The DCIT, Circle-9, Ahmedabad V. M/s. G.K. Patel & Co., Ahmedabad

ITA 1701/AHD/2011

• Counselvise Citation: 170120514 RSA 2011
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: WRITTEN SUBMISSIONS
• Keywords: Bad and doubtful debts

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .# ## #. . . . % % % %, , , , &' ( & ' &' ( & ' &' ( & ' &' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.1701/AHD/2011 [ASSTT.YEAR : 2006-2007] DCIT, CIR.9 AHMEDABAD. /VS. M/S.G.K. PATEL & CO. 14-A, SARTHAK SOCIETY NEW SEVA MANDIR ROAD, PALDI AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / &/ REVENUE BY : SHRI P.L. KUREEL, SR.DR 12 . / &/ ASSESSEE BY : WRITTEN SUBMISSIONS 3 . 24'/ DATE OF HEARING : 20 TH MAY, 2014 567 . 24'/ DATE OF PRONOUNCEMENT : 06-06-2014 &8 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2006-2007 IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A). 2. AT THE TIME OF HEARING, NONE APPEARING ON BEHALF OF THE ASSESEE- RESPONDENT. HOWEVER, THE ASSESSEE HAS FILED WRITTE N SUBMISSIONS BEFORE THE TRIBUNAL WITH REQUEST THAT THE APPEAL OF THE RE VENUE MAY BE DECIDED ON MERITS AFTER CONSIDERING WRITTEN SUBMISSIONS FIL ED BY THE ASSESSEE. ITA NO.1701/AHD/2011 -2- 3. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE PENALTY OF RS.12,81,237/- MADE BY THE AO U/S.271(1) (C) OF THE ACT. 4. THE LEARNED DR SUBMITTED THAT THE ASSESSEE WAS A WARE THAT CERTAIN DISALLOWANCES WERE CALLED FOR UNDER SECTION 40(A)(I A) OF THE ACT AND ALSO OF INSURANCE ON TRUCKS AND THE SAME WERE NOT ADDED BACK BY THE ASSESSEE, AND THEREFORE, PENALTY UNDER SECTION 271(1)(C) WAS RIGHTLY IMPOSED ON THE ASSESSEE. 5. THE ASSESSEE IN ITS WRITTEN SUBMISSIONS HAS SUBM ITTED THAT THE PENALTY WAS LEVIED ON SIX ITEMS OF ADDITIONS/DISALL OWANCES, OUT OF WHICH THREE ITEMS OF CASH PAYMENTS BY PARTNERS UNDER SECT ION 68, CLAIM OF BAD DEBTS, ADDITION UNDER SECTION 41 WERE DELETED IN AP PEAL BY THE TRIBUNAL VIDE ORDER DATED 5.8.2011 IN THE ASSESSEES APPEAL FOR THE RELEVANT ASSTT.YEAR 2006-07. WITH REGARD TO THE BALANCE DIS ALLOWANCE CONFIRMED BY THE TRIBUNAL, THE ASSESSEE HAS SUBMITTED THE SAM E RELATES TO THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE AC T FOR NON DEDUCTION OF TAX AT SOURCE. THE ASSESSEE HAS SUBMITTED THAT CLA IM OF EXPENDITURE WAS NOT ACCEPTED UNDER NEWLY ENACTED PROVISION OF LAW, WHICH DOES NOT ENTAIL LEVY OF PENALTY. WITH REGARD TO OTHER DISALLOWANC E FOR INSURANCE ON TRUCK, THE ASSESSEE SUBMITTED THAT ALL THE RELEVANT MATERI AL FACTS WERE PLACED BEFORE THE AO, AND THAT IT WAS THROUGH OVERSIGHT TH AT THE AMOUNT WAS DEBITED TO THE INSURANCE ACCOUNT. THE ASSESSEE REL IED ON THE DECISION OF THE HONBLE APEX COURT IN CIT VS. RELIANCE PETRO PR ODUCTS P. LTD., 322 ITR 158. 6. WE HAVE HEARD LEARNED DR AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT OUT OF SIX ITEMS OF DISALLOWA NCES/ADDITIONS, THREE ITA NO.1701/AHD/2011 -3- MAIN ITEMS OF ADDITION PERTAINED TO THE CASH PAYMEN TS BY PARTNERS UNDER SECTION 68, CLAIM OF BAD DEBTS AND THE ADDITION UND ER SECTION 41 WERE DELETED BY THE TRIBUNAL VIDE ORDER DATED 5.8.2011 F OR THE RELEVANT ASSESSMENT YEAR. WITH REGARD TO OTHER ITEMS OF DIS ALLOWANCES UNDER SECTION 40(A)(IA) AND DISALLOWANCE OF INSURANCE ON TRUCK, WE FIND THAT ALL THE MATERIAL FACTS WERE DECLARED BY THE ASSESSEE, A T THE TIME OF ASSESSMENT ITSELF, AND THERE IS NO MALA FIDE CONDUCT BY THE ASSESSEE. MERELY BECAUSE DUE TO OPERATION OF THE STATUTORY PROVISIONS OF LAW , SOME DISALLOWANCES WERE SUSTAINED BY THE APPELLATE AUTHORITY, IS NO GR OUND TO JUSTIFY THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. THE RATIO OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF C IT VS. RELIANCE PETRO PRODUCTS P. LTD. (SURPA) APPLIES TO THE FACTS OF TH E CASE OF THE ASSESSEE. ACCORDINGLY, WE HOLD THAT NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIABLE ON THE ASSESSEE, AND THE SAME WAS RIGH TLY DELETED BY THE CIT(A), WHOSE ORDER IS CONFIRMED AND THE GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## #. .. .# ## #. . . . % % % % /N.S.SAINI) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD