Shri Ashish P.Patel, Ahmedabad V. The ACIT, Central Circle-1(3), Ahmedabad

ITA 2284/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8871 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-03-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 12-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.2284/AHD/2013 (ASSESSMENT YEAR: 1998-99) SHRI ASHISH P. PATEL 1 ST FLOOR, CHINUBHAI CHAMBERS, B/H. CITY GOLD CINEMA, OFF. ASHRAM ROAD, AHMEDABAD - 380009 APPELLANT VS. ACIT, CENTRAL CIRCLE-1(3), AHMEDABAD RESPONDENT PAN: ACTPP0045O /BY ASSESSEE : SHRI P. M. MEHTA, A.R. /BY REVENUE : SHRI SANJEEV KUMAR DEV, SR. D.R. /DATE OF HEARING : 23.03.2017 /DATE OF PRONOUNCEMENT : 24.03.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 1998-99 IS PREFERRED AGAINST THE CIT(A)-I, AHMEDABADS ORDER DATED 30.08.2013, P ASSED IN APPEAL NO. CIT(A)-I/CC.1(3)/058/2013-14, UPHOLDING ASSESSING O FFICERS ACTION IN IMPOSING PENALTY OF RS.1,68,947/-, IN PROCEEDINGS U /S.271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 2284/AHD/2013 (SHRI ASHISH P. PATEL VS. ACI T) A.Y. 1998-99 - 2 - 2. WE STRAIGHTWAY COME TO BASIC FACTS OF THE CASE. THE ASSESSING OFFICER HAD FRAMED A RE-ASSESSMENT IN ASSESSEES CASE ON 26 .03.2002 DISALLOWING QUANTUM INTEREST EXPENSES OF RS.6,06,492/-. HE MAD E THE SAID DISALLOWANCE AFTER OBSERVING THAT THE ASSESSEE ON THE ONE HAND H AD PAID INTEREST TO VARIOUS PARTIES WHEREAS IT HAD NOT CHARGED ALL OF ITS CREDI TORS LIKEWISE INTEREST AMOUNT. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) DELETED THE ABOVE QUANTUM DISALLOWANCE IN ORDER DATED 05.03.2003. THE REVENUE FILED ITA NO.2089/AHD/2003 BEFORE THIS TRIBUNAL. A CO-ORDINA TE BENCH IN ITS ORDER DATED 09.01.2009 RESTORED THE ISSUE BACK TO THE FIL E OF ASSESSING OFFICER TO BE DECIDED IN TUNE WITH A SIMILAR ORDER PASSED IN ASSE SSMENT YEAR 1995-96. THE ASSESSING OFFICER TOOK UP CONSEQUENTIAL ASSESSMENT. HE REITERATED THE VERY INTEREST DISALLOWANCE THEREIN. THE ASSESSEE DOES N OT APPEAR TO HAVE FILED ANY APPEAL. 3. WE NOW ADVERT TO THE IMPUGNED PENALTY PROCEEDING S. THE ASSESSING OFFICER QUOTED QUANTUM DEVELOPMENTS NARRATED IN PRE CEDING PARAGRAPH TO OBSERVE THAT THE ASSESSEES ACT AND CONDUCT RESULTI NG IN SAID INTEREST DISALLOWANCE AMOUNTING TO AN INSTANCE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. HE THUS IMPOSED THE IMPUGNED PENALTY OF RS.1,68,947/- IN ORDER DATED 26.03.2013 AS CONFIRMED IN LOWER APPELLATE PR OCEEDINGS. 4. WE HAVE HEARD RIVAL SUBMISSIONS. RELEVANT FINDI NGS PERUSED. THE SOLE ISSUE IN THE INSTANT CASE IS ABOUT CORRECTNESS OF T HE IMPUGNED PENALTY ARISING FROM INTEREST DISALLOWANCE MADE IN QUANTUM PROCEEDI NGS. WE HAVE ALREADY NARRATED THE FACT THAT THE SAID DISALLOWANCE DID NO T ARISE ON ACCOUNT OF ANY GENUINENESS ISSUE IN RAISING OF DEDUCTION CLAIM BUT BECAUSE OF THE FACT THAT THE ASSESSING OFFICER FOUND THE ASSESSEE TO HAVE PA ID INTEREST TO ITS CREDITORS AND NOT CHARGED FROM THE PERSONS HE HAD LENT HIS MO NEY. IT HAS FURTHER COME ON RECORD THAT THE ASSESSEE HAD OTHERWISE FILED ALL NECESSARY PARTICULARS ITA NO. 2284/AHD/2013 (SHRI ASHISH P. PATEL VS. ACI T) A.Y. 1998-99 - 3 - LEADING TO THE SAID DISALLOWANCE ON THE BASIS OF CO RRECTNESS THEREOF. THE ASSESSING OFFICERS RE-ASSESSMENT FRAMED ON 26.03.2 002 CONTAINS A SPECIFIC MENTION TO THIS EFFECT. WE OBSERVE IN THIS BACKDRO P THAT THE ASSESSEE CANNOT BE HELD TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME. IT IS FURTHER EVIDENT THAT THIS TRIBUNALS QUANTUM ORDER (SUPRA) RESTORED THE ISSUE IN LIGHT OF ITS OBSERVATIONS IN ASSESSMENT YEAR 1995-96 ONLY. WE THUS QUOTE HONBLE APEX COURTS DECISION IN CIT VS. RELIANCE PETROPROD UCTS 322 ITR 158(SC) THAT EACH AND EVERY QUANTUM DISALLOWANCE DOES NOT N ECESSARILY ATTRACT THE IMPUGNED PENAL PROVISION AND DIRECT THE ASSESSING O FFICER TO DELETE THE IMPUGNED PENALTY. 5. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF MARCH, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 24/03/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . / .