The DCIT, Circle-9, Ahmedabad V. M/s. Mahavir Corporation, Ahmedabad

ITA 2505/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1897 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 07-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Keywords: Condonation of delay

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.2505/AHD/2012 WITH CO NO.132/AHD/2013 / ASSTT. YEAR: 2008-2009 DCIT, CIR.9 AHMEDABAD. VS M/S.MAHAVIR CORPORATION 4, BINORI AMBIT 2 ND FLOOR, B/H. JAIN DERASAR THALTEJ CHAR RASTA SG HIGH WAY AHMEDABAD 380 054. PAN : AANFM 2386 A ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI G.C. DAXINI, SR.DR ASSESSEE BY : SHRI P.M. MEHTA, WITH SHRI GULAB THAKOR / DATE OF HEARING : 08/04/2016 / DATE OF PRONOUNCEMENT: 11/04/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF THE LD.CIT(A)-XV, AHMEDABAD DATED 3.8.2012 PASSED FOR T HE ASSTT.YEAR 2008-09. ITA NO.2505/AHD/2012 WITH CO 2 2. ON RECEIPT OF NOTICE IN THE REVENUES APPEAL, TH E ASSESSEE HAS FILED CROSS OBJECTION NO.132/AHD/2013. THE GRIEVANCE OF THE REVENUE IN ITS APPEAL IS THAT THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.12.60 LAKHS IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 15.12.2008 DECLARING A LOSS OF RS.40,50,6 10/-. THE LD.AO HAS RECORDED A FINDING THAT ON VERIFICATION OF THE BALA NCE SHEET, IT IS SEEN THAT THE ASSESSEE HAS BORROWED FUNDS FROM SEVERAL PARTIE S, IN TURN, THE AMOUNTS BORROWED WERE ADVANCED TO SEVERAL PERSONS. THE ASSESSEE HAS NOT CHARGED INTEREST. THE AO HAS DISALLOWED THE IN TEREST EXPENDITURE AND IN THIS WAY DISALLOWED THE LOSS. HE INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT, AND ULTIMATELY IMPOSED PENALTY OF RS.12.60 LAKHS. 4. ON APPEAL, THE LD.CIT(A) HAS DELETED THE PENALTY BY OBSERVING AS UNDER: 5. I HAVE PERUSED THE FACTS OF THE CASE AS ENUMERAT ED BY AO IN THE PENALTY ORDER. I HAVE PERUSED THE FACTS AS ENUMERAT ED BY AO. IN ASSESSMENT ORDER AND AS SUBMITTED BY APPELLANT IN W RITTEN SUBMISSION INCLUDING STATEMENTS OF FACTS. I HAVE PE RUSED VARIOUS CASE LAWS AS RELIED ON BY BOTH AO AND APPELLANT. AF TER CAREFUL CONSIDERATION OF THE FACTS, SUBMISSION AND CONTENTI ON OF BOTH AO AS WELL AS APPELLANT, I AM INCLINED TO ACCEPT THE C ONTENTION OF THE APPELLANT THAT HIS CASE IS NOT FIT FOR IMPOSITION O F PENALTY. CONSIDERING THE FACTS THAT APPELLANT VOLUNTARILY FI LED RETURN OF INCOME WITH LOSS IN THE FORM OF INTEREST BEYOND THE DUE DATE OF FILING OF RETURN OF INCOME AND HAS NOT CLAIMED CARR Y FORWARD OF SUCH LOSS, THE BONAFIDE OF THIS DISCLOSURE OF APPEL LANT CANNOT BE REJECTED AND DOUBTED. FURTHER OUT OF SUCH INTEREST EXPENSES, ITA NO.2505/AHD/2012 WITH CO 3 MAJORITY PORTION RELATED TO INTEREST TO PARTNER ON CAPITAL FOR WHICH PARTNERS HAD ALREADY SHOWN SUCH INCOME AND PAID TAX ES. SIMPLY BECAUSE APPELLANT AGREED FOR DISALLOWANCE OF LOSSES BY AO SO TO AVOID PROTECTED LITIGATION AND PEACE OF MIND, PENAL TY CANNOT BE IMPOSED FOR SUCH REVENUE NEUTRAL DISALLOWANCES. SIM ILARLY INFORMATION IN RESPECT OF ADDITION U/S. 68OF THE AC T WAS FURNISHED BY APPELLANT IN THE FORM OF NAME, PAN ETC. AND THER EFORE, PRIMARY ONUS WAS DISCHARGED. THE DISALLOWANCE AND ADDITION IN THAT CIRCUMSTANCE CANNOT BE SAID COMING UNDER THE PREVIE W OF FURNISHING INACCURATE PARTICULARS WITHOUT SPECIFIC EVIDENCES. IT IS THEREFORE THE AO IS DIRECTED DELETE THE PENALTY SO IMPOSED. THE APPELLANT GETS RELIEF ACCORDINGLY. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT THE RETURN WAS FILED BY THE ASSESSEE AFTER EXPIRY OF DU E DATE OF FILING OF RETURN UNDER SECTION 139(1) OF THE ACT. THE ALLEGE D INTEREST EXPENSES COULD NOT BE ALLOWED TO THE ASSESSEE AS DEDUCTION, BECAUSE IT HAS NO INCOME. THE ASSESSEE HAS LOSS ONLY. BENEFIT OF LO SS IS ALSO NOT ADMISSIBLE TO THE ASSESSEE, BECAUSE IT HAS FILED RE TURN AFTER EXPIRY OF DUE DATES, THEREFORE, IT CANNOT BE CLAIMED THE CARRY F ORWARD OF LOSS. IN SUCH CIRCUMSTANCES, NO MALA FIDE CAN BE ATTRIBUTED TO THE ASSESSEE. THERE CANNOT BE ANY ALLEGATION OF FURNISHING OF INACCURAT E PARTICULARS. THE ASSESSEE HAS SHOWN THE INTEREST EXPENSES WHICH AT T HE MOST COULD BE DISALLOWED, BUT IN THAT CASE ALSO, THE DEDUCTION WA S NOT ADMISSIBLE TO THE ASSESSEE, BECAUSE, THERE WAS NO POSITIVE INCOME, AN D THE LOSS WOULD NOT BE CARRIED FORWARD FOR SET OFF IN THE SUBSEQUENT YE ARS. THE LD.CIT(A) HAS EXAMINED THE DISPUTE WITH THIS ANGLE AND DELETE D THE PENALTY. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CI T(A), THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NO.2505/AHD/2012 WITH CO 4 6. AS FAR AS THE CO IS CONCERNED, THE REGISTRY HAS POINTED OUT THAT IT IS TIME BARRED BY 39 DAYS. THE ASSESSEE HAS FILED APPLICATION FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT OF SHRI N ITIN G. PATEL. AFTER GOING THROUGH THE EXPLANATION OF THE ASSESSEE, WE A RE SATISFIED WITH THE REASONS STATED IN THE APPLICATION AS WELL AS IN THE AFFIDAVIT THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT REASONS IN FIL ING THE CO BELATEDLY. WE CONDONE THE DELAY. HOWEVER, WE DO NOT FIND ANY MERIT IN THE CO, BECAUSE SUB-SECTION 4 OF SECTION 253 AUTHORIZES THE RESPONDENT TO FILE CO AGAINST ANY PART OF ORDER IMPUGNED IN THE APPEAL . IN THE PRESENT CO, THE ASSESSEE HAS NOT SHOWN ITS GRIEVANCES AGAINST A NY PART OF THE CIT(A)S ORDER, THEREFORE, IT IS NOT MAINTAINABLE. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL AS WELL AS CO, BOTH ARE DISM ISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND CO OF THE ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH APRIL, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER