he shall 10 tax which such person has failed to pay. However, no penalty shall be levied if the assessee proves that there was reasonable cause for failure. he hable to pay as penalty a 14. Prosecution for non payment of dividend distribution tax' [Section 276 B] If a person fails to pay to the credit of the central government the tax payable by him as per section 115-0(2), he shall be punishable with rigorous imprisonment for a term which shall not be less can three months but which may extend to seven years with fine. However, no prosecution proceeding shall be undertaken if the assessee proves that there was reasonable cause for failure. 15. Dividend covered u/s 115-0 not taxable for recepient Any dividend distributed by a domestic company which is subject to dividend distribution tax shall be exempt in the hands of the recepient under section 10(34). ILLUSTRATION 3 726 Rao Ltd. a domestic Ltd. company, provides you following Profit and Loss Account for computation of tax liability for Assessment Year 2015-16. To Purchases 18,75,000 By Sales 75,25,000 To Direct wages 8,45,000 By Closing Stock Alc 1,10,000 To Freight 12,500 To G.P c/d 49,02,500 76,35,000 76,35,000 To Salaries 8,50,000 By G.P b/d 49,02,500 To General exp. 4,35,000 By Dividends from Indian To Sales expenses 2,15,000 domestic co. 17,500 To Director's remn. 8,22,000 To Income tax 1,80,000 To Penalty (excise) 10,000 To Proposed dividend 3,20,000 To Provision for losses of subsidiary company 2,00,000 To Net profits 18,88,000 49,20,000 49,20,000 Additional Information: 1. Purchases include one bill of 60,000 against which payment was made in cash. 2. General expenses include * 15,000 as interest on loan taken from Scheduled Bank. This interest has not been paid so far. 3. As per I.T. Act Brought forward losses As per Books of Alc 2,80,000 1,40.000 Unabsorbed depreciation 1,70,000 50,000 Calculate tax liability