Deputy Commissioner of Income-tax, V. M/s. Atlas Copco (I) Ltd., Pune

ITA 1026/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9147 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 1999-2000
• Appeal Filed On: 15-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Bad and doubtful debts

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 1026/PUN/2015 / ASSESSMENT YEAR : 1999-2000 DCIT, CIRCLE - 8, PUNE . /APPELLANT V/S M/S. ATLAS COPCO (I) LIMITED, (FORMERLY KNOWN AS CHICAGO PNEUMATIC (I) LTD.,), SEVANAGAR, MUMBAI-PUNE ROAD, DAPODI, PUNE 411 012 PAN : AAACA4074D . /RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI MUKESH JHA, JCIT / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF CIT(A)-6, PUNE DATED 21-04-2015 FOR THE ASSESSMENT YEAR 1999- 2000 IN CONNECTION WITH THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. 2. REVENUE RAISED 6 GROUNDS AND THE ONLY ISSUE THAT AROSE FROM THE SAID GROUNDS RELATE TO LEVY OF PENALTY OF RS.14,32, 645/- U/S.271(1)(C) OF THE ACT IN RESPECT OF AN ADDITION RELATING TO THE CLAIM OF BAD DEBTS. / DATE OF HEARING :26.07.2017 / DATE OF PRONOUNCEMENT: 28.07.2017 2 ITA NO.1026/PUN/2015 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURING AND TRADING OF COMPRESSORS, TOOLS, SP ARES AND ACCESSORIES. ASSESSEE FILED THE RETURN OF INCOME ON 29-12-1999 D ECLARING TOTAL INCOME OF RS.4,47,29,060/-. AO MADE CERTAIN DISALLOWANCES IN CLUDING DISALLOWANCE OF BAD DEBTS WRITTEN OFF AMOUNTING TO RS.40,93,271/-. SUBSEQUENTLY, THE AO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) AND LEV IED THE PENALTY OF RS.14,32,645/-. CIT(A) DELETED THE PENALTY LEVIED BY THE AO. AGGRIEVED WITH THE ORDER OF CIT(A) THE REVENUE IS IN APPEAL B EFORE US. 4. THERE IS NONE TO REPRESENT THE CASE OF THE ASSES SEE DESPITE THE INTIMATION TO THE ASSESSEE. HOWEVER, CONSIDERING T HE SMALLNESS OF THE ISSUE, WE PROCEED TO ADJUDICATE THE SAME WITH THE H ELP OF LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. 5. AT THE OUTSET, LD. DEPARTMENTAL REPRESENTATIVE F OR THE REVENUE SUBMITTED THAT THE AO MADE ADDITION OF RS.40,93,271 /- ON ACCOUNT OF BAD DEBTS. FOR WANT OF FURNISHING OF DETAILS, THE AO D ENIED THE CLAIM OF THE ASSESSEE. FURTHER, THE AO INITIATED PENALTY PROCEED INGS AS PER LAW AND LEVIED THE PENALTY OF RS.14,32,645/- AS PER THE DI SCUSSION GIVEN IN PARA 9 AND 10 OF THE PENALTY ORDER DATED 30-04-2013. THE CIT(A) CONSIDERED THE FACTS RELATING TO CLAIM OF BAD DEBTS AND HELD THAT THE ASSESSEE HAS FAIRLY DISCLOSED ALL THE RELEVANT DETAILS AND FURNISHED AL L THE PARTICULARS REQUIRED FOR MAKING THE ASSESSMENT IN THE RETURN OF INCOME. AS PER THE DISCUSSION GIVEN IN PARA NOS. 6 AND 7 OF THE ORDER OF CIT(A) T HE PENALTY LEVIED BY THE AO WAS DELETED ON THE GROUND OF FILING OF ALL THE R EQUIRED PARTICULARS IN THE RETURN OF INCOME. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE ON THIS SOLITARY ISSUE AND PERUSED THE MATERIAL ON RECORD AND ALSO THE 3 ITA NO.1026/PUN/2015 CONTENTS OF PARA 6 AND 7 OF THE ORDER OF CIT(A). F OR THE SAKE OF COMPLETENESS, THE SAID FINDINGS OF CIT(A) ARE EXTRA CTED AS UNDER : 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AS WELL AS REPLY OF THE APPELLANT. IN THIS CASE ORIGINALLY THE ASSESSI NG OFFICER MADE DISALLOWANCE OF BAD DEBTS AMOUNTING TO RS. 40,93,37 1/- AS THE APPELLANT FAILED TO PRODUCE NECESSARY DETAILS. THE CASE MADE OUT BY THE ASSESSING OFFICER WAS THAT THE APPELLANT FILED SUBMISSIONS BU T FAILED TO ATTACH ENCLOSURES MENTIONED IN THE COVERING LETTER. THE C IT(A) VERIFIED THE FACTS AND HELD THAT IN SUCH A CASE ASSESSING OFFICER SHOU LD HAVE CONFRONTED THE APPELLANT. NEVER THE LESS CIT(A) VERIFIED THE DOCU MENTS AND DELETED THE ADDITION. THE RELEVANT PARA OF THE ORDER OF CIT(A) -IV, MUMBAI DATED 27.02.2003 IS REPRODUCED AS UNDER: 11. WHEN THE ASSESSING OFFICER HAS NOTICED THAT TH E DETAILS OF THE BAD DEBTS WERE NOT FURNISHED, THE ASSESSING OFF ICER SHOULD HAVE BROUGHT THE SAME TO THE KNOWLEDGE OF THE ASSESSEE A ND OBTAINED THE DETAILS, INSTEAD OF DISALLOWING THE CLAIM IN AR BITRARY MANNER. SINCE NECESSARY DETAILS HAVE BEEN FILLED, FURNISHED AND AS THE ASSESSEE HAS COMPILED WITH THE PROVISION OF SECTION 36(1)(VII) R.W.S 36(2) OF THE ACT, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. 7. WHEN THE MATTER WENT UP BEFORE THE TRIBUNAL, THE ISSUE WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRES H CONSIDERATION. IN SET ASIDE PROCEEDING TOO, THE APPELLANT COULD NOT SUBST ANTIATE THE CLAIM AND ADDITION WAS AGAIN MADE IN RESPECT OF BAD DEBTS OF RS. 40,93,371/-. NOW IN THIS BACK GROUND IT IS TO BE SEEN WHETHER THE AP PELLANT CAN BE FASTENED WITH LIABILITY U/S. 271(1)(C) OF INCOME-TAX ACT PAR TICULARLY WHEN EARLIER COMPANY HAS MERGED WITH THE APPELLANT COMPANY AND I S IN NO POSITION TO SUBMIT THE DETAILS REQUIRED BY THE ASSESSING OFFICE R. THE CASE IS ALSO OF PECULIAR NATURE WHEN THE APPELLANT HAS FAILED TO SU BMIT THE DETAILS BEFORE THE ASSESSING OFFICER BOTH THE TIMES EVEN THOUGH TH E SAME COULD BE FILED BEFORE THE CIT(A), WHO HAS ACKNOWLEDGED IT TOO IN H IS APPELLATE ORDER. THIS BEING SO, CONSIDERING THE TOTALITY OF FACTS IT CANNOT BE SAID THAT THERE WAS FILING OF INACCURATE PARTICULARS OF INCOME. IN THIS CASE ALL THE FACTS WERE DISCLOSED BEFORE THE ASSESSING OFFICER AND JUS T BECAUSE THE CLAIM COULD NOT BE SUBSTANTIATED BEFORE THE ASSESSING OFF ICER (THOUGH SUBSTANTIATED BEFORE CIT(A), IT CANNOT BE SAID THAT IT IS A CASE OF FILING OF INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, IT IS HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN LEVYING PENALTY OF RS. 14,32,645/-. ACCORDINGLY, HE IS DIRECTED TO DELETE THE SAME. THUS, GROUND NO .2 TO 9 ARE ALLOWED. 7. AFTER GOING THROUGH THE CONCLUSIONS DRAWN BY THE CIT(A) WE ARE OF THE OPINION THAT THE ORDER OF CIT(A) IS FAIR AND RE ASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE FROM OUR SIDE. CIT(A) HAS RIG HTLY CONSIDERED THE FACT THAT THERE IS NO DEFECT IN MATTERS OF DISCLOSING OF FACTS IN THE RETURN OF INCOME. FURTHER, NO MATERIAL HAS BEEN PLACED BEFOR E US BY THE REVENUE TO TAKE A CONTRARY DECISION AGAINST THE ORDER OF CIT(A ). THEREFORE, WE AFFIRM 4 ITA NO.1026/PUN/2015 THE FINDINGS GIVEN BY THE CIT(A) ON THIS ISSUE. AC CORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JULY, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 28 TH JULY, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - 6 , PUNE 4. CIT - 6 , PUNE 5. , , A BENCH PUNE; 6. / GUARD FILE.