MANOJ KUMAR JOHARI, Sikar V. ACIT, Sikar

ITA 505/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5416 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 11-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Assessee Lawyers: G G MUNDRA
• Keywords: Bad and doubtful debts; Tax effect
• Section: 40A(3); 80IB; 147; 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 505/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2004-05 MANOJ KUMAR JOHARI, PROP.- M/S THE ART PLACE, SIKAR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ADWPJ 8870 A VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI G.G. MUNDRA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/01/2016 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 29/02/2016 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27/05/2014 PASSED BY THE LEARNED CIT(A)-III, JAIPUR FOR A.Y. 2004-05. THE SOLE GROUND OF APPEAL IS AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) IS WRONG, UNJUST AND HAS ERRED IN LAW IN CONFIRMING PENALTY TO THE EXTENT OF RS. 3,89,550/- IMPOSED ITA 505/JP/2014_ MANOJ KR. JOHARI VS. ACIT 2 BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE I.T. A CT, 1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ELIGIBLE TO DEDUCTION U/S 80IB(5) OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT), RETURN OF INCOME AT NIL WAS FILED AFTER MAKING 80IB(5) CLAIM, WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER THE ASSESSING OFFI CER ISSUED NOTICE U/S 148 AND REOPENED THE ASSESSMENT ON THE REASONS THAT REQUISITE DETAILS FOR ALLOWBILITY OF CLAIM U/S 80IB WERE NOT FURNISHED. ASSESSMENT IN QUESTION WAS FRAMED U/S 147 READ WITH SECTION 144 MAK ING THE ADDITIONS OF RS. 1,01,98,950/-, WHICH WAS CHALLENGED BY THE ASS ESSEE BEFORE THE LD CIT(A). SUBSTANTIAL RELIEF WAS GRANTED TO THE ASSESSE E. THE MATTER WAS FURTHER CARRIED BEFORE HONBLE ITAT, WHO WAS CONFIRME D THE ORDER OF THE LD CIT(A). AFTER GIVING EFFECT TO THE ITATS ORDER, T HE BALANCE DISALLOWANCES REMAINED AS UNDER:- 80IB DISALLOWANCE (5%) 3,49,045 40A(3) DISALLOWANCE 98,029 ADDITION FOR PROVISION FOR DOUBTFUL DEBTS 11,60,176 INTEREST RECEIVED FROM SBBJ-INCLUDED 97,300 17,04,550 LD ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS. THE ASSESSEE FILED REPLY DATED 20/10/2011. THE LD WAS NOT WAS SAT ISFIED WITH THE EXPLANATION AND IMPOSED IMPUGNED PENALTY. ITA 505/JP/2014_ MANOJ KR. JOHARI VS. ACIT 3 3. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WH ERE THE PENALTY IMPOSED WAS REDUCED, HOWEVER, CONFIRMED QUA THE ABOVE DISALLOWANCES. AGGRIEVED THE ASSESSEE IS BEFORE US. 4. I HAVE HEARD BOTH THE PARTIES ON THE ISSUE AND I AM OF THE VIEW THAT QUA ITEM NO.S 1, 2 AND 4 ABOVE THIS IS NOT A F IT CASE FOR IMPOSITION OF PENALTY INASMUCH AS ALL THE RELEVANT PARTICULARS WER E PROVIDED ALONG WITH THE RETURN OF INCOME. THEREFORE, RELYING ON THE DECI SION OF THE HON'BLE SUPREME COURT IN THE RELIANCE PETRO PRODUCTS 322 IT R 158, PENALTY IN THIS BEHALF IS DELETED. 5. APROPOS ITEM NO. 3 I.E. ADDITION FOR PROVISIONS FOR DOUBTFUL DEBTS, LD COUNSEL FOR THE ASSESSEE CONTENDS THAT THE IMPUGNED BAD DEBTS HAVE BEEN WRITTEN OF QUA THE BUSINESS ELIGIBLE FOR DEDUCT ION U/S 80IB. THE DISALLOWANCE OF BAD DEBTS WILL ONLY INCREASE THE ELIG IBLE EXEMPT PROFITS COVERED U/S 80IB OF THE ACT. SINCE THERE WAS NO CONS EQUENCE ON THE ASSESSEES TAXABLE INCOME, THEREFORE, THE ADDITION WAS NOT AGITATED BY THE ASSESSEE IN APPEAL. ALL THE RELEVANT PARTICULAR S ABOUT BAD DEBTS WERE ALSO FILED IN THE AUDITORS STATEMENTS. THEREFORE, M ERELY BECAUSE THE ASSESSEE DID NOT CHALLENGE THE ADDITION BECAUSE OF NO TAX EFFECT, PENALTY CANNOT BE IMPOSED ON SUCH AN UNJUSTIFIED GROUND. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LD CIT(A). ITA 505/JP/2014_ MANOJ KR. JOHARI VS. ACIT 4 6. I HAVE HEARD BOTH THE PARTIES. I FIND MERIT IN T HE CONTENTION OF THE LD COUNSEL FOR THE ASSESSEE. IT HAS NOT BEEN DISPUT ED THAT THE BAD DEBTS WERE IN RESPECT OF ELIGIBLE BUSINESS U/S 80IB. THE DI SALLOWANCE OF BAD DEBT WILL AT THE MOST INCREASE THE ELIGIBLE INCOME, WHICH IS OTHERWISE EXEMPT. MERELY BECAUSE THE ASSESSEE HAS ACCEPTED TH E ADDITION BECAUSE OF NO CONSEQUENT TAX EFFECT, IT CANNOT BE MADE A BA SIS FOR IMPOSITION OF PENALTY. BESIDES THE RELEVANT PARTICULARS IN THIS B EHALF ALSO WERE DISCLOSED IN THE RETURN OF INCOME. THEREFORE, RELIANCE ON THE DECISION OF RELIANCE PETRO PRODUCTS IS ALSO APPLICABLE TO THIS ISSUE AS WELL. IN VIEW THEREOF, THE PENALTY QUA THIS ADDITION IS ALSO DELETED. 7. IN THE RESULT, THE PENALTY IMPOSED AND CONFIRMED IS HEREBY DELETED AND THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/02/2016. SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 29 TH FEBRUARY, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI MANOJ KUMAR JOHARI, SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CIRCLE, SIKAR. 3. VK;DJ VK;QDR @ CIT ITA 505/JP/2014_ MANOJ KR. JOHARI VS. ACIT 5 4. VK;DJ VK;QDR @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 505/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR