Kalavati Finance Ltd., Ahmedabad V. The ACIT.,(OSD)-Range-4, Ahmedabad

ITA 1215/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76780 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANISTA
• Keywords: Gift; Bad and doubtful debts
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 1215/AHD/2011 (ASSESSMENT Y EAR: 2006-07) KALAVATI FINANCE LTD. 172, NEW CLOTH MARKET, AHMEDABAD 380001 V/S ACIT(OSD)-1, RANGE-4 AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AACCK 0030F APPELLANT BY : WRITTEN SUBMISSIONS RESPONDENT BY : SHRI R.K. DHANISTA, SR. D.R. ( )/ ORDER DATE OF HEARING : 15-05-2014 DATE OF PRONOUNCEMENT : 30 -05-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-XX, AHMEDABAD DATED 08.11.2010 FOR A.Y. 2006-07. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE B USINESS OF CHEQUE DISCOUNTING, INVESTMENTS AND FINANCE. ASSESSEE FILE D ITS RETURN OF INCOME FOR A.Y. 06-07 ON 19.12.2006 DECLARING TOTAL INCOME OF RS. 12,86,583/-. ITA NO 1215/ AHD/2011 . A.Y. 2006- 07 2 SUBSEQUENTLY, THE ASSESSMENT WAS FRAMED UNDER SECTI ON 143(3) VIDE ORDER DATED 08.12.2008 AND THE TOTAL INCOME WAS ASSESSED AT RS. 26,00,533/- BY DISALLOWING EXPENSES UNDER SECTION 14A, GIFT EXPENS ES AND BAD DEBTS WRITTEN OFF. ON THE AFORESAID DISALLOWANCE MADE, A. O VIDE ORDER DATED 23.06.2009 LEVIED PENALTY OF RS. 4,42,277/- U/S 271 (1)(C). AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFOR E CIT(A). CIT(A) DELETED THE PENALTY LEVIED ON THE DISALLOWANCE U/S. 14A AND THE GIFT EXPENSES BUT CONFIRMED PENALTY IN RESPECT OF BAD DE BTS WRITTEN OFF. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), THE ASS ESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN D:- 1. THE LEARNED ASSESSING OFFICER HAS GROSSLY ERRED IN IMPOSING PENALTY U/S. 271(1)(C) OF THE ACT IN RESPECT OF DISALLOWANCE OF BAD DEBTS IN THE ASSESSM ENT U/S. 143(3). 4. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE, BUT HOWEVER WRITTEN SUBMISSIONS WERE FILED BY THE ASSES SEE. IN THE WRITTEN SUBMISSIONS, IT WAS SUBMITTED THAT AGAINST THE QUAN TUM ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF BAD DEBTS WRITTEN OFF, A SSESSEE HAD PREFERRED APPEAL BEFORE TRIBUNAL. HONBLE ITAT VIDE ORDER DAT ED 19 TH MAY, 2011 (ITA NO. 1963/AHD/2009) DELETED THE DISALLOWANCE MA DE ON ACCOUNT OF BAD DEBTS AND ALLOWED THE APPEAL OF THE ASSESSEE. I T WAS FURTHER SUBMITTED THAT SINCE THE QUANTUM ON WHICH THE PENAL TY HAS BEEN LEVIED ITSELF IS DELETED, THE PENALTY ORDER DOES NOT SURVI VE. THE ASSESSEE ALSO PLACED ON RECORD, THE COPY OF THE AFORESAID DECISIO N OF THE TRIBUNAL. THE LD. D.R. HOWEVER RELIED ON THE ORDER OF CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT WHILE FRAMING THE ASSESSMENT UNDER SEC TION 143(3) A.O. HAD ITA NO 1215/ AHD/2011 . A.Y. 2006- 07 3 DISALLOWED THE CLAIM OF BAD DEBTS AMOUNTING TO RS. 12,72,517/- AND ON THE AFORESAID DISALLOWANCE LEVIED PENALTY UNDER SEC TION 271(1)(C) OF THE ACT. AGAINST THE QUANTUM ADDITION OF CLAIM OF BAD D EBTS MADE BY A.O, ASSESSEE PREFERRED APPEAL BEFORE TRIBUNAL. THE APPE AL WAS DECIDED IN FAVOUR OF THE ASSESSEE BY ALLOWING THE CLAIM OF BAD DEBTS BY ORDER OF HONBLE TRIBUNAL DATED 19 TH MAY, 2011. SINCE THE QUANTUM ADDITION ON WHICH THE PENALTY U/S. 271(1)(C) WAS LEVIED ITSELF HAS BEEN DELETED, WE ARE OF THE VIEW THAT NO PENALTY ON THE AFORESAID DISALL OWANCE CAN BE MADE. WE THUS DIRECT ITS DELETION. THUS THIS GROUND OF AS SESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN OPEN COURT ON 30 - 05 - 2014. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD