DCIT CIR 4, THANE V. VASAI VIKAS SAHAKARI BANK LTD, THANE

ITA 2869/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7896 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 06-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2015
• Court: TRIBUNAL
• Department Lawyers: PURUSHOTTAM KUMAR SR
• Keywords: Wrong claim; Bad and doubtful debts
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI DT GARASIA, JM AND SHRI RAJESH KUMAR, AM I.T.A. NO. 2869/MUM/2015 ASSESSMENT YEAR: 2010 - 11 DCIT CIRCLE - 4 6 TH FLOOR ASHAR IT PARK, ROAD NO. 16Z WAGLE INDL EST AT E, THANE (W) THANE - 400602 VS. VASAI VIKAS SAHAKARI BANK LTD. SAMJ MANDI, R OPP NEW ENGLISH SCHOOL , TAL & POST VASAI WEST THANE - 401202 PAN: A AAAV0519Q (APPELLANT) : (RESPONDENT) APPELLANT BY : SHRI PURUSHOTTAM KUMAR (SR. AR) RESPONDENTBY : SHRI BHUPENDRA SHAH DATE OF HEARING : 08/03 /2017 DATE OF PRONOUNCEMENT : 22 /03/2017 O R D E R PER D. T. GARASIA, JM: THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 03 , MUMBAI DATED 23/02/2015 , PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED B Y THE ASSESSING ACIT CIRCLE - 4 DATED 27/09/2013 UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 VASAI VIKAS SAHAKARI BANK ITA NO. 2869/M/2017 THE ONLY GROUND IN THIS APPEAL READS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) - 3, THANE HAS ERRED IN DELETING THE PENALTY U/S 271(1)(C) OF THE I. T. ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE BANK HAS CLAIMED DEDUCTION U/S 36(1)(VIIA) OF THE I. T. ACT, 1961 WITHOUT MAKING ANY PROVISION THEREOF OR DEBITING THE SAME TO THE PROFIT AND LOSS ACCOUNT THEREBY DELIBERATELY MAKING AN INCORRECT, ERRONEOUS AND FALSE CLAIM OF EXPENDITURE . THE SHORT FACTS OF THE CASE ARE AS UNDER: 2. THE ASSESSEE IS ENGAGED IN BANK ING BUSINESS. THE RETURN DECLARING AN INCOME OF RS.7,43,05,290/ - WAS FILED ON 13/10/2010. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T. ACT, 1961, DETERMINING TOTAL INCOME AT RS.8,04,32,340/ - VIDE ORDER DATED 26/03/2013. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, ON GOING THROUGH THE BOOKS OF ACCOUNTS, THE AO NOTICED THAT THE ASSESSEE HAD NOT MADE ANY PROVISION FOR BAD AND DOUBTFUL DEBTS. IN FACT, AGAINST THE ITEM OTHER PROVISIONS (A) BAD AND DOUBTFUL DEBT RESERVES, THE ASSESSEE HAD DEBITED THE AMOU NT AS RS.0 IN THE YEAR UNDER CONSIDERATION AS AGAINST RS.1,25,00,000/ - IN THE PREVIOUS YEAR. HOWEVER, IN COMPUTATION OF INCOME, THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.60,24,753/ - U/S 36(1)(VIIA). THE A.O., THEREFORE, CONCLUDED THAT SINCE THE ASSESSEE HAS NOT MADE ANY PROVISION UNDER THE HEAD B AD AND DOUBTFUL DEBT A S PER THE PROVISION OF SECTION 36(1)(VIIA) OF THE ACT, DURING THE YEAR, HENCE, HE DISALLOWED THE CLAIM OF RS.60,24,753/ - MADE IN THE COMPUTATION OF INCOME. THE AO LEVIED THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 AND SHOW CAUSE NOTICE WAS ISSUED THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS OF INCOME SIGNIFIED A DELIBERATE ACT OR OMISSION ON ANY PARTICULARS OF INCOME HE RELIED 3 VASAI VIKAS SAHAKARI BANK ITA NO. 2869/M/2017 UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCT IN THIS REGARD 322 ITR 158 (SC). 3. T HE ASSESSING OFFICER WAS NOT CONVINCED AND LEVIED THE PENALTY. MATTER CARRIED TO CIT(A) AND CIT(A)HAS DELETED THE PENALTY BY OBSERVING AS UNDER: - 6.1. CONSIDERING THE FACTS IN ENTIRETY AND ABOVE CASE LAWS, IN MY CONSIDERED OPINION, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961. THE APPELLANT HAS, MERELY FAILED TO PROVIDE THE PROVISIONS FOR BAD AND DOUBTFUL DEBTS, THOUGH T HE PROVISIONS MADE AS PER RBI GUIDELINES, IN THE EARLIER YEAR, WAS IN EXCESS. THE APPELLANT HAS DIRECTLY CLAIMED THE DEDUCTION IN THE COMPUTATION OF INCOME INSTEAD OF PROVIDING THE SAME IN THE BOOKS FOR DEBITING IN THE PROFIT & LOSS ACCOUNT, AS PER PROVISI ON OF THE ACT. THE APPELLANT, THEREFORE, NEITHER CONCEALED ANY INCOME NOR FILED ANY INACCURATE PARTICULARS OF INCOME. THE APPELLANT HAD DULY DISCLOSED THE FACTS OF INCOME IN ITS RETURN OF INCOME FILED BEFORE THE DEPARTMENT. IN VIEW OF THESE FACTS, PENALTY OF RS.18,61,650 / - IMPOSED U/S 271(1)(C) OF THE I.T. ACT, 1961, IS HEREBY DELETED. 4. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES . W E FIND THAT THE ASSESSEE HAS MERELY FAILED TO PROVIDE THE PROVISION IN BAD DEBT AND DOUBTFUL DEBT THOUGH THE PRO VISION IS MADE AS PER RBI GUIDELINES IN THE EARLIER WAS EXCESS. THE ASSESSEE HAS DIRECTLY CLAIM ED THE DEDUCTION IN COMPUTATION OF INCOME INSTEAD OF PROVIDING SAME IN THE BOOKS FOR DEBT ING IN THE P & L ACCOUNT AS PER THE PROVISIONS OF THE ACT. THEREFORE, TH E ASSESSEE HAD NEITHER CONCEALED NOR FILED ANY INACCURATE PARTICULARS OF INCOME . T HE ASSESSEE HAS DULY DISCLOSED THE FACT S OF INCOME IN ITS RETURN OF INCOME FILED BEFORE THE DEPARTMENT. THEREFORE, WE ARE OF THE VIEW THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE 4 VASAI VIKAS SAHAKARI BANK ITA NO. 2869/M/2017 DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCT (SUPRA) W HEREIN IT IS HELD THAT A MERE MAKING CLAIM WHICH IS NOT SUSTA INABLE IN LAW WIL L NOT AMOUNT TO FURNISH ING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE . S UCH CLAIM MADE IN RETURN CANNOT AMOUNT TO INACCURATE PARTICULAR AND NO PENALTY U/S 271(1)(C) CAN BE IMPOSED. WE RESPECTIVELY FOLLOWING THE SAME, WE CONFIRM THE ACTIO N OF CIT(A) . IN THE RESULT DEPARTMENTAL APPEAL IS DISMISSED. JUDGEMENT PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH , 2017. S D/ - SD/ - ( RAJESH KUMAR ) ACCOUNTANT MEMBER (D.T. GARASIA) JUDICIAL MEMBER MUMBAI, DATED: 22 ND MARCH, 2017 *RAHUL SHARMA* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, D BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI