Narmada Iron & Associates Pvt. Ltd., Ahmedabad V. The Dy.CIT, Circle-5, Ahmedabad

ITA 3627/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9244 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L SHARMA
• Assessee Lawyers: A L THAKKAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER) ITA. NO: 3627/AHD/2015 (ASSESSMENT YEAR: 2011-12) NARMADA IRON ASSOCIATES PVT. LTD. A/802, NIRMAN COMPLEX, OPP: HAVMOR, STADIUM CIRCLE, NAVRANGPURA, AHMEDABAD V/S THE DY. COMM. OF INCOME TAX CIRCLE-5, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCN 9675J APPELLANT BY : SHRI A.L. THAKKAR, AR RESPONDENT BY : SHRI B. L. SHARMA SR. D.R. ( )/ ORDER DATE OF HEARING : 08 -03-201 6 DATE OF PRONOUNCEMENT : 09 -03-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE O RDER OF THE LD. CIT(A)-9, AHMEDABAD DATED 14.08.2015 PERTAINING TO A.Y. 2011-12. ITA NO. 3627 /AHD/2015 . A.Y. 2011-1 2 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO THE L EVY OF PENALTY OF RS. 3,30,000/- U/S. 271(1)(C) OF THE ACT. 3. THE CAUSE FOR THE LEVY OF PENALTY IS THE ADDITION O F PROVISION FOR FOREX GAIN MADE BY THE A.O IN THE ASSESSMENT ORDER DATED 27.01.2014 MADE U/S. 143(3) OF THE ACT. DURING THE COURSE OF THE SC RUTINY ASSESSMENT PROCEEDINGS, THE A.O NOTICED THAT THE ASSESSEE HAS DEDUCTED AN AMOUNT OF RS. 26,88,073/- AS PROVISION FOR FOREX GA IN FROM THE PROFITS AS PER PROFIT AND LOSS ACCOUNT WHILE CALCULATING TA XABLE INCOME. THE A.O FURTHER FOUND THAT THE SAID AMOUNT WAS SUBSEQUE NTLY REVERSED IN A.Y. 2012-13 AND THE SAME HAS BEEN OFFERED TO TAX. HOWEVER, THE A.O FOUND THAT IN A.Y. 2010-11, A SIMILAR TREATMENT WAS GIVEN TO THE PROVISION FOR FOREX GAIN OF RS. 9,77,806/- IN THE C OMPUTATION OF INCOME FOR A.Y. 2010-11 WHICH WAS NOT FOUND TO BE REVERSED AND OFFERED FOR TAXATION DURING THE YEAR UNDER CONSIDERATION. 4. WHEN THIS WAS BROUGHT TO THE NOTICE OF THE ASSESSEE , THE ASSESSEE IMMEDIATELY ACCEPTED ITS MISTAKE AND THE SAME WAS O FFERED TO TAXATION. 5. THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT W ERE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 6. DURING THE PENAL PROCEEDINGS, THE ASSESSEE REITERAT ED THAT DUE TO OVERSIGHT THE FOREX GAIN OF A.Y. 2010-11 COULD NOT BE ADDED IN THE COMPUTATION OF INCOME. THE EXPLANATION OF THE ASSES SEE DID NOT FIND FAVOUR WITH THE A.O WHO WENT ON TO LEVY PENALTY OF RS. 3,30,000/-. ITA NO. 3627 /AHD/2015 . A.Y. 2011-1 2 3 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. THE LD. CIT(A) DECLINED TO AGREE THAT THE OMISSION WAS A BONA FIDE OMISSION, THE LD. CIT(A) WAS ALSO CONVINCED TH AT THE INSTANT CASE UNDER THE CATEGORY OF CONCEALING THE PARTICULARS OF INCOME AND ALSO FURNISHING INACCURATE PARTICULARS OF INCOME. THE LE VY OF PENALTY WAS CONFIRMED. AGGRIEVED BY THIS, THE ASSESSEE IS BEFOR E US. LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. THE LD. D.R. STRONGLY SUPPORTED THE OR DERS OF THE REVENUE AUTHORITIES. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE FIND THAT THE MISTAKE OF THE ASSESSEE IS A BONA FIDE MISTAKE, THE TREATMENT OF FOREX GAINS IN A.Y. 2011-2012 WAS REVERSED IN A.Y. 2012-13 BUT A SIMILAR TREATMENT WA S NOT GIVEN TO THE FOREX GAINS OF A.Y. 2010-11. IT APPEARS THAT ALL TH AT HAS HAPPENED IN THE PRESENT CASE IS THAT THROUGH A BONA FIDE AND IN ADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FAILED TO ADD THE PROVISION FOR FOREX TO ITS TOTAL INCOME. THIS CAN ONLY BE DESCRIB ED AS A HUMAN ERROR WHICH WE ARE ALL PRONE TO MAKE. THE ASSESSEE SHOULD HAVE BEEN CAREFUL CANNOT BE DOUBTED, BUT THE ABSENCE OF DUE C ARE, IN A CASE SUCH AS THE PRESENT, DOES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. 9. IN OUR CONSIDERED OPINION AND THE UNDERSTANDING OF THE FACTS, THE ISSUES ARE IDENTICAL AS CONSIDERED BY THE HONBLE S UPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. 348 ITR 306. GIVEN THE PECULIAR FACTS OF THE CASE IN HAND, THE IMPOSITION OF PENALTY ON THE ASSESSEE IS NOT JUSTIFIED. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE A.O TO DELETE THE PENALTY SO LEVIED. ITA NO. 3627 /AHD/2015 . A.Y. 2011-1 2 4 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09 - 03 - 2016 SD/- SD/- (KUL BHARAT) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDA BAD