Godavari Industries, Warangal, Hyderabad V. ITO, Ward-2, Warangal, Warangal

ITA 240/HYD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6408 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 09-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2016
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Wrong claim; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 240/HYD/2016 ASSESSMENT YEAR: 2009-10 M/S. GODAVARI INDUSTRIES, HASANPARTHY, WARANGAL DIST., [PAN: AAMFM7472Q] VS INCOME TAX OFFICER, WARD-2, WARANGAL (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI T. CHAITANYA KUMAR, AR FOR REVENUE : SHRI K.E. SUNIL BABU, DR DATE OF HEARING : 30-06-2016 DATE OF PRONOUNCEMENT : 13-07-2016 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE CONFIRMATI ON OF PENALTY U/S. 271(1)(C) OF THE INCOME TAX ACT [ACT] B Y THE CIT(A), LEVIED BY THE ASSESSING OFFICER (AO) CONSEQUENT TO THE ADJUSTMENT OF THE CARRIED FORWARD LOSS OF EARLIER YEARS. 2. BRIEFLY STATED, ASSESSEE-FIRM IS ENGAGED IN THE BUS INESS OF PADDY AND TRADING OF RICE. IT FILED ITS RETURN OF INCO ME ADMITTING AN INCOME OF RS. 16,79,233/-. IN THE COMPUTATION OF INCO ME, ASSESSEE CLAIMED BROUGHT FORWARD BUSINESS LOSS FROM AY. 2008-09 OF RS. 7,04,225/- AND CLAIMED SET OFF. IN THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE FILED A LETTER DT. 18-10-2011 S TATING THAT THE SAID LOSS WAS ALREADY ADJUSTED AGAINST THE INCOME OF E ARLIER YEAR. AO DISALLOWED THE AMOUNT BUT INITIATED PENALTY PROCEED INGS. AO WAS OF THE OPINION THAT ASSESSEE HAS CONCEALED INCOME/ FURNISHING I.T.A. NO. 240/HYD/2016 M/S. GODAVARI INDUSTRIES :- 2 -: INACCURATE PARTICULARS AND THEREFORE, LEVIED PENALTY O F RS. 3,10,306 ON THE LOSS SO DISALLOWED. 3. BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT AS PER THE RETURN OF INCOME FOR AY. 2007-08 FILED ON 15-11-2007, THER E WAS A LOSS OF RS. 11,26,700/- WHICH WAS PARTIALLY SET OFF IN AY. 2 008-09 AND IN THAT RETURN, A LOSS OF RS. 7,04,230/- PERTAINING TO AY. 2007-08 WAS CLAIMED TO BE CARRIED FORWARD. IN THE RETURN FOR AY. 2009-10 FILED ON 30-03-2010, THE SAID LOSS WAS SET OFF, BUT IN THE C OURSE OF ASSESSMENT THE SAME WAS WITHDRAWN AS SUCH LOSS WAS SET OFF IN EARLIER YEAR, AS ASSESSEE HAS OFFERED HIGHER INCOME IN THE COURSE OF ASSESSMENT. IT WAS SUBMITTED THAT IT IS ONLY A MISTAKE IN CLAIMING THE CARRIED FORWARD LOSS, BUT THERE IS NO INTENTION OF E ITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PAR TICULARS. 4. LD. CIT(A) WHILE DELETING THE PENALTY ON THE ESTIMA TED DISALLOWANCE OF EXPENDITURE, HOWEVER, CONFIRMED THE PENALTY ON THE CLAIM OF LOSS STATING AS UNDER: 6. ON FURTHER VERIFICATION IT HAS NOTICED THAT SC RUTINY ASSESSMENT FOR AY. 2007-08 WAS COMPLETED ON 23.12.2 009 CONVERTING LOSS RETURN OF RS. 11,26,701/- TO INCOME OF RS. 24,18,559/-. ONLY ON SUBSEQUENT DATE I.E. 03.08.20 10, RETURN FOR AY. 2009-10 WAS FILED AGAIN CLAIMING LOSS OF RS. 7, 04,225/-. AS PER THE SCRUTINY ASSESSMENT FOR AY. 2007-08 THERE WAS N O LOSS TO BE CARRIED FORWARD. DESPITE THIS FACT, THE APPELLANT CLAIMED THIS LOSS AGAINST THE INCOME OF RS. 2009-10. THIS CERTAINLY AMOUNTS TO FURNISHING OF THE INACCURATE PARTICULARS RESULTING IN CONCEALMENT OF INCOME. THE APPELLANTS PLEA THAT ADDITION WAS ACC EPTED BY HIM, THEREFORE NO PENALTY CAN BE LEVIED IS NOT ACCEPTABL E, AS APPELLANT ACCEPTED SUCH ADDITION ONLY AFTER THE DEPARTMENT DE TECTED SUCH LAPSE AND THE APPELLANT HAS NO OTHER ALTERNATIVE EX CEPT TO ACCEPT SUCH DISALLOWANCE. THEREFORE WITH REFERENCE TO THI S ISSUE OF WRONG CLAIM OF CARRIED FORWARD LOSS, PENALTY U/S. 271(1)( C) IS CONFIRMED. ASSESSEE IS AGGRIEVED. I.T.A. NO. 240/HYD/2016 M/S. GODAVARI