ACIT 8(1), MUMBAI V. ARROW COATED PRODUCTS LTD, MUMBAI

ITA 3175/MUM/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6790 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 30-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 23-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Keywords: Bad and doubtful debts

Judgement Text

1 ITA 3175 /M/2010 M/ S ARROW COATED PRODUCTS LTD. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G BEFORE SHRI D.K. AGARWAL, J.M. AND SHRI R.K. PANDA, A.M. ITA NO. 3175/MUM/2010 ASSESSMENT YEAR 2004-05 ACIT 8(1), R. NO. 210, 2 ND FLOOR, AAYKAR BHAWAN, M.K. ROAD, MUMBAI - 20. VS. M/S ARROW COATED PRODUCTS LTD., 159, SANJAY BUILDING 5B, MITTAL INDUSTRIAL ESTATE, ANDHERI (E), MUMBAI.400059. PAN AAACA9525H APPELLANT RESPONDENT APPELLANT BY SHRI C.G.K. NAIR RESPONDENT BY NONE ORDER PER R.K. PANDA A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DT. 16.2.2010 OF CIT(A)- 16, MUMBAI RELATING TO A.Y. 2004-05. 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. IT IS SEEN THAT THE NOTICE ISSUED BY THE REGISTRY THROUGH RPAD WAS RETU RNED UN-SERVED. T HEREFORE, THE MATTER IS BEING DECIDED ON THE BASIS OF MATERIAL AV AILABLE ON RECORD AND AFTER HEARING THE LD. D.R. 3. THE REVENUE IN THE GROUNDS OF APPEAL HAS BASICAL LY CHALLENGED THE ORDER OF THE LD. CIT(A) IN DELETING THE PENALTY OF ` 903730/- LEVIED BY THE A.O. U/S 271(1)(C) OF THE I.T. ACT ALTHOUGH THE ORDER OF THE LD. CIT(A) GIVING RELIEF TO THE ASSESSEE IN THE QUANTUM APPEAL IS PENDING BEFORE TH E TRIBUNAL. 2 ITA 3175 /M/2010 M/ S ARROW COATED PRODUCTS LTD. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF COATED AND PRINTING ITEMS. THE A.O. COMPLETED THE ASSESSMENT DETERMINING THE TOTAL INCO ME AT ` 18,47,390/- AFTER ALLOWING SET OFF OF BROUGHT FORWARD LOSSES OF EARLI ER YEARS AS AGAINST THE RETURNED INCOME OF ` 6,44,770/-. THE A.O. IN THE BODY OF THE ASSESSMEN T ORDER, APART FROM OTHER ADDITIONS, MADE DISALLOWANC E OF ` 10,19,109/- ON ACCOUNT OF BAD DEBTS. SIMILARLY, WHILE WORKING OUT THE BOOK PROFIT U/S 115JB, THE A.O. ADDED AN AMOUNT OF ` 70 LACS ON ACCOUNT OF PROVISION FOR DOUBTFUL DEBTS. THEREAFTER, HE INITIATED PENALTY PROCEEDING S AND LEVIED PENALTY OF ` 5,38,125/- BEING THE MINIMUM PENALTY @ 100% ON ACCO UNT OF ADDITION OF BAD DEBTS OF ` 10,19,109/ AND PROVISION FOR DOUBTFUL DEBTS ` 70 LACS. 4.1 IN APPEAL, THE LD. CIT(A) DELETED THE PENALTY L EVIED BY THE A.O. ON THE GROUND THAT THE QUANTUM ADDITION HAS BEEN DELETED B Y THE LD. CIT(A). AGGRIEVED BY SUCH ORDER OF THE LD. CIT(A), THE REVE NUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL AVAILABLE ON RECORD. THE LD. D.R. FILED A COPY OF THE ORDER OF THE TRIBU NAL IN THE QUANTUM APPEAL WHEREIN THE TRIBUNAL HAS DELETED THE ADDITION OF BA D DEBTS OF ` 10,19,109/- AND SUSTAINED THE PROVISION FOR DOUBTFUL DEBTS OF ` 70 LACS. THEREFORE, THE ORDER OF THE LD. CIT(A) IN CANCELLING THE PENALTY L EVIED U/S 271(1)(C) ON ACCOUNT OF BAD DEBTS OF ` 10,19,109/- BEING IN ORDER IS UPHELD. 5.1 SO FAR AS THE ISSUE RELATING TO CANCELLATION OF PENALTY LEVIED ON ACCOUNT OF PROVISIONS FOR DOUBTFUL DEBTS OF ` 70 LACS IS CONCERNED, WE FIND THE TRIBUNAL HAS SUSTAINED THE ADDITION MADE BY THE A.O. AND REV ERSED THE ORDER OF THE LD. CIT(A). THE LD. CIT(A), WHILE ADJUDICATING THE PEN ALTY APPEAL HAS DELETED THE PENALTY ON THIS ADDITION ON THE GROUND THAT THE LD. CIT(A) HAS DELETED THE ADDITION AND HE HAS NOT CANCELLED THE PENALTY ON ME RIT. SINCE THE TRIBUNAL HAS REVERSED THE ORDER OF THE LD. CIT(A) REGARDING ADDI TION OF ` 70 LACS ON ACCOUNT OF 3 ITA 3175 /M/2010 M/ S ARROW COATED PRODUCTS LTD. PROVISIONS FOR DOUBTFUL DEBTS AND SINCE THE LD. CIT (A) HAS NOT DECIDED THE ISSUE ON MERIT, THEREFORE, WE, IN THE INTEREST OF JUSTICE , DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUD ICATION. NEEDLESS TO SAY THE LD. CIT(A) SHALL GIVE REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. WE HOLD A ND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY PARTL Y ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S PARTY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN AT THE TIME OF HEARIN G I.E. ON 30.5.2011. SD/- SD/- (D.K. AGARWAL) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 30 TH MAY, 2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 16, MUMBAI 4. THE CIT - 8 MUMBAI 5. THE DR BENCH, G 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 4 ITA 3175 /M/2010 M/ S ARROW COATED PRODUCTS LTD. DATE INITIALS 1 DRAFT DICTATED ON 30.5.2011, SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 30.5.2011 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER