The ITO, Ward-8(1), Ahmedabad V. S.B. Engineering Pvt.Ltd., Ahmedabad

ITA 2136/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1267 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 26-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMADABAD , BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 2136/AHD/2012 ASSESSMENT YEAR :2008-09 ITO, WARD 8(1), AHMEDABAD V/S . S. B. ENGINEERING PVT. LTD., SHANKERLAL ESTATE, NR. KUBERESHWAR MAHADEV, SAIJPUR BOGHA, AHMEDABAD - 382345 PAN NO. AAGCS2870R (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI D. K. MISHRA, SR. D.R. /BY ASSESSEE NONE /DATE OF HEARING 24.08.2015 /DATE OF PRONOUNCEMENT 24 .09.2015 O R D E R PER : RAJPAL YADAV, JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LD. CIT(A)-XIV, AHMEDABAD, DATED 23.07.2012 PASSED FOR A.Y.2008-09. ITA NO. 2014/AHD/12 A.Y. 09-10 (ITO VS. SHRI B. V. OIL INDUSTRIES) PAGE 2 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD . CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.4,85,244/- IMPOSED U/S. 271(1)(C) OF THE INCOME TAX ACT. 3. IN RESPONSE TO THE NOTICE OF HEARING NO-ONE COME PRESENT ON BEHALF OF ASSESSEE. WITH THE ASSISTANCE OF LD. SR.D.R., WE H AVE GONE THROUGH THE RECORD CAREFULLY AND PROCEED TO DECIDE THE APPEAL EX PARTE QUA THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 09.09.2008 DECLARING A LOSS OF RS.46,467/ -. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE U /S.143(2) OF THE INCOME TAX ACT WAS ISSUED ON 19 TH AUGUST, 2009, WHICH WAS DULY SERVED UPON THE ASSES SEE BY SPEED POST. ON SCRUTINY OF THE ACCOUNTS, IT RE VEALED THAT ASSESSEE HAD SHOWN A LIABILITY OF RS.15,70,371/- AGAINST THE NAME OF S IX PERSONS. OUT OF THESE, THE MAJOR LIABILITY ALLEGED TO HAVE BEEN SHOWN AGAINST THE NAME OF SONI STRIPS LTD. AMOUNTING TO RS.15,56,343/-. LD. ASSESSING OFFICER HAS OBSERVED THAT THESE AMOUNTS HAVE BEEN SHOWN OUTSTANDING SINCE F.Y. 2006 -07. HE HARBORED A BELIEF THAT LIABILITY MUST HAVE BEEN CEASED. ACCOR DINGLY, WITH THE AID OF SECTION 41(1), HE MADE AN ADDITION OF RS.15,70,371/- AFTER SETTING OFF THE UNABSORBED BUSINESS LOSS FOR A.Y. 2007-08, THE TOTAL INCOME WA S DETERMINED AT NIL. THE LD. ASSESSING OFFICER HAS INITIATED PENALTY PROCEED ING U/S.271(1)(C) QUA THE ADDITION MADE BY HIM. HE ULTIMATELY IMPOSED PENALTY OF RS.4,85,244/- 4. ON APPEAL, LD. FIRST APPELLATE AUTHORITY HAS DEL ETED THE PENALTY BY OBSERVING AS UNDER: I HAVE CAREFULLY CONSIDERED THE PENALTY ORDER AND THE SUBMISSION MADE BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDING S. THE A. O. HAS IMPOSED THE PENALTY U/S. 271(1)(C) OF THE ACT AS AN ADDITION OF RS. 15,70,371/- WAS MADE U/S. 41 (1) OF THE ACT. THE APPELLANT HAS SUBMITTED THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE DETAILS REGARDING SUNDRY CREDITORS WERE SUBMITTED BEFORE THE A. O. IT WAS SUBMITTED THAT EXCEPT FOR THE PARTY AT SL. NO. 1 MENTIONED IN THE PENALTY ORDER, THE CONFIRMATION WITH PAN OF ALL THE PARTIES WERE SUBMI TTED BEFORE THE A. O. REGARDING THE PARTY AT SL. NO. 1 (ACCORDING TO THE TABLE IN A SSTT. ORDER) I.E. SONY STRIPS LIMITED ITA NO. 2014/AHD/12 A.Y. 09-10 (ITO VS. SHRI B. V. OIL INDUSTRIES) PAGE 3 AGAINST WHOM THERE IS A CREDIT OF RS.15,56,343/-, T HE AMOUNT WAS RECEIVED AS ADVANCE FOR A TWIN KEY PROJECT AND IT IS NOT ON ACCOUNT OF ANY SUNDRY CREDITORS FOR WHICH THE APPELLANT HAS CLAIMED DEDUCTION IN THE P & L ACCOUN T. THE INFORMATION WAS SUBMITTED TO THE A. O. DURING THE COURSE OF ASSESS MENT PROCEEDINGS. IN VIEW OF THE ABOVE MENTIONED FACTS SUBMITTED BY T HE APPELLANT, I AM OF THE CONSIDERED OPINION THAT NO PENALTY IS EXIGIBLE ON T HE APPELLANT U/S. 271(1)(C) OF THE ACT AS THERE IS NO CONCEALMENT OR FURNISHING OF INA CCURATE PARTICULARS OF INCOME. THE A. O. MADE THE ADDITION ON THE BASIS OF CIRCUMSTANT IAL EVIDENCES AND THERE IS NO FACTUAL FINDING TO PROVE THAT CERTAIN PARTICULARS F URNISHED BY THE APPELLANT HAVE BEEN FOUND TO BE INACCURATE. IN FACT, IN RESPECT OF THE MAJOR AMOUNT OF RS. 15,56,343/-, THE BASIS OF ADDITION U/S. 41 (1) OF THE ACT ITSELF IS ERRONEOUS. IN RESPECT OF OTHER NORMS FOR WHICH THE ADDITION U/S. 41 (1) WAS MADE, THE A. O. HAS NOT GIVEN ANY FACTUAL FINDING TO PROVE THAT THE LIABILITIES SHOWN BY THE APPELLANT H AVE IN FACT CEASED TO EXIST AND THE CLAIM OF THE APPELLANT WAS ERRONEOUS. THE PENALTY I MPOSED BY THE A. O. IS, THEREFORE, DIRECTED TO BE DELETED. 5. WITH THE ASSISTANCE OF LD. SR. D.R., WE HAVE GON E THROUGH THE RECORD CAREFULLY. WE FIND THAT ASSESSEE HAS GIVEN COMPLET E DETAILS OF THE ALLEGED CREDITOR. WITH REGARD TO SONI STRIPS LTD., IT WAS CONTENDED THAT AMOUNT WAS RECEIVED AS ADVANCE FOR A TWIN KEY PROJECT AND IT I S NOT ON ACCOUNT OF ANY SUNDRY CREDITOR FOR WHICH THE ASSESSEE HAS CLAIMED THE DED UCTION IN THE P & L ACCOUNT. AT THIS STAGE, IT IS PERTINENT TO MENTION THAT SECT ION 41(1) HAS BEEN INCORPORATED IN THE ACT TO COVER A PARTICULAR FACT SITUATION. T HIS SECTION APPLIES WHERE A TRADING LIABILITY WAS ALLOWED AS DEDUCTION IN EARLI ER YEARS IN COMPUTING THE BUSINESS INCOME OF THE ASSESSEE AND THE ASSESSEE HA S OBTAINED A BENEFIT IN RESPECT OF SUCH TRADING LIABILITY IN LATER YEAR BY WAY OF REMISSION OR CESSATION OF THE LIABILITY. IN SUCH A CASE, THE SECTION SAYS TH AT WHATEVER BENEFIT HAS ARISEN TO THE ASSESSEE IN THE LATER YEAR BY WAY OF REMISSION OF THE LIABILITY WILL BE BROUGHT TO TAX IN THAT YEAR. THE PRINCIPLE BEHIND THE SECT ION IS THAT A PROVISION INTENDED TO ENSURE THAT ASSESSEE DOES NOT GET AWARE WITH A D OUBLE BENEFIT ONCE BY WAY OF DEDUCTION IN EARLIER ASSESSMENT YEAR AND AGAIN BY N OT BEING TAXED ON THE BENEFIT RECEIVED BY HIM IN LATER YEAR WITH REFERENCE TO THE LIABILITY EARLIER ALLOWED AS DEDUCTION. IT IS NOT DEMONSTRATED ON THE RECORD BY THE ASSESSING OFFICER THAT LIABILITY HAS ACTUALLY BEEN CEASED. MOREOVER, MAJO R AMOUNT REPRESENTING IN THE CASE OF SONI STRIPS LTD. WAS NOT CLAIMED AS DEDUCT ION IN P&L ACCOUNT IN EARLIER ITA NO. 2014/AHD/12 A.Y. 09-10 (ITO VS. SHRI B. V. OIL INDUSTRIES) PAGE 4 YEARS. THEREFORE, IN OUR OPINION, LD. FIRST APPELL ATE AUTHORITY HAS APPRECIATED THE FACTS AND CIRCUMSTANCES IN RIGHT PERSPECTIVE AN D NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A). ACCORDINGLY, THE APPEA L OF REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 24.9.2015 SD/- SD/- ( MANISH BORAD) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER