SABERO ORGANICS GUJARAT LTD, MUMBAI V. ITO 7(2)(4), MUMBAI

ITA 2462/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6687 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 19-06-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 29-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Bad and doubtful debts; Revenue expenditure; Capital expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , . , ! BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.2462/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2002-03 SABERO ORGANICS GUJARAT LTD. A-301, PHOENIX HOUSE, 3 RD FLOOR, 462, SENAPATI BAPAT MARG, WORLI (E), MUMBAI 400 013. ' ' ' ' / VS. THE INCOME TAX OFFICER, WARD 7(2)(4), AAYKAR BHAVAN, MK ROAD, MUMBAI. $ ./ % ./ PAN/GIR NO. : AABCS 5313C ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) APPELLANT BY : MS. VASAN TI PATEL RESPONDENT BY : MS. NEERAJA PRADHAN ' ) *+ / DATE OF HEARING : 19/06/2014 ,-# ) *+ / DATE OF PRONOUNCEMENT : 19/06/2014 . / O R D E R PER I.P.BANSAL,J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST ORDER PASSED BY LD. CIT(A)-13, MUMBAI DATED 30/12/210 FOR ASSESS MENT YEAR 2002-03. GROUND OF APPEAL READ AS UNDER: 1. THE CIT (A) ERRED IN CONFIRMING THE ACTION OF TH E ASSESSING OFFICER (AO) IN IMPOSING PENALTY OF RS.72,50,000/- ON THE APPELLANT UNDER SECTION 271(1)(C) OF THE ACT. 2. THE CIT(A) ERRED IN CONFIRMING THE SAID PENALTY IMPOSED WITHOUT CONSIDERING THE WRITTEN SUBMISSIONS AND EVIDENCE FI LED BEFORE HIM IN THE COURSE OF THE APPELLATE PROCEEDINGS. ./ I.T.A. NO.2462/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2002-03 2 3. THE CIT(A) ERRED IN CONFIRMING THE PENALTY IMPOS ED IN RESPECT OF BAD DEBTS WRITTEN OFF BY OBSERVING IN HIS ORDER THAT EVEN DUR ING PENALTY PROCEEDINGS THE APPELLANT HAS FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE DEBTS HAD BECOME BAD. 4. THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT C OMPLETE DETAILS IN RESPECT OF BAD DEBTS WRITTEN OFF WERE FILED BEFORE HIM IN THE COURSE OF THE APPELLATE PROCEEDINGS. 5. THE CIT(A) ERRED IN NOT FOLLOWING THE RATIO OF T HE JUDGMENT OF THE HONBLE SUPREME COURT IN T.R.F. LTD REPORTED IN 190 TAXMAN 391 (SC). 6. THE CIT(A) ERRED IN CONFIRMING THE PENALTY IMPOS ED IN RESPECT OF DEFERRED REVENUE EXPENDITURE CLAIMED AS REVENUE EXPENSES BY OBSERVING THAT CAPITAL EXPENDITURE WAS CLAIMED BY THE APPELLANT AS REVENUE EXPENDITURE. 7. THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT T HE EXPENDITURE TREATED AS DEFERRED REVENUE EXPENDITURE FOR ACCOUNTING PURPOSE WAS ON ACCOUNT OF CONSUMPTION OF RAW MATERIAL AND POWER AND FUEL WHIC H WAS INCURRED IN THE NORMAL COURSE OF CONDUCT OF BUSINESS ACTIVITY AND H ENCE RIGHTLY CLAIMED AS REVENUE EXPENDITURE IN THE COMPUTATION OF TOTAL INC OME. 2. CONCEALMENT PENALTY OF RS.72,50,000/- WAS IMPOS ED IN RESPECT OF FOLLOWING TWO ADDITIONS. (I) RS. 10.06 LACS ON ACCOUNT OF BAD DEBTS. (II) RS.1,96,53,000/- ON ACCOUNT OF DEFERRED REVEN UE EXPENDITURE. 3. BOTH THE ABOVE ADDITIONS WERE CONTESTED IN APPEA LS AND VIDE ORDER DATED 31/7/2013 IN ITA NO.5151/MUM/2011 THE MATTER WAS RE STORED BACK TO THE FILE OF AO TO READJUDICATE THE ISSUES. IN PURSUANCE OF AFOREMENTIONED ORDER OF THE TRIBUNAL A FRESH ASSESSMENT ORDER HAS BEEN PASSED B Y A.O WHICH IS DATED 20/2/2014, COPY OF THIS ORDER IS PLACED AT PAGE 8 T O 11 OF THE PAPER BOOK. IN THE SAID ASSESSMENT ORDER BOTH THE ADDITIONS HAVE BEEN DELETED. IT MAY ALSO BE MENTIONED HERE THAT THOUGH PENALTY HAVE BEEN LEVIED ON THE ADDITION OF RS.1,96,53,000/- DISALLOWED ON ACCOUNT OF DEFERRED REVENUE EXPENDITURE, IN THE ASSESSMENT ORDER DATED 20/2/2014 THE DELETION IS O NLY TO THE EXTENT OF RS.1,47,39,750/- AS OUT OF RS.1,96,53,000/- A SUM O F RS.49,13,250/- WAS ALREADY ALLOWED AS DEPRECIATION AS DEFERRED REVENU E EXPENDITURE. THUS, BOTH THE ADDITIONS HAVE BEEN DELETED IN THE ASSESSMENT ORDER FRAMED IN PURSUANCE OF ./ I.T.A. NO.2462/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2002-03 3 ORDER PASSED BY THE TRIBUNAL. THEREFORE, BOTH THE ADDITIONS AS ON DATE DO NOT EXIST. 4. IN THIS VIEW OF THE SITUATION, AFTER HEARING BO TH THE PARTIES, AS ADDITIONS UPON WHICH IMPUGNED PENALTY HAS BEEN LEVIED , DO NO T EXIST, THERE IS NO JUSTIFICATION FOR LEVY OF CONCEALMENT PENALTY AND T HE SAME IS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/06/2014 . . ) ,-# / 0'1 19/06/2014 - ) 2 SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; 0' DATED 19/06/2014 . ' . .VM , SR. PS . . . . ) )) ) '*3 '*3 '*3 '*3 43#* 43#* 43#* 43#* / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 5 ( ) / THE CIT(A)- 4. 5 / CIT 5. 362 '*' , , / DR, ITAT, MUMBAI 6. 27 8 / GUARD FILE. .' .' .' .' / BY ORDER, (3* '* //TRUE COPY// 9 99 9 / : : : : (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI