ACIT.,-8(1), MUMBAI V. CAMLIN FINE CHEMICAL LTD., MUMBAI

ITA 470/MUM/2013

• Counselvise Citation: 47019914 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: KISHORE RAJESHIRKE
• Keywords: Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI R.C SHARMA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 470/MUM/2013 ASSESSMENT YEAR: 2009-10 DCIT, RANGE-8(1) MUMBAI-. VS. M/S. CAMLIN FINE CHEMICAL LTD. PLOT NO. F/11 & F/12, WICEL, OPP. SEEPZ MAIN GATE, CENTRAL ROAD, ANDHERI (E) MUMBAI- 400 093 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :-AACCC 5235 E ASSESSEE BY : MR. KISHORE RAJESHIRKE REVENUE BY : SHRI M. L. PERUMAL DATE OF HEARING : 03.04.2014 DATE OF PRONOUNCEMENT : 22.04.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD.CIT(A)-16, MUMBAI DATED 31.10.2012 DELETING THE PENALTY OF RS.15,09,495/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX AC T IN RESPECT OF THE DISALLOWANCE OF RS.44,41,000/- BEING PROVISION FOR EXCHANGE LOSS ARISING ON FOREIGN CURRENCY TRANSACTIONS FOR THE ASSESSMENT YEAR 2009-10. 2. BRIEFLY STATED, THE AO, IN THE ASSESSMENT FRAMED U/S 143(3), HAD DISALLOWED AN AMOUNT OF RS.44,41,000/- ON THE GROUND THAT PROV ISION FOR FOREX LOSS AT THE YEAR END IS A NOTIONAL LOSS AND HENCE ACCORDINGLY NOT AL LOWED THE SAME IN THE YEAR UNDER CONSIDERATION, WHEREAS THE SAME CAN BE ALLOWED ONLY IN THE SUBSEQUENT YEAR. CONSEQUENTLY, THE AO HAD INITIATED THE PENALTY PROC EEDINGS AND LEVIED PENALTY U/S 271(1)(C) IN RESPECT OF THE SAID DISALLOWANCE/ADDIT ION. ON APPEAL AGAINST THE PENALTY ORDER, THE LD.CIT(A) HELD THAT THERE WAS NO CONCEAL MENT OR FURNISHING OF INACCURATE ITA NO. 470/MUM/2013 M/S. CAMLIN FINE CHEMICAL LTD. ASSESSMENT YEAR:2009-10 2 PARTICULARS OF INCOME AND DELETED THE PENALTY LEVIE D U/S 271(1)(C) OF THE ACT. AGGRIEVED BY THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE US. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS NOTED THAT THE ASSESSEE COMPANY HAS NOT PREFERRED AN APPE AL AGAINST THE QUANTUM ADDITION MADE BY THE AO. HOWEVER, THE ASSESSEE FILE D THE REVISED RETURN OF INCOME FOR THE SUBSEQUENT YEAR, NAMELY, 2010-11 AND CLAIME D THE DEDUCTION OF THE SAME SINCE THE AO FOR THE YEAR 2009-10 HAS HELD THAT FOR EX LOSS AT THE YEAR END IS NOTIONAL LOSS AND THE SAME CAN BE ALLOWED ONLY IN THE SUBSEQ UENT YEAR. IT IS OBSERVED THAT ASSESSEE COMPANY HAS DISCLOSED THE PARTICULARS OF F OREIGN CURRENCY TRANSACTIONS AND EXCHANGE LOSS AT THE YEAR END AND ALSO THE COMPANY HAS ACCOUNTED FOR THE SAID LOSS IN THE BOOKS OF ACCOUNT WHICH ACCORDING TO THE ASSE SSEE IS AS PER ACCOUNTING STANDARD-11. THE PERUSAL OF ASSESSMENT ORDER SUGGES TS THAT THE AO HAS FIXED UP THE AMOUNT STRAIGHT FROM THE NOTES TO THE ACCOUNT BUT H OWEVER, IT HAS NOT BEEN FOUND THAT THE ENTRIES PASSED IN THE BOOKS OF ACCOUNT ARE BOGUS OR NON GENUINE. MOREOVER, THE AO IN THE ASSESSMENT ORDER HAS ALSO M ENTIONED THAT THE SAID LOSS CAN BE ALLOWED IN THE SUBSEQUENT YEAR AND WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) FOR THE ASSESSMENT YEAR 2010-11, HAS IN FACT ALLOWED THE SAID LOSS. IN THIS BACKGROUND, THE LD.CIT(A) HAS CORRECTLY APPLIED THE RATIO OF THE HONBLE SUPREME COURT IN THE CASES OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. (2010) 322 ITR 158 (SC). AS REGARDS THE ARGUMENT OF THE LD.DR RELYING ON TH E DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATION P. LTD. (327) ITR 510 , IT IS PERTINENT TO MENTION THAT IN THE CASE OF ZOOM COMMUNICATION , THE ASSESSEE HAS DEBITED TO THE P&L ACCOUNT AND CLAIMED DEDUCTION OF INCOME TAX PAID AND FIXED ASSETS WRITTEN OFF WHEREIN THE ASSESSEE CONSIDERED THAT IT IS DUE TO OVER SIGHT, THE AMOUNT HAS BEEN CLAIMED AS DEDUCTION AND THEREBY PL EADED THAT THE SAME IS BONA FIDE MISTAKE ON ITS PART. IN THIS CONNECTION, IT IS RELEVANT TO MENTION THAT THE SAID DEDUCTION CLAIMED BY THE ASSESSEE IS NOT ALLOWABLE AS DEDUCTION IN ANY ASSESSMENT YEAR. HOWEVER, AS REGARDS THE CASE IN HAND, THE ALL OWABILITY OF DEDUCTION BY THE ASSESSEE IS ONLY DEPENDING ON THE YEAR OF ALLOWABIL ITY, WHICH HAS SUBSEQUENTLY BEEN ALLOWED BY THE AO IN THE ASSESSMENT YEAR 2010-11. I N VIEW OF THAT MATTER, THE FACTS OF THE CASE IN HAND IS DISTINGUISHABLE FROM THE FAC TS OF THE ASSESSEE IN ZOOM ITA NO. 470/MUM/2013 M/S. CAMLIN FINE CHEMICAL LTD. ASSESSMENT YEAR:2009-10 3 COMMUNICATION (SUPRA) AND HENCE THE RATIO LAID DOWN BY THE DELHI HIGH CO URT IN ZOOM COMMUNICATION IS NOT APPLICABLE TO THE CASE OF THE PRESENT ASSES SEE. IN VIEW OF THE AFOREMENTIONED DISCUSSION, WE ARE OF THE CON SIDERED OPINION THAT THE CASE OF THE ASSESSEE DOES NOT WARRANT FOR LEVY OF PENALTY U /S 271(1)(C) OF THE ACT AND THEREFORE, WE ARE IN CONFORMITY WITH THE DECISION O F THE LD.CIT(A) DELETING THE IMPUGNED PENALTY LEVIED BY THE AO. RESULTANTLY, THE ORDER OF THE LD.CIT(A) IS UPHELD. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF APRIL, 2014. SD/- SD/- (R.C. SHARMA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.04.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.