1)(C) FOR 8,48 , 510/ - . 3 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAI LABLE ON RECORD . IN THE INSTANT CASE , THE ASSESSEE FILED RETURN OF INCOME SHOWING ADJUSTED BOOK PROFIT UNDER SECTION 115JB OF 2,40,65,694/ - AFTER ADJUSTING BROUGHT FORWARD 2 ITA NO. 104 /P A N/201 6 LOSS OF 1,07,74,718/ - . THE ASSESSEE HAD BROUGHT FORWARD LOSS AS PER BOOKS OF ACCOUNTS OF 3,4 4, 3 4 ,392/ - WHICH WAS BIFURCATED INTO BROUGHT FORWARD LOSS OF 1,07,74,718/ - AND THE UNABSORBED DEPRECIATION OF 2,36,59,674/ - BY CONSIDERING THE ACTUAL LOSS ES OF THE PAST YEARS AND SETTING OFF THE PROFIT , IF ANY, OF THE INTERVENING YEARS , PROPORTIONATELY. THE ASSESSING OFFICER OBSERVED THAT BROUGHT FORWARD LOSSES WOULD HAVE TO BE BIFURCATED BY ADJUSTING THE PROFIT OF THE INTERVENING YEARS, IF ANY, WHOLLY AGAINST THE BROUGHT FORWARD LOSSES . BY SO BIFURCATING THE LOSS OF 3,44,34,392/ - , THE BROUGHT FORWARD LOSS WAS CONSIDERED AS NIL AND UNABSORBED DEPRECIATION AT 3,44,34,392/ - AND ACCORDINGLY THE AMOUNT TO BE REDUCED UNDER CLAUSE (III) OF THE EXPLANATION TO SECTION 115JB WAS NIL , AS AGAINST THE ASSESSEES CLAIM IN ITS RETURN OF 1,07,74,718/ - . THEREFORE, HE LEVIED PENALTY UNDER SECTION 271(1)(C) FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE PENALTY OBSE RVING THAT THE ASSESSEE WITHOUT PROPERLY COMPLYING WITH THE PROVISIONS OF SECTI O N 115JB OF THE ACT HAS PAID TAX UNDER SECTION 115JB LESSER AMOUNT THAN WHAT IT WAS REQUIRED TO DO AND, THEREFORE, WAS LIABLE FOR PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5. BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ARGUED THAT ALL THE PARTICULARS FOR COMPUTING INCOME UNDER SECTION 115JB WERE FURNISHED BY THE ASSESSEE IN THE RETURN OF INCOME AND THEREFORE, THERE WAS NO CONCEALMENT OF INCOME AND/OR F URNISHING INACCUR ATE PARTICULARS OF INCOME AS NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. THEREFORE, THE ASSESSEE WAS NOT LIABLE TO PAY PENALTY. RELIANCE WAS PLACED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETR O PRODUCTS ( P ) LTD . REPORTED IN 322 ITR 158 . 3 ITA NO. 104 /P A N/201 6 6 . ON THE OTHER HAND , DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES . 7 . WE FIND THAT THE ASSESSING OFFICER FROM THE DETAILS FURNISHED BY THE ASSESSEE IN THE RETURN OF INCOME FOUND THAT THE ASSESSEE HAS CLAIMED DEDUCTION FOR BUSINESS LOSS WRONGLY WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF 1 ,07,74,718/ - . THOUGH, IT CAN BE ADMITTED THAT THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS IN HIS RETURNS AND CONSEQUENTLY THERE IS NO CONCEALMENT OF INCOME , T HIS ARGUMENT WOULD NOT STAND INSOFAR AS THE PROCEDURE FOR COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB IS NOT A NEW PROVISION . IT HAS BEEN IN THE STATUTE BOOK FOR SUBSTANTIAL LONG TIME. THE CONTROVER SY SURROUNDING THE COMPUTATION OF THE BOOK PROFIT HAS ALSO BEEN BEING LAID TO REST LONG AGO , MUCH BEFORE THE RELEVANT A SSESSMENT Y EAR . THE COMPUTATION OF THE BOOK PROFIT BY ADJUSTMENTS OF THE PROFIT AGAINST THE BROUGHT FORWARD BUSINESS LOSS AND THE UNABSORBED DEPRECIATION HAS BEEN DONE BY THE ASSESSEE ON A PRO - RATA BASIS , WHICH IS ITSELF TOTAL ERRONEOUS , S UCH A PRO - RATA REDUCTION FROM THE BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION IS NOT PROVIDED FOR NOR ANY SUCH INTERPRETATION BE DRAWN FROM ANY PROVISION UNDER SECTION 115JB . THUS, THIS ACT CLEARLY FALLS UNDER THE CATEGORY OF FURNISHING INACCURATE OF PARTICULARS OF INCOM E. THE CLAIM OF THE ASSESSEE THAT ITS COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB HAS BEEN APPROVED BY ITS AUDITORS ALSO, DOES NOT HOLD WATERS. IF IT IS TO BE ASSUMED THAT ONCE THE AUDITORS ACCEPTED THE ACCOUNTS AND HAVE CERTIFIED THE SAME, THEN THERE CANNOT BE NO CONCEALMENT OR FURNISHING INACCURATE PARTICULARS IS STRETCHING THE PROVISIONS OF THE TERM FURNISHING OF INACCURATE PARTICULARS TO AN EXTENT THAT IT BECOMES UNWORKABLE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE PENALTY HAS B EEN RIGHTLY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) . 4 ITA NO. 104 /P A N/201 6 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON THURSDAY , THE 28 TH DAY OF JU LY , 201 6 AT GOA. SD/ - SD/ - (N.S.SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH JU LY , 201 6 . VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI