Gujarat Carbon & Industries Ltd., Baroda V. The CIT(A)-I, Baroda

ITA 2629/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9741 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-10-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S CHOUDHARY
• Keywords: Bad and doubtful debts; Provision of bad debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 2629/AHD/2013 (ASSESSMENT YEAR: 2003-04) GUJARAT CARBON & INDUSTRIES LTD., 6 TH FLOOR, OFTEL TOWER, R. C. DUTT ROAD, BARODA 390 007 APPELLANT VS. CIT(A) I, BARODA RESPO NDENT PAN: AAACG7273L / BY ASSESSEE : URVASHI SHODHAN, A.R. / BY REVENUE : SHRI P. S. CHOUDHARY, SR.D.R. /DATE OF HEARING : 20.10.2016 /DATE OF PRONOUNCEMENT : 06.12.2016 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2003-04 ARISES AGAINST THE CIT(A)-I, BARODAS ORDER DATED 30.08.2013, IN APPEA L NO. CAB-I/47/12-13, IN PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME T AX ACT, 1961; IN SHORT THE ACT. ITA NO. 2629/AHD/2013 (GUJARAT CARBON & INDUSTRIES LTD. VS. CIT(A)) A.Y. 2003-04 - 2 - 2. THE ASSESSEES SOLE SUBSTANTIVE GROUND CHALLENGE S BOTH THE LOWER AUTHORITIES ORDER IMPOSING SECTION 271(1)(C) PENAL TY OF RS.24,98,000/- PERTAINING TO DISALLOWANCES/ADDITIONS OF ITS DIREC TORS EDUCATIONAL EXPENSES OF RS.33,95,589/- AND THAT OF PROVISION MADE FOR DO UBTFUL DEBTS OF RS.34,01,000/-. LD. COUNSEL FOR THE ASSESSEE STATE S AT THE OUTSET THIS TRIBUNALS CO-ORDINATE BENCH IN QUANTUM PROCEEDINGS APPEAL ITA NO.3231/AHD/2010 DECIDED ON 29.04.2014 HAS ALREADY DELETED THE FORME R DISALLOWANCE OF ITS DIRECTORS EDUCATIONAL EXPENSES HEREINABOVE. THE R EVENUE DOES NOT DISPUTE THESE QUANTUM DEVELOPMENTS. WE THUS HOLD THAT THE IMPUGNED CORRESPONDING PENALTY QUA FORMER DISALLOWANCE DOES HAVE NO LEGS T O STAND. THE SAME IS ACCORDINGLY DELETED. 3. WE NOW COME TO THE LATTER ISSUE OF DISALLOWANCE OF PROVISION OF DOUBTFUL DEBTS OF RS.34,01,000/-. THERE IS NO DISP UTE THAT THE ASSESSING OFFICER MADE THE SAID DISALLOWANCE IN THE IMPUGNED QUANTUM RE-ASSESSMENT FRAMED ON 24.03.2006 ON THE GROUND THAT THE SAME WA S IN THE NATURE OF A MERE PROVISION ONLY. WE NOTICE FROM THIS RE-ASSESS MENT ORDER THAT THE ASSESSEES REPLY SUBMITTED ON 11.10.2005 STATED TO HAVE INADVERTENTLY MISSED OUT THIS ASPECT FROM MAKING ADD BACK OF THE SUM IN QUESTION. IT IS IN THIS FACTUAL BACKDROP THAT BOTH THE LOWER AUTHORITIES TR EAT THE INSTANT CASE AS THAT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME A T ASSESSEES BEHEST. THEY HOLD THAT IT WAS ONLY BECAUSE OF SCRUTINY THAT ASSE SSEES PROVISION IN QUESTION MADE FOR DOUBTFUL DEBTS COULD SEE LIGHT OF THE DAY. 4. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUS ED. WE NOTICE THAT THE ASSESSEE HAS BEEN THROUGHOUT CLAIMING ITS MISTAKE I N NOT ADDING BACK THE CLAIM OF DOUBTFUL DEBTS MADE BY WAY OF A PROVISION ONLY TO BE IN THE NATURE OF AN INADVERTENT ERROR. IT DID NOT CHALLENGE THE SAME IN QUANTUM APPEAL FILED BEFORE THE CIT(A). WE OBSERVE IN THESE FACTS THAT A CO-ORDINATE BENCH OF THIS ITA NO. 2629/AHD/2013 (GUJARAT CARBON & INDUSTRIES LTD. VS. CIT(A)) A.Y. 2003-04 - 3 - TRIBUNAL IN (2012) 28 TAXMANN.COM 244 (KOL.) DCIT V S. VRB INVESTMENT (P) LTD. HOLDS THAT SECTION 271(1)(C) PENALTY IS NOT LE VIABLE IN SUCH A CASE OF MERE PROVISION OF BAD DEBTS MADE UNDER A BONAFIDE B ELIEF. WE ACCORDINGLY DELETE THE IMPUGNED PENALTY PERTAINING TO THIS LATT ER DISALLOWANCE AS WELL. 5. THIS ASSESSEES APPEAL IS ACCORDINGLY ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 06 TH DAY OF DECEMBER, 2016.] SD/- SD/- (N. K. BILLAIYA) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD: DATED 06/12/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0