NDK Metalloys and Infra Pvt. Ltd, Ahmedabad V. ITO,ward-3(1)(1), Ahmedabad

ITA 120/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6089 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-01-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 10-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEELIPKUMAR
• Section: 271(1)(c); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT ITA NO. 120/AHD/2018 ASSESSMENT YEAR : 2013-14 NDK METALLOYS AND INFRA PVT LTD, A-11, ORCHID WHITEFIELD, NR. PALM GREEN, B/H. DIVYABHASKAR PRESS, MAKARBA, AHMEDABAD-380 051 [PAN : AADCN 5252 B] VS. INCOME TAX OFFICER, WARD 3(1)(1), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI DEELIP KUMAR, SR DR / DATE OF HEARING : 29/01/2020 / DATE OF PRONOUNCEMENT: 03/02/2020 / O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAI NST THE ORDER OF LEARNED CIT(A)-9, AHMEDABAD DATED 11.10.2017 PASSED FOR ASS ESSMENT YEAR 2013-14. 2. IN RESPONSE TO THE NOTICE OF HEARING, NO ONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE; HOWEVER, WITH THE ASSISTANCE OF LE ARNED DEPARTMENTAL REPRESENTATIVE, I HAVE GONE THROUGH THE RECORD CARE FULLY AND PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE. 3. IT IS ALSO PERTINENT TO OBSERVE THAT CONSISTENTL Y FOR THE LAST 2-3 OCCASIONS NOBODY IS APPEARING ON BEHALF OF THE ASSESSEE. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(A) HAS ERRED IN CONFIR MING THE PENALTY OF RS.1,31,000/-, IMPOSED BY THE ASSESSING OFFICER UND ER SECTION 271(1)(C) OF THE ACT. A PERUSAL OF THE RECORD WOULD INDICATE THAT T HE ASSESSEE HAS FILED ITS RETURN OF INCOME ELECTRONICALLY ON 29.09.2013 DECLA RING TOTAL INCOME OF RS.11,62,730/-. ON SCRUTINY OF THE ACCOUNTS, IT RE VEALED TO THE ASSESSING OFFICER SMC-ITA NO. 120/AHD/2018 NDK METALLOYS AND INFRA PVT LTD VS. ITO FOR AY: 2013-14 2 THAT THE ASSESSEE HAS CLAIMED INTEREST EXPENSES OF RS.27,86,828/-. ON FURTHER PROBE, IT WAS FOUND THAT THE ASSESSEE HAS ADVANCED RS.74,22,905/- WITHOUT CHARGING OF ANY INTEREST. SUCH ADVANCES WERE CONSI DERED FOR NON-BUSINESS PURPOSES AND ACCORDINGLY INTEREST EXPENDITURE RELAT ABLE TO SUCH INTEREST BEARING FUNDS GIVEN FOR NON-BUSINESS PURPOSES WAS C ALCULATED BY THE ASSESSING OFFICER AND DISALLOWED. THIS DISALLOWANC E WAS WORKED OUT AT RS.4,23,570/-. 4. THE ASSESSING OFFICER HAS INITIATED PENALTY PROC EEDINGS AND ULTIMATELY IMPOSED A PENALTY OF RS.1,31,000/- UNDER SECTION 27 1(1)(C) OF THE ACT. 5. APPEAL TO THE LEARNED CIT(A) DID NOT BRING ANY R ELIEF TO THE ASSESSEE. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHE N THE ASSESSEE WAS CONFRONTED WITH REGARD TO THIS ISSUE, THEN THE ASSE SSEE HAS GIVEN A REPLY SUBMITTING THEREIN THAT THE ADVANCES OF RS.40,60,00 0/- WERE GIVEN TO JAYBEE ORGANIZERS & DEVELOPERS PVT LTD. THIS AMOUNT WAS G IVEN ON 15.03.2013 FOR A PERIOD OF 15 DAYS ONLY. IT WAS GIVEN FOR JOINT TEN DER APPLICATION. WHEN NO ALLOTMENT WAS MADE, IT WAS RETURNED TO THE ASSESSEE . THUS, ACCORDING TO THE ASSESSEE, IT WAS NOT IN THE NATURE OF LOAN RATHER IT WAS FOR THE PURPOSE OF BUSINESS. SIMILARLY, WITH REGARD TO OTHER TWO LOANS , IT WAS CONTENDED THAT THESE WERE ALSO GIVEN FOR THE PURPOSE OF BUSINESS FOR GIVING A JOINT TENDER APPLI CATION. LEARNED ASSESSING OFFICER HAS REJECTED THIS EXPLANA TION OF THE ASSESSEE ON THE GROUND THAT IT FAILED TO SUBMIT THE REQUISITE DETAI LS, I.E. COPY OF THE JOINT TENDER APPLICATION ETC. ON DUE CONSIDERATION OF THE ABOVE FACTS, I AM OF THE VIEW THAT THE ASSESSEE DOES NOT DESERVE TO BE VISITED WITH PE NALTY. IT HAS PLEADED THAT THE ADVANCES WERE GIVEN IN THE CAPACITY OF A CO-APPLICA NT FOR TENDER. IT WAS NOT A LOAN. THIS EXPLANATION OF THE ASSESSEE WAS NOT FOUN D TO BE FALSE BY THE ASSESSING OFFICER FOR THE PURPOSE OF INVOKING EXPLANATION 1 APPENDED TO SMC-ITA NO. 120/AHD/2018 NDK METALLOYS AND INFRA PVT LTD VS. ITO FOR AY: 2013-14 3 SECTION 271(1)(C) OF THE ACT. THEREFORE, TO MY MIN D, THE PENALTY IS NOT SUSTAINABLE. I ACCORDINGLY ALLOW THIS APPEAL OF THE ASSESSEE AND DELETE THE PENALTY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 3 RD FEBRUARY, 2020 AT AHMEDABAD. SD/- (RAJPAL YADAV) VICE PRESIDENT AHMEDABAD; DATED 03/02/2020 *BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. ! %% , , / DR, ITAT, AHMEDABAD 6. , / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) %, / ITAT, AHMEDABAD 1. DATE OF DICTATION- ..03.02.2020. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE D ICTATING MEMBER .03.02.2020.. OTHER MEMBER 03.02.2020. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S ./P.S. - 03.02.2020.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DI CTATING MEMBER FOR PRONOUNCEMENT 03.02.2020. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK03.0 2.2020 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER