The ACIT,(OSD)Circle-8, Ahmedabad V. Santosh Starch Ltd., Ahmedabad

ITA 2238/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89614 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-06-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 05-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts; Difference of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) I.T. A. NO.2238 /AHD/2011 (ASSESSME NT YEAR: 2003-04) A.C.I.T., (OSD), CIRCLE-8, AHMEDABAD V/S SANTOSH STARCH LTD (EARLIER KNOWN AS SANTOSH SECURITIES LTD.) 201, KARMA COMPLEX, NR. MAHALAXMI CROSS ROAD, PALDI, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AACCS7445N APPELLANT BY : SHRI NIMESH YADAV, SR. D.R . RESPONDENT BY : SHRI GAURAV NAHTA, A.R. ( )/ ORDER DATE OF HEARING : 15-06-201 5 DATE OF PRONOUNCEMENT : 19 -06-2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-XIV, AHMEDABAD DATED 21.06.2011 FOR A.Y. 2003-04. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE B USINESS OF TRADING OF SHARES, LEASING, FINANCE AND INVESTMENT. ASSESSEE F ILED ITS RETURN OF INCOME FOR A.Y. 2003-04 ON 31.10.2003 DECLARING TOTAL INCO ME OF RS. 1,12,130/-. ITA NO 2238/ AHD/2011 . A.Y. 2003-04 2 THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER T HE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 28.03.2006 AN D THE TOTAL INCOME WAS DETERMINED AT RS. 24,12,890/- INTERALIA BY DISALLOW ANCE THE CLAIM OF BAD DEBTS OF RS. 22,25,000/-. ON THE AFORESAID DISALLOW ANCE OF BAD DEBTS, A.O VIDE ORDER DATED 30.09.2010 LEVIED PENALTY OF RS. 8 ,17,690/- U/S. 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF A.O., ASSESSE E CARRIED THE MATTER BEFORE LD. CIT(A) WHO DELED THE ADDITION BY HOLDING AS UNDER:- 4.3 DECISION I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND THE SUBMISSION FILED BY THE APPELLANT. THE APPELLANT HAS SUBMITTED THAT THE BAD DEBTS WERE RIGHTLY CLAIMED BY THE APPELLANT. HOWEVER, THE CLAIM WAS DISALLOWED BY THE AO, IT WAS ALLOWED BY THE CIT(A) BUT IT WAS AGAIN HELD TO BE DISALLOWABLE BY THE ITA T. NON-ACCEPTANCE OF THE CONTENTION DOES NOT MEAN THAT THE INACCURATE PARTICULARS ARE F URNISHED. THE APPELLANT HAD A BONA FIDE BELIEF AND, THEREFORE, CLAIMED THE DEDUCTION. THE APPELLANT CANNOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME. I AM IN AGREEMENT WITH THE SUBMISSION MADE BY THE APPELLANT. THE ASSESSING OFFICER HAS IMPOSED A PENALTY AS THE ADDITION MADE BY HIM HAS BEEN CONFIRMED BY HONORABLE ITAT AHMEDABAD. THE AO HAS NOT GIVEN ANY FACTUAL FINDING REGARDING FURNISHING OF INACCURATE PARTICULARS. IT WAS A MERE CLAIM THAT HAS BEEN DISALLOWED BY HIM. THE FACTS AND SUBSEQUENT DECISION OF THE ADDIT ION AT FIRST APPELLATE STAGE AND SUBSEQUENT CONFIRMATION BY ITAT SHOW THAT THERE WAS A POSSIBILITY OF DIFFERENCE OF OPINION AND, THEREFORE, THE PENALTY FOR CONCEALMENT CANNOT BE IMPOSED ON THESE FACTS. THE FACTS MENTIONED BY THE APPELLANT HAVE NOT BEEN PROVED TO BE INCORRECT OR FALSE. ACCORDINGLY THE RATIO OF THE JUDGMENTS QUOTED BY TH E APPELLANT BECOMES APPLICABLE TO THE PRESENT CASE. THE RECENT JUDGMENT OF HONORABLE SUPR EME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD (230 CTR 449) IS SQUARELY A PPLICABLE TO THE PRESENT FACTS OF THE CASE. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTA NCES, THE PENALTY IMPOSED BY THE ASSESSING OFFICER IS HEREBY DELETED. 4. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REV ENUE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND, LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A). ITA NO 2238/ AHD/2011 . A.Y. 2003-04 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE PENALTY LEV IED BY A.O HAS NOTED THAT THE NON-ACCEPTANCE OF THE CONTENTIONS OF THE ASSESS EE DOES NOT MEAN FILING OF INACCURATE PARTICULAR ON THE PART OF THE ASSESSE E AND IT CANNOT BE SAID THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF IN COME. HE HAS FURTHER NOTED THAT A.O HAS NOT GIVEN A FACTUAL FINDING REGA RDING FURNISHING OF INACCURATE PARTICULARS AND THE FACTS MENTIONED BY T HE ASSESSEE HAVE NOT BEEN PROVED TO BE INCORRECT OR FALSE. LD. CIT(A) WHILE D ELETING THE PENALTY HAD ALSO RELIED ON THE DECISION OF HONBLE APEX COURT I N THE CASE RELIANCE PETRO PRODUCTS 230 CTR 440. BEFORE US, REVENUE HAS NOT BR OUGHT ANY CONTRARY BINDING DECISION IN ITS SUPPORT NOR COULD CONTROVER T THE FINDINGS OF LD. CIT(A). IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THIS GROUND OF REV ENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 19- 06 - 2015. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD