COMMISSIONER OF INCOME TAX DELHI Vs. DCM LIMITED

JUDGEMENT

(1.) This appeal under Section 260A of the Income Tax Act, 1961 (Act, for short) by Commissioner of Income Tax, Delhi-IV (hereinafter referred to as the appellant/Revenue) is directed against order of the Income Tax Appellate Tribunal dated 13th April, 2012 in the case of DCM Limited, and relates to Assessment Year 2002-03.

(2.) The contention of the Revenue is that penalty for concealment under Section 271(1)(c) of the Act was rightly imposed as during the course of the assessment proceedings the assessee had made a wrong claim in respect of loss suffered on writing off loan of Rs.98.55 lacs, which was granted to DCM International Limited, a subsidiary company for acquiring shares of DCM Toyota Limited. DCM International Limited suffered losses and was not in a position to repay the loan and the same was written off as bad or doubtful debt.

(3.) The assessee is a limited company engaged in the business of manufacture of textile yarn, sale etc. and information technology related services. For the year ending 31st March, 2002, the assessee filed original return on 30th October, 2002 showing business loss of Rs.36,60,53,984/- and capital loss of Rs.39,80,76,080/-. This return was processed under Section 143(1) of the Act. Subsequently, the return was revised on 27th February, 2003, declaring business loss of Rs.11,72,50,688/- and capital loss of Rs.13,02,27,759/-. Along with these two returns, the assessee, however, had not filed tax audit report under Section 44AB of the Act. It was, however, stated that a scheme for restructuring of business was pending before the High Court and certain directions had been issued for preparation/presentation of accounts. Subsequently, another revised return was filed on 31st March, 2004 with audited accounts and tax audit report under Section 44AB. In this return, the business loss was revised to Rs.17,18,82,234/- and capital loss was computed at Rs.7,99,82,494/-. This computation was again revised on 30th October, 2004 and the business loss was shown as Rs.15,28,61,385/-.