INDUSTRIES :- 3 -: 5. LD. COUNSEL SUBMITTED THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY WHILE STATING THAT IT IS A WRONG C LAIM OF CARRIED FORWARD LOSS. HE REFERRED TO THE EARLIER YE ARS ORDERS TO SUBMIT THAT EVEN THOUGH SAID LOSS WAS SET OFF BY THE TIME RETURN WAS FILED, AT THE TIME OF FILING THE RETURN ONLY PREVI OUS YEARS RETURN WAS TAKEN AS BASIS IN WHICH THE SAID CLAIM WAS MADE AND THE ASSESSMENT ORDER IN EARLIER YEAR IE. AY 2007-08 WAS OMITTED TO BE CONSIDERED AT THE TIME OF UPLOADING THE RETURN. IT IS A MISTAKE WHICH RESULTED IN SET OFF OF LOSS BUT ASSESSEE HAVING REALISED ADMITTED BEFORE THE AO AND NO PENALTY CAN BE RELIVED ON SUCH CLAIMS. LD. COUNSEL RELIED ON THE DECISION OF THE H ON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS P. LTD., REPORTED AS [322 ITR 158(SC)]. 6. LD. DR HOWEVER, SUPPORTED THE ORDERS OF THE AO/CIT( A). 7. I HAVE CONSIDERED THE ISSUE AND EXAMINED THE DOCUM ENTS PLACED ON RECORD. THERE IS NO DISPUTE WITH REFERENCE TO THE FACT THAT ASSESSEE HAD CLAIMED A CARRIED FORWARD LOSS OF R S. 7,04,225/- FROM AY. 2008-09. THIS AMOUNT WAS SET OFF TO THE PRO FIT AS PER THE P&L A/C AND NET INCOME OF RS. 16,79,230/- WAS OFFERE D IN THE RETURN FILED. HOWEVER, CONSEQUENT TO THE ADDITION MADE IN AY. 2007-08, THE LOSS OF RS. 11,26,701/- WHICH WAS THE BA SIS FOR BROUGHT FORWARD LOSS, HAS TURNED INTO PROFIT OF RS. 24 ,18,559/-. CONSEQUENTLY, THERE IS NO LOSS TO BE BROUGHT FORWARD F ROM AY. 2007-08. WITHOUT NOTICING THAT, ASSESSEE IN AY. 2009- 10 HAS CLAIMED THE PART OF THE LOSS OF AY. 2007-08. AS STATED, PART OF THE LOSS WAS ALSO SET OFF IN AY. 2008-09 WHICH IT SEEMS TO HAVE BEEN ACCEPTED WITHOUT ANY PENALTY PROCEEDINGS IN THAT YEAR. I.T.A. NO. 240/HYD/2016 M/S. GODAVARI INDUSTRIES :- 4 -: 7.1. BE THAT AS IT MAY, LD. CIT(A) WAS OF THE OPINION THAT IT IS A WRONG CLAIM MADE. A CLAIM WHETHER IT IS FACTUALLY MA DE OR WRONGLY MADE DOES NOT COME WITHIN THE PURVIEW OF EITHER CONCEA LMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PR ODUCTS P. LTD., REPORTED AS [322 ITR 158] (SUPRA) HAS CONSIDER ED AND HELD THAT MAKING A CLAIM WHICH COULD NOT BE JUSTIFIED DOES NOT GIVE RISE TO LEVY OF PENALTY. IN THIS CASE, IT IS NOT EVEN FALSE CLAIM MADE. AS PER ASSESSEE RECORD IT HAS GENUINELY SUFFERED LOSS I N AY. 2007-08 WHICH WAS PARTIALLY SET OFF IN AY. 2008-09 AND BALANC E WAS SET OFF IN AY. 2009-10 TO THE PROFITS EARNED. CONSEQUENT TO TH E ADDITIONS MADE IN AY. 2007-08, THE LOSS RETURN FILED IN THAT YEA R HAS BECOME POSITIVE AND THERE IS NO AMOUNT TO BE CARRIED FORWARD . THIS SORT OF ADJUSTMENTS ARE GENERALLY MADE U/S. 154/155, IF ASSES SEES RETURN WAS NOT SELECTED FOR SCRUTINY. JUST BECAUSE IT WAS S ELECTED FOR SCRUTINY, THE SAME, IN MY VIEW, DOES NOT ATTRACT ANY PEN ALTY. SINCE THESE CLAIMS OF CARRIED FORWARD AND SET OFF ARE TO BE DETERMINED ON THE BASIS OF THE ASSESSMENT RECORD, THIS DOES NOT COME WITHIN THE PURVIEW OF FURNISHING OF INACCURATE PARTICULARS BY ASSESSEE. CONSEQUENTLY, I AM OF THE VIEW THAT THE FACTS OF THE CASE DOES NOT ATTRACT ANY PENALTY U/S. 271(1)(C). PENALTY SO LEVIED IS CANCELLED. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2016 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH JULY, 2016 TNMM I.T.A. NO. 240/HYD/2016 M/S. GODAVARI INDUSTRIES :- 5 -: COPY TO : 1. M/S. GODAVARI INDUSTRIES, HASANPARTHY, WARANGAL DIST., C/O. SHRI T. CHAITANYA KUMAR, ADVOCATE, FLAT NO. 10 2, GOURI APARTMENTS, URDU LANE, HIMAYATNAGAR, HYDERABA D. 2. THE INCOME TAX OFFICER, WARD-2, WARANGAL. 3. COMMISSIONER OF INCOME TAX(APPEALS)-3, HYDERABAD , 4. THE PR. COMMISSIONER OF INCOME TAX-3, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.