ITO 9(2)-3, MUMBAI V. MAHARAJA BUILDERS P. LTD, MUMBAI

ITA 2500/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71096 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-03-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 30-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI H L KARWA, PRESIDENT & SHRI N K BILLAIYA, ACCOUNTANT MEMBER ITA NO.2500/MUM/2011 FOR ASST. YEAR: 2004-05 THE ITO 9(2)(3), MUMBAI VS. M/S. MAHARAJA BUILDERS PVT LTD , 4A, VIKAS CENTRE, 104, S V ROAD, SANTACRUZ (W) MUMBAI- 400 054 PAN AAACM7464M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SURENDRA KUMAR RESPONDENT BY : SHRI B V JHAVERI DATE OF HEARING : 12.09.2013 DATE OF PRONOUNCEMENT : 12.09.2013 O R D E R PER N.K.BILLAIYA (AM) : THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)-20, MUMBAI, DATED 19.01.2011, PERTAINING TO A.Y. 2004-0 5. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE CI T(A) ERRED IN MODIFYING THE PENALTY IN RELATION TO ADDITION OF RS.1,48,77,737/- IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. FACTS SHOW THAT THE SUB JECT MATTER OF PENALTY IS THE SUM OF RS.5,74,48,460/- ON ACCOUNT OF THE FOLLOWING ADD ITIONS : I. ESTIMATE OF NET PROFIT RS. 16,23,693 II. DISALLOWANCE OF BAD DEBTS RS.1,28,21,285 III. DISALLOWANCE OF DEPRECIATION RS. 4,32,759 2 ITA NO.2500/MUM/2011 AY:2004-05 IV. ADDITION U/S. 41(1) OF CESSATION OF LIABILITY RS.4,25,70,723 THE ASSESSEE STRONGLY CONTENDED THAT IT HAS FILED C OMPLETE DETAILS IN RESPECT OF ITS INCOME. THE ASSESSEE ALSO POINTED OUT THAT IT HAS FILED ENTIRE DETAILS RELATING TO BAD DEBTS WRITTEN OFF AND THE CLAIM OF DEPRECIATION. T HEREFORE, NO PENALTY SHOULD BE LEVIED , NEITHER FOR CONCEALMENT OF INCOME NOR FOR FILING OF INACCURATE PARTICULARS. THE SUBMISSIONS OF THE ASSESSEE DID NOT FIND FAVOUR FROM THE ASSESSING OFFICER WHO WENT ON TO LEVY PENALTY U/S. 271(1)(C) OF THE ACT. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) AND REITERATED THAT IT HAS SUBMITTED ENTIRE DETAILS RELATING TO THE IMPUGNED ADDITIONS. THE CIT(A) AFTER CONSID ERING THE FACTS AND SUBMISSIONS OBSERVED THAT THE ADDITIONS WERE BASED ON PARTICULA RS FURNISHED WITH THE RETURN WHICH WERE NOT FOUND TO BE INACCURATE OR FALSE. PL ACING RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE P ETRO PRODUCTS PVT. LTD. (322 ITR 158), THE CIT(A) DIRECTED TO CANCEL THE LEVY OF PEN ALTY IN RESPECT OF FIRST THREE ADDITIONS [(I) TO (III)] MENTIONED HEREINABOVE. HO WEVER, THE CIT(A) CONFIRMED THE LEVY OF PENALTY IN RESPECT OF ADDITION MADE ON ACCO UNT OF CESSATION OF LIABILITY TO THE TUNE OF RS.4,25,70,723/-. AGGRIEVED BY THIS THE RE VENUE IS BEFORE US. 3. THE DR RELIED UPON THE PENALTY ORDER. THE COUNS EL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE CIT(A). 4. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES. WE FIND THAT THE FIRST THREE ADDITIONS RELATE TO ESTIMATION OF P ROFIT, BAD DEBTS AND DEPRECIATION. WE AGREE WITH THE FINDINGS OF THE CIT(A) THAT THESE PARTICULARS WERE VERY MUCH AVAILABLE IN THE RETURN OF INCOME ITSELF. THEREFOR E, THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCT S LTD. (SUPRA), SQUARELY APPLY TO THE PRESENT CASE. THE CIT(A) HAS CONFIRMED THE LEV Y OF PENALTY IN RESPECT OF THE ADDITION ON ACCOUNT OF CESSATION OF LIABILITY AMOUN TING TO RS.4,25,70,723/- AND AS THE ASSESSEE IS NOT IN APPEAL, WE DO NOT FIND ANY REASO N TO INTERFERE WITH THE 3 ITA NO.2500/MUM/2011 AY:2004-05 MODIFICATIONS MADE BY THE CIT(A) TOWARDS THE LEVY O F PENALTY. THE ORDER OF THE CIT(A) IS ACCORDINGLY CONFIRMED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER 2013. SD/- SD/- (H L KARWA) (N.K.BILLAIYA) PRESIDENT ACCOUNTANT MEMBER MUMBAI, DT : 12 TH SEPTEMBER, 2013 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, MUMBAI 4. THE CIT (A)-11, MUMBAI 5. THE DR, B- BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI