ACIT 9(3), MUMBAI V. SIMRONE PHARMACEUTICAL INDUSTRIES LTD, MUMBAI

ITA 1355/MUM/2011

• Counselvise Citation: 135519914 RSA 2011
• Duration Of Justice: 4 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 14-10-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 15-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JEETENDRA KUMAR
• Assessee Lawyers: D C SABOO
• Keywords: Bad and doubtful debts

Judgement Text

, , , , H IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO.1557/M/2011 ( / ASSESSMENT YEAR; 2004-05) M/S. SIMRONE PHARMACEUTICAL INDUSTRIES LTD. 10, SAI SUNDARAM, SAIBABA COMPLEX, GOREGAON (E) MUMBAI 400 063 PAN: AAACS0775P / VS. ACIT -9(3) AAYAKAR BHAVAN MUMBAI 400 020 ( / APPELLANT) ( ! / RESPONDENT) ./ ITA NO.1355/M/2011 ( / ASSESSMENT YEAR; 2004-05) ACIT -9(3) AAYAKAR BHAVAN MUMBAI 400 020 / VS. M/S. SIMRONE PHARMACEUTICAL INDUSTRIES LTD. 10, SAI SUNDARAM, SAIBABA COMPLEX, GOREGAON (E) MUMBAI 400 063 PAN: AAACS0775P ( / APPELLANT) ( ! / RESPONDENT) ASSESSEE BY : SHRI D.C. SABOO & SHYAM SABOO (AR) REVENUE BY : SHRI JEETENDRA KUMAR, (DR) ' #$% / DATE OF HEARING : 09.02.2015 &' ' #$% / DATE OF PRONOUNCEMENT : 18 .02.2015 ()* / O R D E R PER R.C.SHARMA, A.M . : THESE CROSS APPEALS FILED BY THE ASSESSEE & REVENUE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 01.12.20 10 FOR THE ASSESSMENT YEAR 2004-05, IN THE MATTER IMPOSED OF PENALTY U/S.271(1 )(C) OF THE I.T. ACT. ITA NO.1557&1355/M/2011 2 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND PERUSED MA TERIAL ON RECORD. THE PENALTY OF RS. 49,20,688/- WAS LEVIED ON AMOUNT SOU GHT TO BE EVADED AGGREGATING TO RS.1,37,16,279/- WHICH COMPRISED RS. 1,32,63,213/- ADDED ON DISALLOWANCE OF ADVANCES WRITTEN OFF, RS.3,37,312/- ADDED ON ACCOUNT OF CESSION OF LIABILITY, RS.1,07,633/- ADDED ON ACCOUN T OF DELAYED PAYMENT OF CONTRIBUTION TO PF AND RS.8.121/- ADDED TOWARDS UNA CCOUNTED PURCHASES. BY THE IMPUGNED ORDER LD. CIT(A) DELETED PENALTY WITH REFERENCE TO THE ADDITION OF RS.1,32,63,213/- MADE BY DENYING DEDUCTION OF AD VANCES WRITTEN OFF AND RS.1,07,633/-, ADDITION ON ACCOUNT OF DELAYED PAYME NT OF CONTRIBUTION TO PF. HOWEVER, LD. CIT(A) UPHELD THE PENALTY WITH REGARD TO ADDITION OF RS.3,37,312/- AND RS.8,121/-. DETAILED FINDING HAS BEEN GIVEN BY LD. CIT(A) AT PARA 6.2 & 6.3 JUSTIFYING THE REASONS FOR DELETING THE PENALTY. BOTH ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US, AGAINST THE OR DER OF CIT(A). 3. AT THE OUTSET, LD. AR PLACED ON RECORD ON THE OR DER OF THE TRIBUNAL IN QUANTUM APPEAL DATED 31 ST MAY 2011, WHEREIN ALL ADDITIONS WERE DELETED EXCEPT FOR ADDITION MADE ON ACCOUNT OF WRITTEN OFF ADVANCES OF RS.12,33,725/-. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE ORDER OF THE TRIBUNAL DATED 31 ST MAY 2011 AND FOUND THAT ALL ADDITIONS MADE BY THE AO WERE DELETED BY TRIBUNAL AFTER GIVING DETAILED FIND INGS FROM PAGE 5 TO 10 OF THE ORDER. HOWEVER, THE TRIBUNAL HAVE UPHELD THE ADDITI ONS OF RS.12,33,725/- ON ACCOUNT OF BAD DEBTS WRITTEN OFF. AS ALL THE ADDITI ONS EXCEPT THE ADDITION ON ACCOUNT OF DEBTS WRITTEN OFF AMOUNTING TO RS.12,33, 725/- HAD ALREADY BEEN DELETED, THE PENALTY ORDER PASSED WITH REFERENCE TO THESE ADDITIONS HAVE NO LEGS TO STAND. ACCORDINGLY WE DO NOT FIND ANY MERIT IN T HE ACTION OF AO AND CONFIRM THE DELETION OF PENALTY WITH RESPECT TO ALL THESE FOR LEVYING THE PENALTY ON THE ADDITIONS WHICH HAD BEEN DELETED BY TRIBUNAL IN QUANTUM APPEAL. IT IS ITA NO.1557&1355/M/2011 3 ALSO PERTINENT TO MENTION THAT CIT(A) HAS ALSO GIVE N DUE REASONING FOR DELETION OF PENALTY WITH REGARD TO THE ADDITION OF RS.1,32,6 3,213/- ON ACCOUNT OF ADVANCES WRITTEN OFF AND RS.1,07,633/- ON ACCOUNT O F DELAYED PAYMENT OF CONTRIBUTION TO PF. THE CIT(A) HAS OBSERVED AS UNDE R: IN THE INSTANT CASE, IT IS SEEN THAT THE APPELLAN T HAD NOT CONCEALED ANY INCOME AS REGARD ADDITIONS MADE OF RS.1,32,63,213/- ON DELAYING DEDUCTION OF ADVANCES WRITTEN OFF AND RS.1,07,633/- ON ACCOUNT O F DELAYED PAYMENT OF CONTRIBUTIONS TO PF. IT IS NOT THE CASE OF THE AO T HAT THE APPELLANT CLAIMED DEDUCTION OF THESE TWO SUMS BASED ON PARTICULARS WH ICH WERE FOUND TO BE INACCURATE OR FALSE. IN BOTH THE CASES, THE APPELLA NT HAD MADE CLAIMS WHICH WERE HELD NOT SUSTAINABLE IN LAW. THE PARTICULARS O F CLAIM WERE NOT FOUND TO BE INACCURATE, INCORRECT OR FALSE AND ONLY THE CLAI MS WERE SAID TO BE NOT PERMISSIBLE UNDER THE LAW. AS HELD IN THE CASE OF R ELIANCE PETRO (SUPRA) A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE I N LAW WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. THE CO NDITIONS PRESCRIBED IN SECTION 271(1) DO NOT EXIST IN RELATION TO ADDITIO NS OF THE AFORESAID TWO SUMS. 5. IN VIEW OF THE DISCUSSION MADE IN PARA 4, WE DO NOT FIND ANY REASON TO INTERFERE WITH ORDER OF CIT(A) FOR DELETING THE PEN ALTY. NOW COMING TO THE ADDITION OF RS.3,37,312/- AND RS.8,121/- WITH RESPE CT TO WHICH CIT(A) HAS UPHELD THE PENALTY. WE FOUND THAT THE AMOUNT WAS SH OWN IN THE BOOKS OF ACCOUNT AS PAYABLE, MERELY BECAUSE THE OTHER PARTY HAS WRITTEN OFF THE AMOUNT, IN THEIR BOOKS OF ACCOUNT WILL NOT ABSOLVE THE ASSE SSEE FROM ITS LIABILITY TO MAKE PAYMENT. THE ASSESSEE HAS GIVEN FULL DISCLOSUR E. THEREFORE, IT WAS NOT A FIT CASE FOR IMPOSITION OF PENALTY. 6. WITH REGARD TO PURCHASE OF RS.8,121/-, MERELY BE CAUSE THE SUPPLIER HAS NOT CONFIRMED THE TRANSACTION, NO PENALTY IS IMPOSA BLE. THE ASSESSEE HAD FURNISHED CORRECT PARTICULAR OF TOTAL PURCHASE INCL UDING PURCHASE OF RS.8,121/-. GENUINENESS OF ENTIRE PURCHASE WAS NOT IN DOUBT. EV EN THE TRIBUNAL IN QUANTUM ORDER HAS DELETED THE PENALTY. ACCORDINGLY, WE DO NOT FIND ANY JUSTIFICATION FOR CONFIRMING PENALTY FOR THESE ADDI TIONS. ITA NO.1557&1355/M/2011 4 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 .02.2015. ()* ' &' %) + ,(- 18 .02.2015 ' ' 0 SD/- SD /- (SANJAY GARG) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER /MUMBAI ; ,( / DATED 18 .02.2015 * PATEL ()* ' #1 2)1# ()* ' #1 2)1# ()* ' #1 2)1# ()* ' #1 2)1#/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. 3 ( ) / THE CIT(A)- 4. 3 / CIT 5. 160 # , , / THE DR CONCERNED BENCH , 6. 07 8 / GUARD FILE. ()* ()* ()* ()* / BY ORDER, !1# # //TRUE COPY// 9 99 9/ // /: ; : ; : ; : ; ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI