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OJMCA/134/2010 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
MISC.
CIVIL APPLICATION No. 134 of 2010
In
TAX
APPEAL No. 230 of
2007
=========================================================
COMMISSIONER
OF INCOME TAX RAJKOT-I - Applicant(s)
Versus
SAHJANAND
SHIPBREAKING CORPORATION - Respondent(s)
=========================================================
Appearance
:
MR
MANISH R BHATT for
Applicant
None for
Respondent
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 12/10/2010
ORAL
ORDER
(Per :
HONOURABLE MR.JUSTICE K.A.PUJ)
The
applicant/original appellant has filed this application for
recalling of the order dated 05.09.2007 passed in Tax Appeal No.230
of 2007 and further praying for re-hearing of the Tax Appeal on
merits.
Heard
Mrs. Mauna M. Bhatt, learned Standing Counsel appearing for the
revenue. She has submitted that the applicant has preferred Tax
Appeal No.230 of 2007 proposing to formulate the following
substantial question of law.
Whether,
on the facts and circumstances of the case, the Appellate Tribunal
was right in reducing the concealed income for the purpose of
penalty leviable under Section 271(1)(c) of the Income Tax Act?
The
said Tax Appeal was disposed of by this Court on 05.09.2007. She
has submitted that there is a mistake on the part of the Counsel
appearing for the applicant in submitting that the issue is
concluded by the decision of the Hon’ble Apex Court in the case of
Virtual Soft Systems Ltd. Vs. CIT
reported in 289 ITR 83.
Mrs.
Bhatt further submitted that in the present case, the assessed
income was determined at Rs.1,92,180/- as against the returned loss
of Rs.6,30,439/- i.e. there was a positive income which was assessed
to tax. She has, therefore, submitted that the ratio laid down by
the Hon’ble Apex Court in the above referred judgment is not
applicable to the facts of the present case. She has further
submitted that the penalty was levied on the ground that the
opponent-assessee had admitted that records were fabricated,
destroyed and mismanaged by the management. She has, therefore,
submitted that the order passed by this Court in the above referred
Tax Appeal is required to be recalled and appeal may be heard afresh
on merits.
We
have considered the submissions made by the learned Standing Counsel
appearing for the revenue and also perused the appeal memo as well
as the order passed earlier in the above referred Tax Appeal. The
Tribunal while disposing of the appeal has clearly observed in its
order that while filing the return of income the assessee has not
claimed any loss and has declared the income at Rs. NIL in the
return. The income which is finally assessed, has to be treated as
concealed income. The tax chargeable on such assessed income could
have been avoided by not filing the return correctly and if the
assessee has not asked for the carry forward loss to be set off
against the future profit, this difference cannot be said to be
concealed income. The Tribunal, therefore, held that the penalty
has to be levied only against the concealed income, and CIT(A) is
justified in giving direction to recompute the tax sought to be
evaded with respect of concealed income of Rs.92,180/- and levy
penalty at 100% on it.
On
the finding recorded by the Tribunal, we are of the view that the
question framed by this Court while disposing of the appeal, on the
basis of the submissions made by the Counsel is not germane from the
order passed by the Tribunal and there is no question of applying
the decision of the Hon’ble Apex Court in the case of Virtual
Soft Systems Ltd. Vs. CIT (supra). To that extent, the order passed
by this Court on 05.09.2007 in Tax Appeal No.230 of 2007 is required
to be modified. However, looking to the direction given by the
Tribunal, we are of the view that no substantial question of law can
be said to have arisen out of the order of the Tribunal and hence
while sustaining the order of dismissal, it is clarified that since
the Tribunal has observed in its order that penalty has to be levied
only on concealed income and CIT (A) was justified in giving
direction to recompute the tax sought to be evaded with respect to
concealed income of Rs.92,180/- and to levy 100% on it, the same
does not require any interference by this Court and it does not give
rise to any substantial question of law.
With this modification
in the order dated 05.09.2007, Miscellaneous Civil Application is
accordingly disposed off.
(K.A.
PUJ, J.)
(HARSHA
DEVANI, J.)
Pankaj
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