VRN Ceramics Ltd., Sabarkantha V. The Dy,CIT.,S.K.Circle, Himatnagar

ITA 2483/AHD/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6462 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 10-08-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P TALATI
• Assessee Lawyers: M G PATEL
• Keywords: Unexplained expenditure; Business income; Depreciation; Revised return
• Section: 40A(3); 143(3); 115JB; 80IB; 32

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C.AGRAWAL, A M VRN CERAMICS LTD., CERAMIC ZONE, DALPUR, TAL.PRANTIJ, DIST. SABARKANTHA. VS. DY. CIT, SABARKANTHA CIRCLE, HIMATNAGAR. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M. G. PATEL, AR RESPONDENT BY:- SHRI S. P. TALATI, SR.DR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUND :- (1) THE LD. CIT(A)VI, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE PENALTY OF RS.209,110/- LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961, BY THE AO. 2. THE ASSESSEE IS AGGRIEVED AGAINST THE CONFIRMATI ON OF PENALTY OF RS.2,09,110/- LEVIED U/S 271(1)(C) BY THE AO. 3. THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF CERAMICS. IT FILED RETURN AT NIL INCOME WHEREIN DED UCTION U/S 80IB WAS CLAIMED. ASSESSMENT WAS COMPLETED U/S 143(3) WHEREI N AN ADDITION OF RS.5,82,894/- WAS MADE U/S 69C, ON THE GROUND OF UN ACCOUNTED PURCHASES ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 2 ON CORRUGATED BOXES. THE AO POINTED OUT THAT THE CE NTRAL EXCISE AUTHORITIES HAD CARRIED OUT SEARCH AT THE BUSINESS PREMISES OF ONE M/S CROMPTON INDUSTRIES, HIMATNAGAR ON 9.2.2005. THAT A SSESSEE WAS ENGAGED IN MANUFACTURING OF CORRUGATED BOXES. DURIN G THE COURSE OF THAT SEARCH IT WAS NOTED THAT M/S CROMPTON INDUSTRIES HA D SOLD CORRUGATED BOXES TO MANY CERAMIC INDUSTRIES OUTSIDE THE BOOKS. CONSEQUENTLY CENTRAL EXCISE AUTHORITIES CARRIED OUT SEARCH IN TH E CASE OF ASSESSEE COMPANY ON 9.2.2005 AS IT HAD PURCHASED 66,500 BOXE S OUTSIDE THE BOOKS FROM M/S CROMPTON INDUSTRIES. DURING THE COURSE OF SEARCH STATEMENT OF SHRI VINODKUMAR K. PATEL ONE OF THE DIRECTORS OF AS SESSEE COMPANY WAS RECORDED, WHEREIN HE SEEMS TO HAVE CONFESSED THAT A SSESSEE DID PURCHASE 66,500 CORRUGATED BOXES OUTSIDE THE BOOKS FROM M/S CROMPTON INDUSTRIES IN CASH AND IT REMOVED FINISHED GOODS WORTH RS.54,8 6,250/- WITHOUT PAYMENT OF EXCISE DUTY TO THE TUNE OF RS.4,47,678/- . THE ASSESSEE ACCORDINGLY AGREED TO PAY EXCISE DUTY TO THAT EXTEN T AND SUBSEQUENTLY IT FILED A REVISED RETURN OF INCOME ON 2.5.2006 WHEREI N GP TO THE EXTENT OF RS.18,41,734/- WORKED OUT ON UNACCOUNTED SALES WAS FURTHER INCLUDED. THE AO, HOWEVER, ADDED A SUM OF RS.5,82,894/- BEING AMOUNT PAID BY THE ASSESSEE IN CASH FOR PURCHASE OF CORRUGATED BOX ES OUTSIDE THE BOOKS TREATING IT AS UNACCOUNTED EXPENDITURE. THIS SUM WA S ADDED NOT ONLY IN THE NORMAL COMPUTATION OF INCOME BUT ALSO IN THE IN COME COMPUTED U/S 115JB. ORIGINALLY ASSESSEE HAD FILED REVISED RETURN AS WELL AS ORIGINAL ON ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 3 NIL AFTER CLAIMING DEDUCTION U/S 80IB BUT IN THE RE VISED RETURN INCOME WAS OFFERED U/S 115JB AT RS.54,45,681/-. THE AO MAD E THE ADDITION OF RS.5,82,894/- BOTH IN THE NORMAL COMPUTATION AS WEL L AS IN THE COMPUTATION U/S 115JB. THUS INCOME U/S 115JB ASSESS ED WAS AT RS.60,28,574/- WHICH INCLUDED ORIGINAL OFFERED INCO ME IN THE REVISED RETURN AT RS.54,45,681/-. WHEN OUR ATTENTION WAS DR AWN TO PAGES 1,2 & 3 OF THE ASSESSEES PAPER BOOK, WE NOTICED THAT AS PE R STATEMENT OF INCOME FILED IN THE ORIGINAL RETURN INCOME AS PER NORMAL C OMPUTATION AS WELL AS PROFIT U/S 115JB WAS WORKED OUT AS UNDER :- STATEMENT OF INCOME BUSINESS INCOME NET PROFIT AS PER PROFIT & LOSS A/C 3402000 ADD: DISALLOWABLE/TREATED SEPARATELY DEPRECIATION 11450000 20% OF CASH PAYMENT EXCEEDING RS.20000/- U/S 40A(3) THE DETAILS OF WHICH IS GIVEN IN PARA 17(H) OF FORM NO.3CD (RS.28750) 5750 11464750 14866750 LESS: DEPRECIATION U/S 32 10302188 4584581 LESS: CARRY FORWARD LOSSES OF EARLIER YEAR 2598050 1966511 LESS: DEDUCTION U/S 80IB 1966511 TOTAL INCOME NIL NOTE: 1.TAX ON BOOK PROFIT U/S 115JB 255581 REPORT IN FORM NO.29B ATTACHED ADD: SURCHARGE 8390 261971 ADD: EDUCATION CESS 5239 267210 LESS: ADVANCE TAX 300000 REFUND DUE 32790 ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 4 AFTER SEARCH BY CENTRAL EXCISE AUTHORITIES WHERE AS SESSEE OFFERED ADDITIONAL INCOME OF RS.18,41,734/- COMPUTATION OF INCOME WAS SHOWN AS UNDER :- REVISED STATEMENT OF INCOME BUSINESS INCOME NET PROFIT AS PER PROFIT & LOSS A/C 3402000 ADD: DISALLOWABLE/TREATED SEPARATELY DEPRECIATION 11450000 20% OF CASH PAYMENT EXCEEDING RS.20000/- U/S 40A(3) THE DETAILS OF WHICH IS GIVEN IN PARA 17(H) OF FORM NO.3CD (RS.28750) 5750 11464750 14866750 ADD:INCOME CONSEQUENCE TO EXCISE SEARCH (SEE NOTE-4) INCOME CONSEQUENCE TO SALES TAX SEARCH (SEE NOTE-5) LESS: DEPRECIATION U/S 32 1841734 196197 18904681 10302188 6602492 LESS: CARRY FORWARD LOSSES OF EARLIER YEAR 2598050 4004442 LESS: DEDUCTION U/S 80IB 4004442 TOTAL INCOME NIL NOTE: 1.TAX ON BOOK PROFIT U/S 115JB 408426 REPORT IN FORM NO.29B ATTACHED ADD: SURCHARGE 10211 418637 ADD: EDUCATION CESS 8373 427009 LESS: ADVANCE TAX 300000 127009 ADD: INTEREST 32991 160000 LESS: PAID ON /04/2008 160000 NIL ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 5 THUS TAX ON THE COMPUTATION OF INCOME U/S 115JB AS PER ORIGINAL STATEMENT OF INCOME WAS DETERMINED AT RS.2,87,210/- BUT AFTER SEARCH BY CENTRAL EXCISE AUTHORITIES TAX ON THE BOOK PROFIT U /S 115JB WAS CALCULATED AT RS.4,27,009/-. INTEREST THEREON WAS ADDITIONAL. THE QUANTUM ADDITION IS CONFIRMED BY LD. CIT(A) AND IT IS INFORMED TO US TH AT THERE IS NO APPEAL FILED BEFORE THE TRIBUNAL. THUS THE ADDITION MADE I N NORMAL COMPUTATION OF INCOME AS WELL AS IN COMPUTATION U/S 115JB SEEMS TO HAVE REACHED FINAL STAGE. 4. IN PENALTY PROCEEDINGS THE AO ISSUED SHOW CAUSE NOTICE IN RESPONSE TO WHICH ASSESSEE FURNISHED A REPLY WHICH IS REFERRED TO BY THE AO ON PAGES 2,3 & 4 OF HIS ORDER. THE GIST OF THE R EPLY IS THAT ANY ADDITION IN THE BUSINESS INCOME WOULD BE ELIGIBLE F OR DEDUCTION U/S 80IB AND FURTHER SUCH INCOME WOULD BE SET OFF AGAINST BR OUGHT FORWARD LOSSES/DEPRECIATION. THE AO DID NOT ACCEPT THE ABOV E EXPLANATION ON THE GROUND THAT THE DIRECTOR OF THE COMPANY SHRI VINODK UMAR K. PATEL HAS ACCEPTED AT THE TIME OF SEARCH AND SUBSEQUENT THERE TO THAT ASSESSEE COMPANY PURCHASED 66500 CORRUGATED BOXES OUTSIDE TH E BOOKS AND ALSO REMOVED FINISHED GOODS WORTH RS.54,96,250/-. AS A C ONSEQUENCE THE ASSESSEE HAS FILED A REVISED RETURN DECLARING A FUR THER GP OF RS.18,41,734/- ON UNACCOUNTED SALES. THUS IN THE OR IGINAL RETURN THIS ASSESSEE HAS FURNISHED INACCURATE PARTICULARS AS AD DITIONAL PROFIT WAS ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 6 DECLARED IN THE REVISED RETURN ONLY WHEN NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE ON 6.12.2005 AFTER THE SEARCH CARRIED OUT BY THE CENTRAL EXCISE DEPARTMENT. THE ASSESSEE HAD FILED REVISED R ETURN ONLY AFTER CONCEALMENT HAVING BEEN DETECTED AS PER SEARCH CARR IED OUT BY THE CENTRAL EXCISE DEPARTMENT. HE ACCORDINGLY LEVIED PENALTY AT RS.2,09,113/-, PRESUMABLY ON ADDITION OF RS.5,82,894/-. THE LD. CI T(A) CONFIRMED THE LEVY OF PENALTY. 5. BEFORE US, THE LD. AR FOR THE ASSESSEE ARGUED TH AT WHERE TOTAL INCOME COMPUTED UNDER REGULAR PROVISIONS IS LESS TH AN BOOK PROFIT AND ASSESSMENT IS MADE U/S 115JB THEN PENALTY CANNOT BE LEVIED. FOR THIS PROPOSITION HE RELIED ON THE FOLLOWING DECISIONS :- (1) CIT VS. NALWA SONS INVESTMENT LTD. 327 ITR 543 (DEL) (2) DCIT VS. USHDEV INTERNATIONAL LTD. 51 DTR 283 ( MUMBAI) (3) RUCHI STRIPS & ALLOYS LTD. VS. DCIT 42 BCAJ PAG E 39 6. THE LD. DR ON THE OTHER HAND SUBMITTED THAT IT I S NOT A CASE THAT BOOK PROFIT HAS BEEN THE SAME IN BOTH THE SITUATION , NAMELY PRIOR TO DETECTING CONCEALMENT AND AFTER DETECTING CONCEALME NT. IN FACT ASSESSEE HAS HIMSELF INCREASED BOOK PROFIT IN THE REVISED RE TURN AFTER FINDING CONCEALMENT ON THE BASIS OF SEARCH CARRIED OUT BY T HE CENTRAL EXCISE DEPARTMENT.EVEN THE ADDITION AT RS.5,82,894/- HAS B EEN MADE BOTH IN THE NORMAL COMPUTATION AS WELL AS IN THE BOOK PROFIT WH ICH SEEMS TO HAVE ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 7 BECOME FINAL AS THERE IS NO FURTHER GRIEVANCE AFTER THE ORDER OF LD. CIT(A) ON QUANTUM ADDITION. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW IT IS A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C). IT IS NOT A CASE WHERE BOOK PROF IT WOULD HAVE REMAINED THE SAME PRIOR TO ADDITION MADE IN THE NORMAL COMPU TATION OF INCOME AND AFTER THE ADDITION MADE IN SUCH NORMAL COMPUTATION. IF ADDITION IS ONLY AFFECTING NORMAL COMPUTATION OF INCOME AND BUSINESS PROFIT U/S 115JB WOULD HAVE REMAINED THE SAME AS FILED BY THE ASSESS EE IN THE ORIGINAL RETURN OF INCOME THEN THERE WOULD NOT HAVE BEEN ANY CASE FOR LEVY OF PENALTY AS HELD BY HON. DELHI HIGH COURT IN CIT VS. NALWA SONS INVESTMENT LTD. 327 ITR 543 (DEL) (SUPRA) AND OTHER TWO DECISIONS REFERRED TO BY THE LD. AR. BUT THIS CASE IS DIFFERE NT. THE ASSESSEE HIMSELF HAS CHANGED THE PROFIT U/S 115JB WHILE FILING THE R EVISED RETURN AND PAID THE TAXES. AS POINTED OUT ABOVE, TAX U/S 115JB AS P ER ORIGINAL RETURN WAS RS.2,87,210/- WHEREAS TAX AS PER REVISED STATEMENT OF INCOME AND COMPUTATION U/S 115JB IS RS.4,27,009/-, INTEREST BE ING (RS.32,991/-) ADDITIONAL. IT IS WORTHWHILE TO MENTION THE NOTES G IVEN BY THE ASSESSEE BELOW THE REVISED STATEMENT OF INCOME AS UNDER :- 3. ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB OF INCOME-TAX ACT, 1961. ASSESSEE HAS COMMENCED ITS COMMERCIAL PRODUCTION IN THE MONT H OF NOV.2003. HOWEVER IN VIEW OF NEGATIVE INCOME (LOSS) DEDUCTION U/S 80IB WAS NOT CLAIMED IN ASST. YEAR 2004-05 THOUGH COMPANY WAS EL IGIBLE FOR THE SAME. IN ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 8 THIS YEAR (ACCOUNTING YEAR 2004-05) COMPANY HAS NET POSITIVE TOTAL INCOME. HENCE COMPANY HAS CLAIMED DEDUCTION U/S 80IB AND RE PORT FROM OUR AUDITORS IN FORM NO.10CCB IS OBTAINED AND IS ATTACHED HEREWI TH. 4. SUPERINTENDENT (PREVENTIVE) CENTRAL EXCISE, AHME DABAD III HAVE CARRIED OUT SEARCH IN THE FACTORY OF ASSESSEE COMPANY ON 9/2/20 05. DURING SAID SEARCH SHORTAGE IN SALES OF 66,500 BOXES WAS CAME TO THEIR NOTICE. ON SALES VALUE AT PRESCRIBED RATE OF EXCISE OF RS.447678./- WAS PAID BY THE COMPANY. CONSEQUENCE TO SAID SEARCH SALES AT AVERAGE RATE OF RS.82.50 PER BOX WORKED OUT TO RS.5486250/- AND AS PER ORIGINAL RETURN FILE D ON 17/10/2005 ACK.NO.5506 FOR ASST. YEAR 2005-06 GP IS WORKED OUT @ 33.57%. HENCE INCOME @ 33.57% ON RS.5486250 COMES TO RS.1841734/- IS DECLARED IN ABOVE REVISED STATEMENT OF INCOME. 5. SALES TAX OFFICER FLYING SQUAD, UNIT-I, GUJARAT STATE- AHMEDABAD HAVE CARRIED OUT SEARCH IN THE FACTORY OF ASSESSEE COMPANY ON 22 /01/2005. DURING SAID SEARCH SALES TAX WAS RECOVERED ON FOLLOWING FINDING S: 1. STOCK DIFFERENCE OF RS.72517/- 2. UNACCOUNTED SALES OF RS.70537/- 3. ESTIMATED BARDAN SALES OF RS.100000/- CONSEQUENCE TO ABOVE SAID FINDINGS INCOME IS DISCL OSED AS UNDER : 1. RS.72517/- DIFFERENCE IN STOCK 2. RS.23659/- 33.57% GP OF SALES OF RS.70537/- 3. RS.100000/- BARDAN SALES --------------- 196197 TOTAL WE NOTE THAT ASSESSEE HAD FILED RETURN OF INCOME ON 17.10.2005 AND REVISED RETURN WAS FILED ON 2.5.2006. THE SEARCH BY CENTRAL EXCISE AT ASSESSEES PREMISES WAS CARRIED OUT ON 9.2.2005. IT IS DURING THIS SURVEY THAT DIRECTOR OF THE ASSESSEE COMPANY HAD ADMITTED TO HAVE PURCHASED ADDITIONAL CORRUGATED BOXES AND REMOVED FINISHED GO ODS WORTH RS.54,82,250/-. THE ASSESSEE COMPANY DID NOT DECLAR E THE ADDITIONAL INCOME IN THE ORIGINAL RETURN FILED WHICH WAS AFTER THE SEARCH. IT WAS ONLY WHEN THE AO ISSUED THE NOTICE U/S 143(2) WHILE EXAM INING THE RETURN OF INCOME THAT ASSESSEE COMPANY CONSIDERED TO FILE REV ISED RETURN AND ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 9 DECLARE THEREIN THE UNACCOUNTED SALES AND PROFITS T HEREON. HAD THERE BEEN ANY GOOD INTENTION ON THE PART OF THE ASSESSEE THEN IN THE ORIGINAL RETURN ITSELF IT WOULD HAVE BEEN DISCLOSED THE SUPPRESSED SALES AND PROFIT THEREON AND THEREAFTER SHOULD HAVE WORKED OUT BOOK PROFIT U /S 115JB BUT FOR THE REASONS BEST KNOWN TO THE ASSESSEE, WHO CHOSE NOT T O DECLARE SUPPRESSED SALES AND PROFIT THEREON, IN THE ORIGINAL RETURN, A ND HAD TO RESORT TO FILE A REVISED RETURN ONLY WHEN SCRUTINY ASSESSMENT WAS UN DERTAKEN BY THE AO. THUS THERE IS NO DISCOVERY OF ANY OMISSION BUT THER E IS CLEARLY ADMISSION TO HIDE WHILE FILING ORIGINAL RETURN ON 17.10.2005, WHAT HAS BEEN DECLARED TO THE CENTRAL EXCISE DEPARTMENT. THERE IS A CLEAR CASE OF CONCEALMENT OF PARTICULARS OF INCOME INASMUCH AS THE FACTS DISCOVE RED IN THE SEARCH CARRIED OUT BY THE CENTRAL EXCISE AUTHORITIES RESUL TING INTO ADDITIONAL PROFITS WERE CONCEALED WHILE FILING THE ORIGINAL RE TURN OF INCOME. 8. NOT ONLY THIS, EVEN SALES-TAX AUTHORITIES HAD CA RRIED OUT SEARCH WHICH RESULTED INTO ADDITIONAL INCOME AT RS.1,96,19 7/-. THIS EARCH WAS CARRIED OUT ON 22.1.2005. THESE DETAILS WERE ALSO N OT DECLARED IN THE ORIGINAL RETURN FILED ON 17/10/2005 BUT BECAME PART OF REVISED RETURN ONLY. ENTIRE SUPPRESSED SALES AND PROFIT ALSO BECAME PART OF BOOK PROFIT U/S 115JB WHICH RESULTED IN HIGHER TAX UNDER THAT SECTI ON AS POINTED OUT ABOVE. IT IS NOT A CASE SIMPLICITER THAT BOOK PROFI T AND SALES-TAX THEREON REMAINED STATIC EVEN THOUGH AO HAD DISCOVERED SUPPR ESSION OF PROFIT AND ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 10 MADE THE ADDITION IN THE NORMAL COMPUTATION OF BUSI NESS INCOME ONLY. SUCH SUPPRESSED PROFIT HAD EFFECT IN THE COMPUTATIO N OF INCOME MADE U/S 115JB AS ADMITTED BY THE ASSESSEE BY FILING REVISED RETURN. THUS THE BOOK PROFIT AND TAX ON SUCH BOOK PROFIT DID NOT REMAIN S TATIC BUT INCREASED. 9. THE RATIONAL GIVEN BY HON. DELHI HIGH COURT IN C IT VS. NALWA SONS INVESTMENT LTD. (SUPRA) WHILE CANCELING THE PE NALTY WAS THAT THERE WILL NOT BE ANY TAX SOUGHT TO BE EVADED IF BOOK PRO FIT REMAINED STATIC PRIOR TO AND AFTER THE ADDITION MADE IN THE NORMAL COMPUTATION OF INCOME. IT HELD THAT CONCEALMENT DID NOT LEAD TO TAX EVASIO N AT ALL. BUT IN THE PRESENT CASE THE FACTS ARE DIFFERENT. THE CONCEALME NT HAD AN IMPACT ON FINAL COMPUTATION OF TAX U/S 115JB. THERE IS CLEARL Y A TAX SOUGHT TO BE EVADED AS THERE IS DIFFERENCE BETWEEN THE TAX CALCU LATED PRIOR TO ADDITION MADE AND SUBSEQUENT TO ADDITION MADE IN COMPUTATION OF BOOK PROFIT U/S 115JB. EVEN IF WE CONSIDER EXPLANATION-4 TO THE SEC TION 271(1)(C), WE FIND THAT CLAUSE (C) THEREON IS CLEARLY APPLICABLE. CLAUSE (A) TO EXPLANATION 4 IS APPLICABLE IN A SITUATION WHERE DECLARED INCOM E IS LOSS WHICH AFTER ADDITION IS CONVERTED INTO INCOME OR WHICH AFTER AD DITION IS REDUCED I.E. FINALLY (I) ASSESSED LOSS IS REDUCED TO A LESSER LO SS OR (II) ASSESSED LOSS IS CONVERTED INTO POSITIVE INCOME BY WAY OF ADDITION. SINCE IN THE PRESENT CASE INCOME IS COMPUTED UNDER SECTION 115JB WHERE D ECLARED INCOME IS ALWAYS POSITIVE, CLAUSE (A) TO EXPLANATION-4 WILL N OT BE APPLICABLE. CLAUSE ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 11 (B) IS APPLICABLE ONLY IN A CASE WHERE RETURN OF IN COME IS FILED AS PER EXPLANATION-3 TO SECTION 271(1)(C). CLAUSE (C) IS A PPLICABLE IN RESIDUAL CASES I.E. WHERE NEITHER CLAUSE (A) NOR CLAUSE (B) IS APPLICABLE. THEREFORE, TAX SOUGHT TO BE EVADED IN THE PRESENT CASE HAS TO BE COMPUTED AS PER CLAUSE (C). HERE INCOME ASSESSED U/S 115JB IS MORE THAT THE INCOME RETURNED U/S 115JB AS TAX COMPUTATION THEREON REVEA LED. WE MAY REITERATE THAT THE IMPUGNED ADDITION OF RS.5,82,894/- IN THE PRESENT CASE WAS ALSO MADE IN THE BOOK PROFIT WHICH BECAME FINAL. NOTWITH STANDING, COMPUTATION OF TAX SOUGHT TO BE EVADED HAS TO BE CO MPUTED ON THE BASIS OF BOOK PROFIT BEING INCOME FINALLY ASSESSED U/S 11 5JB MINUS TAX ON BOOK PROFIT BEING INCOME SURVIVED BY REDUCING THE AMOUNT OF CONCEALMENT FROM THE BOOK PROFIT SO ASSESSED. THE LD. A.O. HAS HOWEVER, CALCULATED TAX SOUGHT IT TO BE EVADED ONLY ON THE BASIS OF ADD ITION OF RS.5,82,894/-. THIS IS NOT CORRECT ACCORDING TO EXPLANATION 4 TO S ECTION 271(1)(C). SINCE COMPUTATION OF TAX SOUGHT TO BE EVADED IS NOT ACCOR DING TO LAW IT REQUIRES TO BE RECOMPUTED. BUT, SO FAR AS LEVY OF PENALTY IS CONCERNED, WE ARE OF THE CONSIDERED VIEW THAT AUTHORITIES BELOW WERE JUS TIFIED IN HOLDING THAT IT IS A CASE OF CONCEALMENT OF INCOME. HOWEVER, FOR TH E PURPOSE OF COMPUTING TAX SOUGHT TO BE EVADED, WE RESTORE THE M ATTER TO THE FILE OF AO. AS A RESULT, THE APPEAL FILED BY THE ASSESSEE I S PARTLY ALLOWED BUT FOR STATISTICAL PURPOSES. ITA NO.2483/AHD/2010 ASST. YEAR 2005-06 12 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 31.5.11. SD/- SD/- (BHAVNESH SAINI) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 31.5.11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 9/5/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 14/5/2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..