FUSION INDIA PROJECT MANAGEMENT P. LTD, BANGALORE V. ASST CIT CIR 6(2), MUMBAI

ITA 379/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1794 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 02-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL KUMAR BH ANDARI
• Keywords: Bad and doubtful debts; Provision of bad debts
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.379/MUM/2014 ASSESSMENT YEAR: 2009-10 M/S FUSION INDIA PROJECT MANAGEMENT PVT. LTD. 43/49, 2 ND CROSS, PROMENADE ROAD, BANGALORE-560005 . PAN: AABCF1864D VS. ACIT COMPANY CIRCLE-6(2), MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL KUMAR BH ANDARI REVENUE BY : SHRI G.M.DOSS (DR ) DATE OF HEARING : 02.12.2015 DATE OF PRONOUNCEMENT : 31.12.2015 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-12, MUMBAI DATED 07.10.2013 WHEREIN THE PENALTY ORDER PASSED B Y THE ASSESSING OFFICER (AO) U/S 271(1)(C) OF THE ACT WAS UPHELD. 2. THE BRIEF FACT OF THE CASE ARE THAT THE ASSESSEE HA S FILED RETURN OF INCOME ON 30.09.2009, FOR ASSESSMENT YEAR (AY) 2009-10 DECLAR ING NIL INCOME, BY CLAIMING LOSS OF RS. 4,41,09,738/- AND THEREAFTER FILED REVI SED RETURN TWICE I.E. ON 15.03.2010 AND 14.01.2010, RESPECTIVELY AND THE LOSS FROM INIT IAL FIGURE OF RS. 4,41,09,738/- TO RS. 2,90,90,334/- WAS SHOWN. THE RETURN OF INCOME W AS PROCESSED U/S 143(1) ON 31.10.2010 AND SUBSEQUENTLY TAKEN FOR SCRUTINY AND ASSESSMENT ORDER U/S 143(3) WAS 2 ITA NO. 379/M/2014 M/S FUSION INDIA PROJECT MANAGEM ENT PVT. LTD . PASSED ON 05.12.2011, DETERMINING THE TOTAL INCOME OF LOSS OF RS. 2,18,98,066/- BY MAKING ADDITION OF DOUBTFUL DEBTS OF RS. 71,92,268/ - , WHICH THE ASSESSEE HAS NOT ADDED BACK TO THE TOTAL INCOME. 3. AGAINST THE ORDER OF ASSESSMENT, ASSESSEE HAS NOT P REFERRED ANY APPEAL AND THUS THE AO FORM HIS OPINION FOR INITIATING PENALTY ON 05.12 .2011, FOR FURNISHING INACCURATE PARTICULAR OF INCOME ON ACCOUNT OF DOUBTFUL DEBTS A ND INFLICTED A PENALTY OF RS. 22,22,410/- IN ITS ORDER DATED 30.05.2012, AGAINST WHICH THE APPEAL WAS PREFERRED BEFORE THE CIT(A). 4. THE CIT(A) WHILE DEALING WITH THE APPEAL UPHELD THE PENALTY AND DISMISSED THE APPEAL IN ITS ORDER DATED 07.10.2013 AGAINST WHICH THE PRE SENT APPEAL IS FILED BEFORE US. 5. WE HAVE HEARD THE AUTHORISED REPRESENTATIVE (AR) AN D DEPARTMENTAL REPRESENTATIVE (DR) OF THE REVENUE AND PERUSED THE MATERIAL AVAILA BLE ON RECORD. 6. THE AR OF THE ASSESSEE HAS ARGUED THAT IN FACT THE TAX RETURN PREPARER AND COMPUTED THE LOSS FOR THE RELEVANT AY AND DULY ADDED BACK TH E ADMISSIBLE ITEMS AND INADVERTENTLY OMITTED TO ADD BACK THE PROVISIONS OF BDS AMOUNTING TO RS. 71,92,268/- ALTHOUGH ALL ITS FULL PARTICULARS HAD BEEN DISCLOSE D IN THE AUDITED FINANCIAL STATEMENT OF THE ASSESSEE AND DURING THE ASSESSMENT PROCEEDING T HE REPRESENTATIVE OF ASSESSEE VOLUNTARILY CONSENTED FOR PROVISION OF BAD DEBTS AN D THE LOSS WAS RECOMPUTED AT RS. 2,18,98,066/-, HENCE THERE WAS NO CONCEALMENT OF FA CT NOR INACCURATE PARTICULAR FILED BEFORE THE AO, AND THE AO AS WELL AS THE FIRST APPE LLATE AUTHORITY (FAA) FAILED TO PROPERLY APPRECIATE THE FACT OF THE CASE. 7. WE HAVE PERUSED THE ASSESSMENT ORDER DATED 05.12.20 11, WHEREIN THE AO IN PARA 5 OF ITS ORDER HAS OBSERVED THAT IN PROFIT & LOSS A/C, T HE ASSESSEE HAS DEBITED PROVISIONS OF DEBT AMOUNTING TO RS. 71,92,268/- AND AFTER CONSIDE RING THE EXPLANATION ATTACHED TO SECTION 36(1)(VII) THE AMOUNT OF DEBT WAS ADDED BAC K TO THE TOTAL INCOME OF THE ASSESSEE AND THE TOTAL LOSS OF ASSESSEE WAS ASSESSE D RS. 2,18,98,066/- (2,90,90,334 71,92,268 = 2,18,98,066/-). 8. THE AR OF THE ASSESSEE FURTHER RELIED UPON THE CASE TITLED AS CIT VS. ECS LTD. REPORTED VIZ. (2010) 194 TAXMAN 311/336 ITR 162 AND CIT VS. ZOOM COMMUNICATION PVT. LTD. REPORTED VIDE 327 ITR 510 (DEL.) WHEREIN THE HONBL E DELHI HIGH COURT IN BOTH THE MATTERS HAS CONSIDERED THAT: SO LONG AS ASSESSEE HAS NOT CONCEALED ANY MATERIAL FACT OR ANY FACTUAL INFORMATION GIVEN BY HIM HAS NOT BEEN FOUND TO BE I NCORRECT, HE WILL NOT BE LIABLE TO IMPOSITION OF PENALTY U/S 271(1)(C), EVEN IF CLAIM MADE BY HIM IS 3 ITA NO. 379/M/2014 M/S FUSION INDIA PROJECT MANAGEM ENT PVT. LTD . UNSUSTAINABLE IN LAW PROVIDED THAT HE EITHER SUBSTA NTIAL EXPLANATION OFFERED BY HIM OR EXPLAINED EVEN IF NOT SUBSTANTIATED IS FOUND TO BE BONAFIDE. EVEN IF THE ASSESSEE MAKE A CLAIM WHICH IS NOT ONLY INCORRECT I N LAW, BUT IS WHOLLY WITHOUT ANY BASIS AND EXPLAINED FURNISHED BY HIM FOR MAKING SUCH CLAIM IS NOT FOUND TO BE BONAFIDE IS NOT LIABLE TO PENALTY FOR CONCEA LMENT OF INCOME . 9. WE FIND THAT IN THE PRESENT CASE THE ASSESSEE HAS M ERELY DUE TO INADVERTENT OMISSION ADDED BACK THE BAD DEBTS OF RS. 71,92,261/- THOUGH IT WAS DISCLOSED IN THE AUDITED FINANCIAL STATEMENT, HENCE THERE WAS NO CONCEALMENT OF FACT BY THE ASSESSEE AND THE ORDER DATED 30.05.2012 PASSED BY AO IS TOTAL MISCON CEIVED AND THE SAME IS SET-ASIDE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ACCEPTED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DECEMBER 2015. SD- SD- (N.K.BILLAIYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 31 /12/2015 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/