M/S Speed Automobiles Pvt. Ltd, Indore V. THE ACIT CIRCLE 5(1), Indore

ITA 1053/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2311 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 19-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MOURYA
• Assessee Lawyers: G K RATHI
• Keywords: Principle of natural justice; Initiation of penalty proceedings; Bad and doubtful debts

Judgement Text

SPEED AUTOMOBILES ITA 1053/IND/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, HONBLE JUDICIAL MEMBER AND SHRI MANISH BORAD, HONBLE ACCOUNTANT MEM BER ITA NO. 1053/IND/2016 A.Y. 2007-08 SPEED AUTOMOBILES PVT. LTD., INDORE ::: APPELLANT VS ACIT 5(1) INDORE ::: RESPONDENT APPELLANT BY SHRI G.K. RATHI RESPONDENT BY SHRI R.P. MOURYA DATE OF HEARING 15.2.201 8 DATE OF PRONOUNCEMENT 2 8 .2.201 8 O R D E R PER SHRI MANISH BORAD, AM THIS APPEAL OF THE ASSESSEE RELATING TO THE ASSESSMENT YEAR 2007-08 IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-II, INDORE, DATED 30.6.2016 WHICH IS ARISING OUT OF THE ORDER U/S 143( 3) OF THE ACT DATED 31.12.2009 FRAMED BY THE ITO 3(1), INDO RE. SPEED AUTOMOBILES ITA 1053/IND/2016 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) IS NOT AS PER LAW WHEN THE INCOME IN THE HEAD CAPITAL GAIN IS COMPUTED CORRECTLY. THE AMOUNT RECEIVABLE AGAINST SALE BECAME IRRECOVERABLE AND HENCE CLAIMED AS (LOSS OF INCOME EARNED) BAD DEBTS. NO PARTICULARS OF INCOME WERE CONCEALED AND THAT ALL THE MATERIAL FACTS OF THE CASE WERE DISCLOSED. THAT, THE RETURN OF INCOME U/S 139(1) COULD NOT BE FILED AS THE BOOKS OF ACCOUNTS AND DOCUMENTS WERE SEIZED BY THE COMMERCIAL TAX DEPARTMENT AS MENTIONED IN THE FACTS OF THE CASE. 2. THAT THE LD. ASSESSING OFFICER ERRED TO CALCULAT E TAX SOUGHT TO BE EVADED IN ORDER U/S 271(1)(C) DATED SPEED AUTOMOBILES ITA 1053/IND/2016 3 25.3.2015 AT HIGHER SIDE I.E. @ 33.66% ON THE LONG TERM CAPITAL GAIN WHICH IS TO BE CHARGED @ 20%. 3. BRIEFLY STATED, THE FACTS, AS CULLED OUT FROM RECOR D, ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY. THE ASSESSMENT U/S 143(3)/153C OF THE ACT WAS COMPLETED O N 31.12.2009 ASSESSING THE INCOME OF THE ASSESSEE AT RS.95,00,289/- AFTER MAKING VARIOUS ADDITIONS. SUBSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT AND PENALTY OF RS.96 LACS WAS IMP OSED FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHICH INCLUDED INCORRECT COMPUTATION OF CAPITAL GAIN AND DISALLOWANCE OF BAD DEBTS IN RESPECT OF NON-RECEIPT OF SALE CONSIDERATION OF ASSETS. 3. AGAINST THE PENALTY ORDER THE ASSESSEE PREFERRED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) BUT FAILED TO SUCCEED. NOW THE ASSESSEE IS IN APPEAL BE FORE THE TRIBUNAL. SPEED AUTOMOBILES ITA 1053/IND/2016 4 4. AT THE OUTSET OF THE HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED ASSESSING OFFI CER HAS NOT GIVEN ANY OPPORTUNITY OF HEARING WHICH IS IN BREACH OF NATURAL JUSTICE. HE FURTHER SUBMITTED THAT T HE ALLEGED PENALTY HAS BEEN IMPOSED DISALLOWING THE CLAIM O F THE ASSESSEE EVEN WHEN ALL NECESSARY DETAILS WERE PLACED ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE FURTH ER URGED FOR PROVIDING ONE MORE OPPORTUNITY TO APPEAR BE FORE THE ASSESSING OFFICER. THE LEARNED DR RAISED NO OBJE CTION TO THE SAME. 5. WE HAVE HEARD BOTH THE SIDES AND CAREFULLY PERUSED THE MATERIAL AVAILABLE ON RECORD, INTER ALIA, IMPUGNED ASSESSMENT ORDER, ORDER OF THE LEARNED CIT(A) ALONGWIT H PAPER BOOK FILED BY THE ASSESSEE. THE ASSESSEES SOLE GROUND IS AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS) CONFIRMING THE PENALTY OF RS. 96,00,000 /- IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. THE PE NALTY SPEED AUTOMOBILES ITA 1053/IND/2016 5 HAS BEEN IMPOSED FOR FURNISHING INACCURATE PARTICULARS O F INCOME TOWARDS INCORRECT COMPUTATION OF CAPITAL GAINS AN D DISALLOWANCE OF BAD DEBT CLAIM. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALLEGE D THAT NO SUFFICIENT OPPORTUNITY WAS PROVIDED BY THE ASSESSING OFFICER FOR FILING NECESSARY DETAILS IN SUP PORT OF ITS CLAIM. THE REVENUE HAS NOT RAISED ANY OBJECTION TO THIS PLEA. WE, THEREFORE, SET ASIDE THE ISSUE RAISED IN THI S APPEAL TO THE FILE OF THE ASSESSING OFFICER FOR DE NO VO ADJUDICATION. NEEDLESS TO MENTION THAT PROPER OPPORTU NITY OF BEING HEARD BE AFFORDED TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 28 FEBRUARY, 2018. SD SD (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER 28 TH FEBRUARY, 2018 SPEED AUTOMOBILES ITA 1053/IND/2016 6 DN/- COPY TO APPELLANT/RESPODENT/PR.CIT/CIT(A)/DR/GUAR D FILE