Besto Tradelink Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(2), Ahmedabad

ITA 372/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9051 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-02-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 05-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMIR VAKIL
• Keywords: Wrong claim; Reason to believe; Reassessment proceedings
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.372/AHD/2014 ( / ASSESSMENT YEAR : 2002-03) BESTO TRADELINK PVT.LTD. 9 TH FLOOR, B.D. PATEL HOUSE NARANPURA ROAD AHMEDABAD / VS. THE ITO WARD-1(2) AHMEDABAD-380 015 $ ./ ./ PAN/GIR NO. : AAACB 6241 P ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : NONE ($'*) / RESPONDENT BY : MR. SAMIR VAKIL, SR.DR +,*- / DATE OF HEARING 23/02/2017 ./0*- / DATE OF PRONOUNCEMENT 02/03/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-6, AHMED ABAD [CIT(A) IN SHORT] DATED 13/12/2013 FOR THE ASSESSMENT YEAR (AY) 2002-03. 2. BRIEFLY STATED, THE ASSESSEE ORIGINALLY FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS.NIL. THE CASE WAS SE LECTED FOR SCRUTINY ITA NO.372/AHD/ 2014 BESTO TRADELINK PVT.LTD. VS. ITO ASST.YEAR 2002-03 - 2 - ASSESSMENT AND THE ASSESSMENT ORDER UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') WA S FRAMED. THEREAFTER, CASE WAS REOPENED BY ISSUING NOTICE UNDER S.148 OF THE ACT ON THE PREMISES THAT THE ASSESSEE-COMPANY HAS DEBITED RS.5 ,48,624/- TO ITS P&L ACCOUNT TOWARDS SALE OF INVESTMENT WHICH CALLS FOR DISALLOWANCE. IT WAS ALLEGED THAT OUT OF THE AFORESAID AMOUNT, ONLY A SU M OF RS.98,624/- TOWARDS LONG TERM CAPITAL LOSS WAS DISALLOWED BY TH E ASSESSEE AND ADDED BACK AND BALANCE RS.4,50,000/- REMAINED TO BE DISALLOWED BY THE ASSESSEE WHILE COMPUTING THE TOTAL INCOME. IT WAS THUS ALLEGED THAT AFORESAID SUM OF RS.4,50,000/- HAS ESCAPED ASSESSME NT. IN THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE STRONGLY CHA LLENGED THE ACTION OF THE ASSESSING OFFICER (AO) IN INVOKING JURISDICTION UNDER S.147/148 OF THE ACT ON THE GROUND THAT THE ISSUE OF DISALLOWAN CE WAS ALREADY EXAMINED AT THE ORIGINAL ASSESSMENT WHICH WAS SUBJE CTED TO FURTHER APPEAL BEFORE THE CIT(A) AND THEREFORE THE SAME ISS UE CANNOT BE REVISITED BY THE AO IN THE GARB OF REASSESSMENT PROCEEDINGS O N ACCOUNT OF DOCTRINE OF MERGER. IT WAS FURTHER CONTENDED THAT NO NEW FACTS HAVE COME TO THE KNOWLEDGE OF THE AO FOR FORMATION AN AL LEGED BELIEF OF ESCAPEMENT OF INCOME. THE AO HOWEVER, REJECTED THE PLEA OF THE ASSESSEE AND DISALLOWED THE AFORESAID AMOUNT OF RS. 4,50,000/-. THE ASSESSED LOSS OF RS.14,31,000/- WAS ACCORDINGLY SCA LED DOWN TO THE AFORESAID EXTENT. IN CONSEQUENCE, PENALTY OF RS.1, 60,650/- DETERMINED AT ITA NO.372/AHD/ 2014 BESTO TRADELINK PVT.LTD. VS. ITO ASST.YEAR 2002-03 - 3 - 100% TAX SOUGHT TO BE EVADED WAS IMPOSED ON THE ALL EGED INACCURATE PARTICULARS OF INCOME VIDE ORDER DATED 15/03/2012. 3. THE CIT(A) CONFIRMED THE PENALTY IN FIRST APPE AL. 4. AGAINST THE IMPUGNED ORDER OF THE CIT(A) CONF IRMING THE PENALTY THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND NOTED THE RIVAL ARGUMENTS. ON PERUSAL OF THE FACTS AS NOTED ABOVE, IT IS APPARENT THAT LOSS ON SALE OF INVESTMENT WHICH INVITED DISAL LOWANCE AND CONSEQUENT PENALTY WAS DULY DECLARED IN THE PROFIT & LOSS ACCOUNT. THE ISSUE WAS EXAMINED IN THE ORIGINAL ASSESSMENT AND C ERTAIN ADDITIONS/DISALLOWANCES WERE CARRIED OUT. THIS AP ART, IT IS FROM THE FACTS EXISTING ON RECORD THAT THE REASON TO BELIEVE OF ES CAPEMENT OF INCOME WAS DERIVED. THUS, THE CASE MADE OUT BY THE ASSESS EE BEFORE AO IN QUANTUM ASSESSMENT ABOUT THE DEFICIT IN HOLDING JUR ISDICTION UNDER S.147 IS ITSELF SOMEWHAT PLAUSIBLE. BESIDES, IN VIEW OF THE PROPER DISCLOSURES ON RECORD ONE CANNOT SAY THAT THERE WAS A SUPPRESSI ON OF ANY PARTICULARS OF INCOME PER SE . THUS, THE CASE OF THE ASSESSEE SQUARELY FALLS WITHIN THE OBSERVATIONS MADE BY THE HONBLE S UPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. (20 10) 322 ITR 158 (SC). THE HONBLE SUPREME COURT IN THAT CASE OBS ERVED THAT A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT ITA NO.372/AHD/ 2014 BESTO TRADELINK PVT.LTD. VS. ITO ASST.YEAR 2002-03 - 4 - AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. THE DETAILS GIVEN IN THEMSELVES, WERE NO T FOUND TO BE INACCURATE PER SE . WE ALSO SIMULTANEOUSLY NOTE THAT IT IS A CASE OF A LOSS RETURN WHERE THE LOSS DETERMINED EARLIER HAS BEEN R EDUCED. THEREFORE, THE ERROR IN MAKING ALLEGED WRONG CLAIM IF ANY, CANNOT BE CHARACTERIZED AS MALAFIDE STRAIGHT AWAY. THUS, THERE ARE ENOUGH CIR CUMSTANCES EXISTING WHICH MILITATES AGAINST THE CASE FOR IMPOSITION OF PENALTY. THUS, THE PENALTY ORDER UNDER S.271(1)(C) IS LIABLE TO BE STR UCK DOWN. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 02 / 0 3 /201 7 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 02/ 03 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-6, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD