GOPAL DAS KHANDELWAL, Jaipur V. ACIT, Jaipur

ITA 128/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5221 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S DAGUR ADD CIT DHK
• Assessee Lawyers: G G MUNDRA
• Keywords: Wrong claim; Bad and doubtful debts; Difference of opinion
• Section: 143(3); 6

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.128/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 SHRI GOPALDAS KHANDELWAL P/O M/S SUMANGAL GEMS, 1839 BARA GANGORE KA RASTA, JAIUR CUKE VS. THE ACIT, CIRCLE-1, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ADRPK 5823 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI G.G. MUNDRA CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.S. DAGUR (ADD. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26.07.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 01/08/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-I, JAIPUR DATED 21.12.2015 WHEREIN THE ASSESSEE HAS TA KEN FOLLOWING GROUND OF APPEAL: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) IS WRONG, UNJUST AND HAS ERRED IN LAW IN CONFIRMING PE NALTY OF RS.1,73,350/- IMPOSED BY THE LD. AO U/S 271(1)(C) OF THE IT ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT HAD ADVANCED INTEREST BEING LOAN TO SHRI RAJEEV KHATTAR DURING THE COURS E OF HIS MONEY LENDING ACTIVITIES/BUSINESS. THE PRESENT WHEREABOUTS OF S HRI RAJEEV KHATTAR WERE NOT ITA NO. 128/JP/2016 GOPALDAS KHANDELWAL, JAIPUR VS. ACIT, CIRCLE-1, JA IPUR 2 KNOWN. THEREFORE, THE AMOUNT WAS WRITTEN OFF AS BA D DEBT. THE AO IN THE ASSESSMENT ORDER DISALLOWED THE CLAIM OF BAD DEBTS AMOUNTING TO RS. 5,15,000/- AND PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT 1961 WERE INITIATED AGAINST THE ASSESSEE ON THIS ISSUE. IT WAS FOUND BY AO THAT THE ASSESSEE HAS DELIBERATELY CLAIMED THE BAD DEBTS ON THE PRETEXT THAT HE IS DOING MONEY LENDING BUSINESS WHEREAS NO SUCH BUSIN ESS ACTIVITIES WAS DONE BY THE ASSESSEE DURING THE YEAR OR EVEN IN EARLIER YEAR. FURTHER THE ASSESSEE WAS ALSO NOT HAVING ANY LICENCE TO DO THE MONEY LE NDING BUSINESS. THE ASSESSEE ALSO COULD NOT PRODUCE ANY EVIDENCE IN SUP PORT OF ANY EFFORTS MADE BY HIM TO RECOVER THE SAID AMOUNT. FURTHER THE AS SESSEE DOES NOT FULFIL THE BASIC PREREQUISITE OF SUB SECTION 2(I) OF SECTION 3 6 OF THE IT ACT AS IT HAD FAILED TO PROVE THAT THE DEBT WAS REFLECTED AS HIS INCOME IN ANY PREVIOUS ASSESSMENT YEAR. IN VIEW OF THE ABOVE, IT IS CRYSTAL CLEAR TH AT THE ASSESSEE DELIBERATELY CLAIMED THE ABOVE BAD DEBT TO REDUCE HIS TAX LIABIL ITY. THEREFORE, THE CASES RELIED UPON BY THE ASSESSEE DO NOT APPLY IN THIS CA SE AND PENALTY WAS LEVIED. 2.1 THE RELEVANT FINDINGS OF LD CIT(A) ARE AS UNDER : IV) DURING THE APPELLATE PROCEEDINGS, THE APPELLAN T REITERATED ITS SUBMISSIONS MADE BEFORE THE AO. DURING THE APPELLAT E PROCEEDINGS, THE APPELLANT WAS REQUIRED TO SHOW THAT THE AMOUNT OF B AD DEBT CLAIMED WAS TAKEN INTO ACCOUNTS AS INCOME EITHER DURING THE YEAR UNDER CONSIDERATION OR EARLIER YEAR BUT OF NO AVAIL. IT IS THEREFORE, HELD THAT THE CLAIM OF BAD DEBT WAS PATENTLY WRONG WHEN THE BASIC PERQUISITE FOR CLAIMING BAD DEBTS AS REQUIRED U/S 36(2)(I)OF THE A CT WAS NOT EVEN FULFILLED. V) IN THE INSTANT CASE UNDER CONSIDERATION, IT HAS BEEN HELD THAT THE CLAIM OF BAD DEBT AMOUNTING TO RS. 5,15,000/- WAS PATENTL Y WRONG OR ITA NO. 128/JP/2016 GOPALDAS KHANDELWAL, JAIPUR VS. ACIT, CIRCLE-1, JA IPUR 3 INADMISSIBLE, THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. N.G.TECHN OLOGIES (SUPRA), IT IS HELD THAT THE APPELLANT HAS CONCEALED ITS INCOME AN D THUS IS LIABLE TO PENALTY U/S 271(1)(C) OF THE ACT AND THUS THE AO WA S JUSTIFIED IN IMPOSING PENALTY OF RS. 1,73,350/- U/S 271(1)(C) OF THE ACT. 2.2 THE LD.AR SUBMITTED THAT THE APPELLANT IS AN IN DIVIDUAL DERIVING INCOME FROM BUSINESS, RENT, SHARE IN PARTNERSHIP FIRM, CAP ITAL GAIN AND INCOME FROM OTHER SOURCES. THE INCOME FROM BUSINESS IS DERIVED FROM TWO PROPRIETARY CONCERNS VIZ. (I) M/S GOPAL DAS & CO. WHICH IS ENG AGED IN BUSINESS OF GEMS AND STONES AND (II) M/S GOPALDAS SONKIA WHICH IS EN GAGED IN SHARE TRADING, FUTURE & OPTION AND LENDING OF MONEY ON INTEREST. THE APPELLANT FILED RETURN OF INCOME DECLARING INCOME OF RS.8,59,950/-. IN P &L ACCOUNT ASSESSEE CLAIMED BAD DEBTS OF RS.5,15,000/- IN RESPECT TO BA D DEBT WRITTEN OFF IN ACCOUNTS PERTAINING TO LOAN ADVANCED ON INTEREST T O A PARTY WHICH CONSISTED PRINCIPAL SUM OR RS.5,00,000/- LENT TO HIM AND INTE REST CHARGED BY ASSESSEE RS. 15,000/- WHICH AMOUNTS COULD NOT BE RECOVERED. 2.3 THE LD AR SUBMITTED THE FIGURES OF ADVANCES /LO AN GIVEN AND INTEREST INCOME EARNED IN LAST THREE YEARS ARE AS FOLLOWS. A.Y. LOANS & ADVANCES (RS) INTEREST INCOME (RS) 2005-06 RS. 4,05,50,073/- RS. 2,81,130/- 2006-07 RS. 4,79,29,540/- RS. 29,14,960/- 2007-08 RS.4,27,71,517/- RS. 24,68,314/- LD AR SUBMITTED THAT THE FIGURES PROVE THAT THE ASS ESSEE IS ENGAGED IN BUSINESS OF LENDING MONEY ALSO. AS PER PROVISIONS OF SECTION 36(2)(I) DEDUCTION FOR BAD DEBTS IS ALSO ALLOWABLE IF IT REPRESENT MONEY LENT IN THE ORDINARY COURSE OF BUSINESS OF BANKING OR MONEY LENDING WHICH IS CARR IED BY THE ASSESSEE. IT IS SUBMITTED THAT INTEREST INCOME OF EARLIER YEARS AND INTEREST ARISING OUT OF THE ITA NO. 128/JP/2016 GOPALDAS KHANDELWAL, JAIPUR VS. ACIT, CIRCLE-1, JA IPUR 4 ABOVE TRANSACTION WAS ACCEPTED AND ASSESSED AS BUSI NESS INCOME IN ASSESSMENT OF ALL THE YEARS. THUS IT IS PROVED ON FACTS THAT ASSESSEE IS CARRYING ON BUSINESS OF LENDING MONEY IN ORDINARY COURSE. IN COMMERCIAL WORLD LENDING OF MONEY FROM ONE PERSON TO OTHER PERSON IS OFTEN D ONE AND IF THE ACTIVITY IS CONTINUOUS & SYSTEMATIC, IT IS BUSINESS OF LENDING MONEY. THE MONEY LENDING LICENCE FOR SUCH COMMERCIAL TYPE LENDING OF MONEY I S NOT REQUIRED. SECTION 36(2) ONLY REQUIRES THAT DEBT SHOULD REPRESENT MONE Y LENT IN THE ORDINARY COURSE OF BUSINESS OF BANKING OR MONEY LENDING WHIC H IS CARRIED ON BY THE ASSESEE. THE HOLDING OF MONEY LENDING LICENCE IS N EITHER REQUIREMENT OF PROVISION NOR SUCH LICENCE IS REQUIRED FOR MONEY L ENT OUT IN ORDINARY COURSE OF BUSINESS OF LENDING MONEY. THE LEGAL VIEW IS SUPPOR TED FROM THE DECISION IN CASE OF PENISULAR PLANTATION LTD. VS. ACIT(2014) 26 3 TAXMAN 258 (KER)(MAG.) THE ORDER OF CIT(A) REJECTING QUANTUM APPEAL OF ASS ESSEE WAS NOT BY FULLY APPRECIATING THE ABOVE CONTENTION AND SAID JUDGEM ENT OF ITAT. IN FURTHER APPEAL AGAINST THE SAID ORDER OF CIT(A) THE HONBL E ITAT WHILE DISMISSING THE APPEAL HELD THAT CONDITION OF SECTION 36(2)(I) NOT COMPLIED BY THE ASSESSEE AS THERE WAS NO EVIDENCE ON RECORD TO SHOW THAT SUCH D EBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING INCOME OF ASSE SSEE OF THE PREVIOUS YEAR BUT THE PROVISIONS OF SECTION 36(2)(I) STATES THAT SUCH DEBT OR PART HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING INCOME OF THE ASSES SEE OF THE PREVIOUS YEAR IN WHICH SUCH DEBT OR PART THEREOF IS WRITTEN OFF O R OF AN EARLIER PREVIOUS YEAR OR REPRESENTS MONEY LENT IN THE ORDINARY COURSE OF BUSINESS OF BANK OR MONEY LENDING WHICH IS CARRIED ON BY ASSESSEE. IT IS SUB MITTED THAT ASSESSEE COMPLIES THE CONDITION AS THE MONEY LENT WAS OUT OF CURRENT PROFITS OF EARLIER YEAR AND/OR ACCUMULATED CAPITAL OF ASSESSEE WHICH CONSIS TS OF PROFITS OF EARLIER YEARS AND ALSO MONEY LENT WAS IN ORDINARY COURSE OF BUSINESS OF MONEY LENDING WHICH IS CARRIED ON BY ASSESSEE AS EXPLAINED ABOVE. THUS FINDING OF APPELLATE ITA NO. 128/JP/2016 GOPALDAS KHANDELWAL, JAIPUR VS. ACIT, CIRCLE-1, JA IPUR 5 AUTHORITIES CANNOT BE APPLIED IN PENALTY PROCEEDING S WITHOUT TAKING INTO ACCOUNT THE ABOVE CONTENTION OF ASSESSEE. 2.4 THE LD AR FURTHER SUBMITTED THAT THE CLAIM OF ASESSEE WAS BONAFIDE AND WAS NOT FOUND FALSE BY ANY AUTHORITY. THE CLAIM GO T DISALLOWED ONLY BECAUSE OF DIFFERENT INTERPRETATION ADOPTED BY AUTHORITIES THA N THAT ADOPTED BY ASSESSEE WHILE MAKING THE CLAIM. THE ASSESSEE FURNISHED ALL THE PARTICULARS ALONGWITH RETURN OF INCOME AND IN ASSESSMENT PROCEEDINGS TRUL Y AND CORRECTLY. THUS THERE WAS NO CONCEALMENT OF INCOME BY ASSESSEE AS HELD BY LD. AO BUT IT WAS A CASE OF BONAFIDE CLAIM MADE BY ASSESSEE WHICH WAS NOT FOUND SUSTAINABLE IN LAW. RELIANCE IS PLACED IN THE DECISION OF HONBL E SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. 322 ITR 158. 2.5 THE LD AR FURTHER SUBMITTED THAT THERE ARE PLET HORA OF DECISIONS OF JUDICIAL COURTS/TRIBUNALS THAT IN ABSENCE OF ANY F INDING THAT EXPLANATION OFFERED BY ASSESSEE FOR MAKING WRONG CLAIM IS NOT B ONAFIDE, IMPOSITION OF PENALTY U/S 271(1)(C) IS NOT LAWFUL (CIT VS. SARDA R MANGANESE AND ORE(2014) 362 ITR160. IN SUCH CASE NO PENALTY U/S 271(10(C) IS LEVIABLE. FURTHER IT IS ALSO SUBMITTED THAT IN CASE OF CIT VS. BACARDI MARTINI INDIA LTD. (2007) 288 ITR 585 IT IS HELD THAT MERELY BECAUSE THERE IS DIFFERENCE OF OPINION FOR ALLOWING CERTAIN EXPENDITURE BETWEEN ASSESSEE AND ASSESSING OFFICER, IT CANNOT BE SAID THAT ASSESSEE HAD INTENTION TO CONCEAL INCOME. SIMILARL Y WAS HELD IN CASE OF BALAJI VEGETABLE PRODUCTS P. LTD. VS. CIT(2007) 290 ITR 1 72 AND IN CIT VS. MANIBHAI & BROS. (2007) 294 ITR 501. FURTHER IN THE CASE OF CIT VS. HARSHVARDHAN CHEMICAL AND MINERALS LTD. 259 ITR 212 (RAJ.) IT W AS STATED THAT IF THE CLAIM OF DEDUCTION OR AN EXPENDITURE IS EITHER DEBATABLE OR CONTROVERSIAL OR EVEN ARGUABLE, IN SUCH CASES IT CANNOT BE SAID THAT ASS ESSEE HAS CONCEALED ANY ITA NO. 128/JP/2016 GOPALDAS KHANDELWAL, JAIPUR VS. ACIT, CIRCLE-1, JA IPUR 6 INCOME OR FURNISHED INACCURATE PARTICULARS FOR EVAS ION OF TAX AND HENCE PENALTY CANNOT BE LEVIED. THE CIT(A) IN IMPUGNED ORDER REL IED ON CIT VS. N.G. TECHNOLOGIES LTD.(2015)370 ITR 7 WHICH IS DISTINGUI SHABLE ON FACTS AS THAT CASE THE COURT HELD THE CLAIM OF ASSSSEE AS POSITIVELY I NCORRECT AND CONTRARY TO PRINCIPLE OF ACCOUNTANCY WHICH IS NOT THE FACTS OF PRESENT CASE AS LEGAL PROVISION APPLIED IN QUANTUM PROCEEDINGS WAS CAPABL E OF TWO INTERPRETATION AND DIVERGENT VIEWS ARE PLAUSIBLE HENCE THE CLAIM O F ASSESSEE AND HIS EXPLANATION WAS BONAFIDE AND HENCE PROVISION OF SEC TION 271(1(C) ARE NOT APPLICABLE IN THE CASE. 2.6 THE LD DR IS HEARD WHO HAS RELIED UPON THE ORDE R OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE CLAIM OF THE APP ELLANT HAS RIGHTLY BEEN DENIED BY THE HONBLE ITAT, HENCE IT WAS A CLEAR CA SE OF LEVY OF PENALTY WHICH HAS RIGHTLY BEEN LEVIED BY THE AO. 2.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF RECORDS, IT IS NOTED THAT IN P&L ACCOUNT PREPARED FOR M/S GOPAL DAS SONKIA, ASSESSEE HAD CLAIMED BAD DEBT S OF RS.5,15,000/-. IT CONSISTS OF BAD DEBT WRITTEN OFF IN BOOKS OF ACCOUN TS PERTAINING TO AMOUNT ADVANCED BY WAY OF LOAN TO SHRI RAJEEV KHATTAR AMOU NTING TO RS.5,00,000/- AND INTEREST THEREON CHARGED BY ASSESSEE AMOUNTING TO R S. 15,000/-. IN THE BALANCE SHEET PREPARED FOR M/S GOPAL DAS SONKIA FOR IMMEDIATELY PRECEDING FINANCIAL YEAR 2005-06 (AY 2006-07), AN AMOUNT OF R S 5,15,000 HAS BEEN SHOWN OUTSTANDING UNDER THE HEAD LOANS TOTALLING TO RS 47,929,540. SIMILAR IS THE POSITION IN THE BALANCE SHEET PREPARED FOR THE FINA NCIAL YEAR 2004-05 (AY 2005- 06). THE ASSESSMENTS HAVE ALSO BEEN COMPLETED FOR BOTH OF THESE YEARS U/S 143(3) WHERE THE ABOVE BALANCE SHEETS WERE PLACED O N RECORD. THE LD AR HAS ITA NO. 128/JP/2016 GOPALDAS KHANDELWAL, JAIPUR VS. ACIT, CIRCLE-1, JA IPUR 7 FURTHER SUBMITTED A STATEMENT OF ACCOUNT OF SHRI RA JEEV KHATTAR RIGHT FROM YEAR 2000 AND ONWARDS WHERE THE SAID AMOUNT OF RS 5 15,000 HAS BEEN SHOWN AS OUTSTANDING AND IN THE YEAR 2007, THE SAME HAS B EEN WRITTEN OFF AS BAD DEBT AND BALANCE IN THE ACCOUNT HAS BEEN REDUCED TO NIL. THE ABOVE FACTS SHOWS CLEARLY THAT THE APPELLANT HAD LENT THIS MONEY TO S HRI RAJEEV KHATTAR AND THE SAME HAS BEEN REGULARLY BEEN DISCLOSED IN THE BALAN CE SHEETS RIGHT FROM THE YEAR THE AMOUNT WAS LENT TO THE YEAR UNDER CONSIDER ATION WHEN THE AMOUNT WAS FINALLY WRITTEN OFF. IN LIGHT OF THIS, IT CANN OT BE SAID THAT THERE IS FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE OR CONCEAL TH E TRUE PARTICULARS OF SUCH TRANSACTION. 2.8 NOW COMING TO THE QUESTION WHETHER THE CLAIM OF THE APPELLANT WAS PATENTLY WRONG UNDER SECTION 36(1)(VII) READ WITH S ECTION 36(2) OF THE ACT. THE COORDINATE BENCH IN ITS ORDER DATED 28.08.2014 HAS HELD THAT THE ASSESSEE HAS MADE COMPLIANCE OF SECTION 36(1)(VII) OF THE ACT BU T HAS NOT FULFILLED THE CONDITION OF 36(2)(I) OF THE ACT AS THERE WAS NO EV IDENCE ON RECORD TO SHOW THAT SUCH DEBT OR PART THEREOF WAS TAKEN INTO ACCOU NT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR. 2.9 AS PER PROVISIONS OF SECTION36(2)(I) DEDUCTION FOR BAD DEBTS IS ALLOWABLE ON SATISFACTION OF EITHER OF FOLLOWING TWO CONDITIO NS: 1. WHERE SUCH DEBT OR PART THEREOF WAS TAKEN INTO ACCO UNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARLIER PREVIOUS YEAR, OR 2. IF IT REPRESENT MONEY LENT IN THE ORDINARY COURSE O F BUSINESS OF BANKING OR MONEY LENDING WHICH IS CARRIED BY THE ASSESSEE. ITA NO. 128/JP/2016 GOPALDAS KHANDELWAL, JAIPUR VS. ACIT, CIRCLE-1, JA IPUR 8 2.10 AS WE HAVE NOTED ABOVE, THE LD AR SUBMITTED TH E FIGURES OF ADVANCES /LOAN GIVEN AND INTEREST INCOME EARNED IN LAST THRE E YEARS. APPARENTLY SUCH INTEREST INCOME HAS BEEN ASSESSED TO TAX AS WELL, A FACT WHICH REMAINS UNCONTROVERTED. THEREFORE, THE CONTENTION OF THE A PPELLANT THAT HE WAS ENGAGED IN BUSINESS OF MONEY LENDING BESIDES OTHER BUSINESS ACTIVITIES CANNOT BE NEGATED IGNORING THE ABOVE FACTS WHICH ARE APPAR ENT FROM RECORD. FURTHER, THE APPELLANT HAS DEMONSTRATED THAT THE LOAN AMOUNT WAS OUTSTANDING SINCE YEAR 2000 AND THE SAME HAS BEEN ADEQUATELY AND CONS ISTENTLY REFLECTED IN ITS BALANCE SHEET FOR ALL THESE YEARS. IN LIGHT OF ABO VE, IT CANNOT BE SAID THAT THE CLAIM OF THE APPELLANT TOWARDS BAD DEBT WAS PATENTL Y WRONG. FURTHER, THE COORDINATE BENCH WHILE CONFIRMING THE DISALLOWANCE TOWARDS CLAIM OF BAD DEBT HAS NOWHERE STATED THAT THE CLAIM WAS PATENTLY WRON G. APPARENTLY, THE COORDINATE BENCH WAS GUIDED BY THE FIRST LIMB OF TH E TWO ALTERNATE CONDITIONS SPECIFIED U/S 36(2)(I) OF THE ACT WHEREAS THE APPEL LANT CLAIM WAS LARGELY UNDER THE SECOND LIMB OF 36(2)(I) OF THE ACT. ALL IT STA TED WAS THAT THE APPELLANT HAS FAILED TO ADDUCE APPROPRIATE EVIDENCE TO SHOW THAT SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR. DURING THE COURSE OF SUBJECT PROCEE DINGS, THE APPELLANT HAS ABLY DEMONSTRATED THROUGH APPROPRIATE DOCUMENTATION THAT HE WAS ENGAGED IN THE MONEY LENDING BUSINESS AND HAS OFFERED ITS I NTEREST INCOME TO TAX. ACCORDINGLY, THE CLAIM OF THE APPELLANT TOWARDS BAD DEBTS OF LOAN TRANSACTION OF RS 515000 CANNOT BE HELD TO BE LACKING IN ANY BO NAFIDE. ITS A DIFFERENT MATTER THAT IN QUANTUM PROCEEDINGS, THE APPELLANT H AS FAILED TO SUCCEED HOWEVER THE SAME CANNOT BE A BASIS FOR LEVY OF PENA LTY. ITA NO. 128/JP/2016 GOPALDAS KHANDELWAL, JAIPUR VS. ACIT, CIRCLE-1, JA IPUR 9 2.11 IN LIGHT OF ABOVE DISCUSSIONS, THE PENALTY OF RS.1,73,350/- IMPOSED BY THE AO U/S 271(1)(C) OF THE IT ACT, 1961 ON THE DISALLO WANCE OF BAD DEBTS OF RS 5,15,000 IS HEREBY DELETED. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/0 8/2016. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 01/ 08/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- GOP[ALDAS KHANDELWAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE-1, JAIPUR 3. VK;DJ VK;QDR@ CIT I, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-I, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 128/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR