KRUNG THAI BANK PCL, MUMBAI V. DDIT (IT)-3(1), MUMBAI

ITA 3931/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54830 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P K B MENON
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 115JB; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, MUMBAI. BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER I.T.A NO.3931/ MUM/2010 ASSESSMENT YEAR: 2004-05 KRUNG THAI BANK PCL, .. APPELLANT 62, MAKER CHAMBERS-VI, 6 TH FLOOR, NARIMAN POINT, MUMBAI-400 021 PA NO.AAACK 3475 E VS DY, DIT, (IT) 3(1) ,. RESPONDENT SCINDIA HOUSE, BALLARD ESTATE, MUMBAI. APPEARANCES: NONE, FOR THE APPELLANT P.K.B. MENON, FOR THE RESPONDENT DATE OF HEARING : 2.8.2011 DATE OF PRONOUNCEMENT : 10 .8.2011 O R D E R PER PRAMOD KUMAR: 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 11.3.2010 OF THE CIT(A)-XXXIII, IN THE MATTER OF PENALTY OF RS. 9,01, 251 LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 RELATING TO T HE ASSESSMENT YEAR 2004-05. I.T.A NO.3931/ MUM/2010 ASSESSMENT YEAR: 2004-05 2 2. BRIEFLY STATED THE MATERIAL FACTS ARE LIKE THIS. TH E ASSESSEE, A FOREIGN BANK OPERATING IN INDIA THROUGH A BRANCH OFFICE FILED IT S RETURN OF INCOME DECLARING INCOME AT ` . NIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN A PROFIT OF RS. 78,32 ,594 AS PER PROFIT AND LOSS ACCOUNT AND AFTER MAKING ADJUSTMENTS AS PER NORMAL PRO VISIONS OF THE ACT, THE ASSESSEE HAS SHOWN A TOTAL INCOME OF RS. 94,74,105. AFTE R SET OFF OF BROUGHT FORWARD BUSINESS LOSS OF ASSESSMENT YEAR 2003-04, THE ASSESSEE DECLARED TOTAL INCOME AT NIL. THUS AS PER PROVISIONS OF SECTION 115JB, THE ASSESSEE WAS RE QUIRED TO COMPUTE BOOK PROFIT. HOWEVER, THE ASSESSEE HAS NOT COMPUTED BOOK PRO FIT WHEREBY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THOUGH THE AO ACCEPTED THE RETURN UNDER SECTION 143(3), SUBSEQUENTLY, HE REOPENED THE ASSE SSMENT UNDER SECTION 147 IN WHICH, HE ASSESSED THE BOOK PROFIT UNDER SECTION 115 JB. THE AO WAS OF THE OPINION THAT THERE IS NO SPECIFIC EXEMPTION IN SECTION 115JB FOR BANKING COMPANY AND SINCE THE KRUG THAI BANK IS A COMPANY FOR THE PUR POSE OF ACT, THE PROVISIONS OF INCOME TAX ACT, WITH REGARDS TO COMPANIES INCLUDING 1 15JB IS APPLICABLE TO ASSESSEE BANK. THE AO THEREFORE, CONCLUDED THAT THE ASSESSEE HA S FURNISHED INACCURATE PARTICULARS LEADING TO CONCEALMENT OF PARTICULARS OF INCOME IN RESPECT OF TAXATION OF ITS INCOME UNDER SECTION 115JB OF THE ACT. PENALTY P ROCEEDINGS UNDER SECTION 271(1)(C) WERE ALSO INITIATED AGAINST THE ASSESSEE AND F INALLY THE AO LEVIED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCO ME. THE ASSESSEE CARRIED THE MATTER IN APPEAL BUT WITHOUT ANY SUCCESS. 3. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTICE OF HEARING SENT THROUGH RPAD. HOWEVER, WE PR OCEED TO DECIDE THE APPEAL EXPARTE AFTER HEARING LEARNED DEPARTMENTAL REPRESENTATIVE A ND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 4. HAVING HEARD THE LEARNED DEPARTMENTAL REPRESENTAT IVE, WE FIND THAT THE REOPENING OF ASSESSMENT WAS CHALLENGED BY THE ASSESSEE BEFOR E THE TRIBUNAL ON THE GROUND THAT SECTION 115JB DID NOT APPLY IN ASSESSEES CASE , IN QUANTUM APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-05, WHEREIN, THE VER Y REASSESSMENT PROCEEDINGS WAS TREATED AS BAD IN LAW. THE TRIBUNAL A LSO HELD THAT NO INCOME HAS I.T.A NO.3931/ MUM/2010 ASSESSMENT YEAR: 2004-05 3 ESCAPED ASSESSMENT IN ITS ORDER REPORTED IN 133 TTJ 435. THEREFORE, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A), WHICH W AS THE VERY BASIS OF LEVYING THE PENALTY, HAS CEASES TO BE DEVOID OF LEGALLY SUSTAINA BLE BASIS. IN VIEW OF THIS, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSE SSING OFFICER TO DELETE THE PENALTY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST, 2011 SD/- (VIJAY PAL RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 10 TH AUGUST, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (APPEALS),10, MUMBAI 4. DIT I(T) , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH ,A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI