Shri Ashish S. Sharma, Ahmedabad V. The ACIT, Circle-10, Ahmedabad

ITA 2825/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0403 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S V AGRAWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 2825/AHD/2013 / ASSESSMENT YEAR : 2009-10 ASHISH S. SHARMA, PROP. UTILITY SERVICE, 401-402, NIRMAN HOUSE, B/H.TIMES OF INDIA, ASHRAM ROAD, AHMEDABAD-380009 PAN : ACZPS 4427 L VS ACIT, CIRCLE-10, AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.V. AGRAWAL, AR REVENUE BY : SHRI SATISH SOLANKI, SR DR / DATE OF HEARING : 18/08/2016 / DATE OF PRONOUNCEMENT: 30/09/2016 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, AHMEDABAD DATED 23.09.2013 FOR AY 2009-10. 2. THE SOLITARY GROUND RAISED IS AS UNDER :- THE LEARNED CIT(A) HAS ERRED IN CONFIRMING LEVY OF PENALTY BY AO OF RS.1,89,300/- U/S 271(1)(C), WITHOUT CONSIDERING RE PLY OF ASSESSEE AND WITHOUT PROVING CONCEALMENT ON FACTS OF THE CASE. 3. THE BRIEF FACTS ARE THE ASSESSEE CLAIMED AN AM OUNT OF RS.5,56,933/- AS BAD DEBT RECOVERABLE FROM SHRI PRAJESH SHETH. O N QUESTION, THE ASSESSEE EXPLAINED THAT SHRI PRAJESH SHETH WAS ACCOUNTANT OF THE ASSESSEE WHO IS SUFFERING FROM MOUTH CANCER AND THE MONEY IS GIVEN TO HIM DURING THE COURSE OF REGULAR EMPLOYMENT FOR MAKING THE PAYMENT OF VARIOUS STATUTORY TAXES ETC. INSTEAD OF PAYING THE TAXES, SHRI PRAJ ESH SHETH USED THE AMOUNT FOR HIS OWN PURPOSES, LIKE HIS OWN TREATMENT AND OT HER EXPENSES. IT WAS CLAIMED THAT THE AMOUNT MAY BE ALLOWED AS BAD DEBT OR EMBEZZLEMENT LOSS. THE LD. AO DID NOT QUESTION THE GENUINENESS OF THE LOSS, BUT HELD IT TO BE CAPITAL IN NATURE. PENALTY PROCEEDINGS WERE INITIA TED. THE ASSESSEE REITERATED THE FACTS AND CONTENDED THAT THIS WAS NO T A FIT CASE TO LEVY PENALTY. SMC-ITA NO. 2825/AHD/2013 ASHISH S. SHARMA VS. ACIT AY : 2009-10 2 THE LD. AO, HOWEVER, IMPOSED THE SAME WHICH WAS CON FIRMED BY THE LD. CIT(A). 4. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT NO QU ESTION HAS BEEN RAISED ABOUT THE GENUINENESS ABOUT THE AMOUNT TAKEN AWAY BY SHRI PRAJESH SHETH. THE LOSS HAS BEEN DISALLOWED ATTRIBUTING IT TO BE CAPITAL LOSS. ALL THE DETAILS WERE FURNISHED ALONGWITH RETURN. RELIANCE I S PLACED ON HONBLE SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. RELIA NCE PETROPRODUCTS PVT LTD, [2010] 322 ITR 158 (SC). ALL THE RELEVANT DET AILS AND EXPLANATION ARE FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCO ME. THEREFORE, PENALTY U/S 271(1)(C) CANNOT BE IMPOSED. 5. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE ORD ERS OF THE LOWER AUTHORITIES. 6. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LOWER AUT HORITIES. IN MY CONSIDERED VIEW, THE ASSESSEES CLAIM OF MONEY, BEI NG TAKEN AWAY BY SHRI PRAJESH SHETH, HAS NOT BEEN DISPUTED AND THE AMOUNT HAS BEEN HELD TO BE A CAPITAL LOSS IN NATURE. ALL THE RELEVANT DETAILS W ERE FILED ALONG WITH RETURN OF INCOME AND PROPER EXPLANATION WAS GIVEN. PENALTY C ANNOT BE IMPOSED MERELY BECAUSE THE REVENUES CLAIM IS HELD TO BE CA PITAL IN NATURE. THEREFORE, RESPECTFULLY FOLLOWING THE HONBLE SUPRE ME COURT JUDGMENT IN THE CASE OF RELIANCE PETROPRODUCTS PVT LTD (SUPRA), THE PENALTY IN QUESTION IS DELETED AND ASSESSEES APPEAL IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 30/09/2016 *BIJU T. SMC-ITA NO. 2825/AHD/2013 ASHISH S. SHARMA VS. ACIT AY : 2009-10 3 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD