MONAPLAN SECURITIES P.LTD, MUMBAI V. ACIT CEN CIR 22, MUMBAI

ITA 483/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3611 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 21-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA VIJAY
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 483/MUM/2014 (ASSESSMENT YEAR:2008-09) M/S. MONOPLAN SECURITIES PVT. LTD., 161, STAR CITY, 2 ND FLOOR, MANMAHAL TANK ROAD, MAHIM (WEST), MUMBAI 400 016 APPELLANT VS. ACIT, CENTRAL CIRCLE 22, MUMBAI RESPONDENT PAN: AAACS6162L /BY APPELLANT : SHRI MANDAR VAIDYA, A.R. /BY RESPONDENT : SHRI CHANDRA VIJAY, D.R. /DATE OF HEARING : 09.08.2016 /DATE OF PRONOUNCEMENT : 23.08.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-12, MUMBAI, DA TED 31.12.2013 FOR A.Y. 2008-09 ON FOLLOWING GROUNDS: ITA NO.483/MUM/14 A.Y. 08-09 [M/S. MONOPLAN SECURITIES PVT. LTD. VS. ACIT] PAGE 2 1.UNDER THE FACTS AND IN LAW, THE LEARNED CIT (A), ERRED IN CONFIRMING THE LEVY OF CONCEALMENT PENALTY OF RS. 6 1,800/- BEING 100% OF TAX SOUGHT TO HAVE BEEN EVADED ON THE AMOUNT OF RS.2,00,000/- BEING AN ADDITION ON ACCOUN T OF WRITE OFF LOANS UNDER SECTION 271 (1) (C) OF THE IN COME TAX ACT, 1961. 2. UNDER THE FACTS AND IN LAW, THE LEARNED CIT (A), FAILED TO APPRECIATE THE FACT THAT THE AMOUNT OF RS.2,00,000/ - DENOTES AMOUNT WRITE OFF AS IRRECOVERABLE LOAN AND ITS NOT PROVISION FOR DOUBTFUL ADVANCES WHICH SHOULD BE ADD ED BACK AS PER PROVISIONS OF INCOME TAX ACT, 1961. 3. UNDER THE FACTS AND IN THE LAW, THE LEARNED CIT( A) FAILED TO APPRECIATE THE FACT THAT THERE IS NEITHER CONCEALME NT OF INCOME NOR FURNISHING INACCURATE PARTICULARS AS CONTEMPLATED U/S 271(1) (C) OF THE INCOME TAX ACT. 1961. 4. THE VARIOUS JUDGMENTS RELIED ON BY CIT (A) ARE N OT APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE. 5. THE LEARNED CIT (A) FAILED TO APPRECIATE THE EXP LANATION FURNISHED TO HIM FOR THE ALLEGED DEFAULT U/S 271(1) (C). 6. THE LEARNED CIT (A) IS IN ERROR WHILE STATING TH AT THE APPELLANT'S CASE FALL SQUARELY WITHIN THE MEANING O F EXPLANATION TO SECTION 271 (1) (C) OF THE ACT. 7. THE LEARNED CIT (A) HAS PASSED THE PENALTY ORDER VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND EQUITIES. 2. BRIEF FACTS OF THE ISSUE IN DISPUTE AS REVEALING FROM THE PENALTY ORDER U/S.271(1)(C) OF THE ACT AS WELL AS A SSESSMENT ORDER U/S.143(3) OF THE ACT ARE THAT DURING ASSESSM ENT PROCEEDINGS, ASSESSING OFFICER HAD OBSERVED THAT AS SESSEE HAD CLAIMED A SUM OF RS.2 LACS AS PROVISION FOR DOUBTFU L ADVANCES. ASSESSEE WAS REQUIRED TO SHOW CAUSE AS TO WHY THE S AME SHOULD NOT BE DISALLOWED AS IT WAS NOT A DEDUCTIBLE EXPENSE. IN RESPONSE, ASSESSEE HAD CONTENDED THAT NOMENCLATU RE WAS ITA NO.483/MUM/14 A.Y. 08-09 [M/S. MONOPLAN SECURITIES PVT. LTD. VS. ACIT] PAGE 3 INCORRECT AND THAT THE SAID AMOUNT DENOTES THE WRIT E OFF OF AN OLD LOAN GIVEN TO ONE SHRI VIKAS SARAF AND IT BEING AN IRRECOVERABLE LOAN, THE AMOUNT WAS WRITTEN OFF. ASS ESSING OFFICER HELD THAT UNDER NO PROVISIONS OF THE ACT, T HE WRITE-OFF OF A LOAN CAN BE ALLOWED AS A DEDUCTIBLE EXPENSE AND F URTHER HELD THAT IT IS A CAPITAL LOSS. ASSESSING OFFICER ACCOR DINGLY ADDED BACK THE SAID SUM OF RS.2,00,000/- TO INCOME OF ASS ESSEE AND INITIATED PENALTY PROCEEDINGS U/S.271(L)(C) OF THE ACT THEREON. IN THE PENALTY ORDER, ASSESSING OFFICER HAS MENTION ED THAT ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME AN D HAS DELIBERATELY FILED INACCURATE PARTICULARS OF INCOME . ASSESSING OFFICER, THEREFORE, LEVIED THE PENALTY OF RS.61,800 /- BEING 100% OF TAX SOUGHT TO HAVE BEEN EVADED ON THE ADDITION O F RS.2,00,000/- ON ACCOUNT OF WRITE OFF OF A LOAN. 2.1 BEING AGGRIEVED BY THE ORDER ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A), WHICH WAS CONFIRM ED BY CIT(A). SAME HAS BEEN OPPOSED BEFORE US ON BEHALF O F ASSESSEE AND SUBMITTED THAT PENALTY IN QUESTION BE DELETED. ON OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF AUTHORITIES BELOW. 2.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD, WE FIND THAT STAND OF ASSESSEE HAS BEEN THAT THERE WAS NO CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME. ACCORDING TO HIM , PRACTICALLY IT WAS NOT A PROVISION FOR DOUBTFUL ADVANCES BUT IT WAS ACTUAL WRITTEN OFF OF LOANS GIVEN TO ONE MR. VIKAS SARAF A ND THAT WHILE ITA NO.483/MUM/14 A.Y. 08-09 [M/S. MONOPLAN SECURITIES PVT. LTD. VS. ACIT] PAGE 4 PREPARING THE BALANCE SHEET, IT WAS WRONGLY MENTION ED AS A 'PROVISION FOR DOUBTFUL ADVANCES' INSTEAD OF 'BALAN CE WRITTEN OFF'. IN FACT, IT WAS A VERY OLD LOAN GIVEN TO THE SAID PERSON AND THAT THE SAME WAS CLAIMED TO BE WRITTEN OFF AS UNRE COVERABLE. ASSESSEE SHOULD NOT BE PENALIZED FOR USING WRONG NOMENCLATURE WHILE CLAIMING EXPENSES IN QUESTION. MOREOVER, PENALTY PROCEEDINGS AND QUANTUM PROCEEDINGS ARE INDEPENDENT OF EACH OTHER. PENALTY IS NOT AUTOMATI C ON THE BASIS OF QUANTUM ADDITION. SO, TAKING ALL FACTS AN D CIRCUMSTANCES INTO CONSIDERATION, PENALTY IN QUESTI ON IS DIRECTED TO BE DELETED. 3. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF AUGUST, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 23/08/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&