The Dy,CIT.,(OSD)Range-1, Ahmedabad V. M/s. Chem Process Systems Pvt.Ltd., Ahmedabad

ITA 1765/AHD/2012

• Counselvise Citation: 176520514 RSA 2012
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TIRKEY
• Assessee Lawyers: S N DIVETIA
• Keywords: Bad and doubtful debts; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH BEFORE: SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARA T, JUDICIAL MEMBER DCIT, (OSD) RANGE-1, AHMEDABAD (APPELLANT) VS. M/S CHEM PROCESS SYSTEMS PVT. LTD. (RESPONDENT) PAN NO. AABCC5915A REVENUE BY : SRI A. TIRKEY, SR. D.R. ASSESSEE BY : SRI S.N. DIVETIA, A.R. DATE OF HEARING : 04-10-2012 DATE OF PRONOUNCEMENT : 25-10-2012 / ORDER PER : KUL BHARAT, JUDICIAL MEMBER:- THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER LD. COMMISSIONER OF INCOME TAX (APPEALS)-6AHMEDABAD, DA TED 28-06-2012 THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE ID. CIT(A) HAS ERRED IN LAW AND ON FA CTS IN DELETING THE PENALTY LEVIED U/S 271(L)(C) OF THE ACT TO THE EXTE NT OF RS.31,48,853/- I.T.A. NO.1765 /AHD/2012 A.Y.:-2008-09 ITA NO. 1765/AHD/2012 A.Y. 2008-09 PAGE NO. DCIT VS. M/S CHEM PROCESS SYSTEMS PVT. LTD. 2 DESPITE THE FACT THAT THE ASSESSEE HAD NOT MADE ANY SUBMISSION DURING THE PENALTY PROCEEDINGS AND HAD CLAIMED BAD DEBTS I N THE RETURN OF INCOME WITHOUT COMPLYING WITH THE PROVISIONS OF SEC TION 36(2) OF THE ACT. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE ID. CIT(A) OUGHT TO HAVE UPHELD THE ORDER THE ASSESSING OFFICE R TO THE EXTENT MENTIONED ABOVE SINCE THE ASSESSEE HAS FAILED TO DI SCLOSE HIS TRUE INCOME/BOOK PROFIT. THE APPELLANT PRAYS THAT THE ORDER OF ID. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED TO THE ABOVE EXTENT. 2. THE FACTS IN BRIEF ARE THAT THE CASE OF THE ASSE SSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT IN RESPECT OF THE REVISED RETUR N OF INCOME FILED BY THE ASSESSEE. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT ORDER MADE DISALLOWANCE OF BAD DEBTS CLAIMED BY THE ASSESSEE A ND INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) SEPARATELY. THE PENALTY ORDER WAS PASSED LEVYING THE PENALTY OF RS. 31,50,247/-. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) WHO DELETED THE PENALTY ON BA D DEBTS CLAIMED BY THE ASSESSEE AND CONFIRMED PENALTY ON ADDITION OF RS. 4 ,100/- THE REVENUE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 3. THE ONLY EFFECTIVE GROUND IS AGAINST THE DELETIO N OF PENALTY TO THE EXTENT OF RS. 31,48,853/-. LD. D.R. SUBMITTED THAT NEITHER BEFORE THE ASSESSING OFFICER IN QUANTUM PROCEEDINGS NOR IN PEN ALTY PROCEEDINGS THE ASSESSEE SUBMITTED ANY EXPLANATION IN RESPECT OF TH E CLAIM OF BAD DEBT. HE SUBMITTED THAT LD. CIT(A) ERRED IN GIVING A FINDING THAT ADEQUATE DISCLOSURE ITA NO. 1765/AHD/2012 A.Y. 2008-09 PAGE NO. DCIT VS. M/S CHEM PROCESS SYSTEMS PVT. LTD. 3 WAS MADE IN REVISED RETURN FILED ,THEREFORE, WHILE MAKING THE CLAIM OF BAD DEBTS IN REVISED RETURN, THE ASSESSEE HAD MADE IT C LEAR THAT THE APPEAL WAS FILED AGAINST THE ADDITION MADE BY THE ASSESSING OF FICER IN THE ASSESSMENT YEAR 2007-08 AND THE REVISED CLAIM WAS SUBJECT TO T HE OUTCOME OF THE APPEAL. LD. D.R. SUBMITTED THAT WHEN NO EXPLANATION WAS FIL ED ON SPECIFIC QUERY, THERE WAS NO OCCASION TO INFER THAT THE ASSESSEE HA S MADE ALL THE DISCLOSURES. ON THE CONTRARY, LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT ALL RELEVANT FACTS WERE SUBMITTED BEFORE THE ASSESSING OFFICER, THEREFORE, STRONGLY RELIED ON THE ORDER OF THE LD. CIT(A). 4. WE HAVE HEARD RIVAL SUBMISSIONS PERUSED THE MATE RIAL AVAILABLE ON RECORD. LD. CIT(A) HAS HELD THAT THE ASSESSING OFF ICER MADE ADDITION OF BAD DEBTS ON THE BASIS THAT IT WAS NOT WRITTEN OFF IN T HE PROFIT AND LOSS ACCOUNT PERTAINING TO THE YEAR UNDER CONSIDERATION. LD. C IT(A) HAS GIVEN A FINDING OF FACT THAT THE FACT WAS DISCLOSED BY THE ASSESSEE AT THE TIME OF FILING REVISED RETURN ITSELF, THEREFORE, THERE IS NO CONCEALMENT O F INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. FURTHER, RELYING ON THE DECISION OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF CIT V S. RELIANCE PETRO- PRODUCTS LTD 322 ITR 158 (SUPREME COURT) DELETED T HE PENALTY. NEITHER FROM THE ASSESSMENT ORDER NOR IN THE PENALTY ORDER THE FACT THAT WHILE MAKING CLAIM OF BAD DEBT IN THE REVISED RETURN OF INCOME, THE ASSESSEE MADE IT CLEAR THAT THE APPEAL WAS FILED AGAINST THE ADDITION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT YEAR 2007-08 AND THE REVISED CLAI M IS SUBJECT TO THE OUTCOME OF THE APPEAL IS EMERGING. HOWEVER, THE F INDING OF LD. CIT(A) IS NOT CONTROVERTED BY THE REVENUE BY PLACING THE CONT RARY MATERIAL OR RECORD. HENCE, THE FINDING OF FACT AS GIVEN BY LD. CIT(A) R EMAINS UNREBUTTED. THEREFORE, WE DO NOT FEEL THAT THERE IS SUFFICIENT REASON TO INTERFERE IN THE ITA NO. 1765/AHD/2012 A.Y. 2008-09 PAGE NO. DCIT VS. M/S CHEM PROCESS SYSTEMS PVT. LTD. 4 IMPUGNED ORDER AND THE SAME IS HEREBY CONFIRMED. I N THIS VIEW OF THE MATTER, THIS GROUND OF REVENUES APPEAL IS DISMISSE D. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (A.K. GARODIA) (KUL BHARAT) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD : DATED 25 /10/2012 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A)-III, BARODA 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#