Held that the facts not being disputed, and being substantiated by the assessment order also, the huge loss converted into profits were liable for levy of penalty as per the provisions of law. Explanation 4 to section 271(1)(c) of the Act provides for a situation where the loss returned by the assessee is converted into profits, explaining that for quantifying the amount of penalty leviable in such a situation, the tax sought to be evaded would include the losses so reduced/converted into profits. In view of the provision requiring levy of penalty even on the loss, which is either reduced on account of assessment or converted into profits, there was no error in the order of the Commissioner (Appeals) confirming the levy of penalty on the portion of the loss converted into profits amounting to Rs. (-) 2,17,93,121.(AY.2012-13)