B. MELARAM & SONS, MUMBAI V. ADDL CIT RG 14(3), MUMBAI

ITA 5143/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3989 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 11-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DHIRENDRA M SHAH
• Keywords: Wrong claim; Bad and doubtful debts
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.5143/MUM/2014 ASSESSMENT YEAR:2008-09 M/S B. MELARAM & SONS, C/O- MANGALDAS D. SHAH & COMPANY, 506, LOTUS HOUSE, 5 TH FLOOR, 33-A, NEW MARINES LINES, MUMBAI-400020 ACIT, RANGE-14(3), 6 TH FLOOR, EARNEST HOUSE, MUMBAI-400021 ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO. AAAFB2676H % #& ' ' ( / DATE OF HEARING : 25/02/2016 ' ' ( / DATE OF ORDER: 25/02/2016 ! ' / ASSESSEE BY SHRI DHIRENDRA M. SHAH # / REVENUE BY SHRI RANDHIR GUPTA-DR ITA NO.5143/MUM/2014 M/S B. MELARAM & SONS 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 17/06/2014, OF THE LD. FIRST APPELLATE AUTHORITY, M UMBAI, CONFIRMING THE PENALTY OF RS.17,496/- IMPOSED U/S 2 71(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI DHIRENDRA M. SHAH, CONTENDED THAT THE DISALLOW ANCE WAS MADE PURELY ON TECHNICAL GROUND AND EVEN IF A W RONG CLAIM IS MADE WITH RESPECT TO BAD DEBT STILL NO PEN ALTY IS LEVIABLE. ALTERNATIVELY, IT WAS CONTENDED THAT THE PARTIES WERE ABSCONDING, THEREFORE, AT BEST, IT SHOULD HAVE BEEN ALLOWED AS BUSINESS LOSS. ON THE OTHER HAND, THE LD. DR, SHRI RANDHIR GUPTA, DEFENDED IMPOSITION AS WELL AS CONFIRMATION OF PENALTY. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE CLAIMED DEDUCTION AS BAD DEBT S U/S 36(2) OF THE ACT, WHICH WAS DISALLOWED BY THE ASSES SING OFFICER ON THE GROUND THAT THE CLAIM HAS NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE. PENALTY U /S 271(1)(C) AMOUNTING TO RS.17,496/- WAS LEVIED. ON APPEAL, BE FORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), IT WAS AF FIRMED. THE ASSESSEE IS IN FURTHER APPEAL, BEFORE THIS TRIB UNAL. IN THE PRESENT APPEAL, THE ASSESSEE DECLARED TOTAL INCOME OF ITA NO.5143/MUM/2014 M/S B. MELARAM & SONS 3 RS.1,36,56,264/- ON 26/09/2008 AND THE ASSESSMENT W AS COMPLETED ON 22/12/2010 U/S 143(3) OF THE ACT, DETE RMINING THE INCOME AT RS.1,38,11,260/-. WHILE DOING SO, THE LD. ASSESSING OFFICER MADE DISALLOWANCE OF BAD DEBTS OF RS.52,621/- WITH RESPECT TO M/S ARABIAN PIONEER (RS .4,000/- ) AND M/S STEELMETS LTD. (RS.52,621/-). THE ASSESSI NG OFFICER OBSERVED THAT THE BALANCES, SHOWN BY THE ASSESSEE, DO NOT QUALIFY TO BE TREATED AS BAD DEBT, HENCE, HE DISALL OWED THE SAME. IT IS NOT THE CASE THAT THE ASSESSEE HIDES SO METHING. EVEN IF, IT IS PRESUMED THAT A WRONG CLAIM WAS MADE , STILL, IT CANNOT BE CONCLUDED THAT THE ASSESSEE FURNISHED INA CCURATE PARTICULARS OR CONCEALED ITS INCOME. THE DECISION F ROM HONBLE APEX COURT IN RELIANCE PETRO PRODUCTS LTD. (322 ITR 158) (SC), HOLDING THAT MERE MAKING A WRONG CLAIM I TSELF DOES NOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS OR CONCEALING OF INCOME, CLEARLY COMES TO THE RESCUE O F THE ASSESSEE. RESPECTFULLY, FOLLOWING THE SAME, THE PEN ALTY OF RS.17,496/- IMPOSED U/S 271(1)(C) OF THE ACT, IS DI RECTED TO BE DELETED, THUS, THE APPEAL OF THE ASSESSEE IS ALL OWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 25/02/2016. SD/- SD/- ( SANJAY ARORA ) (JOGINDER SINGH) ! ' / ACCOUNTANT MEMBER # ' /JUDICIAL MEMBER % & MUMBAI; ) DATED : 25/02/2016 ITA NO.5143/MUM/2014 M/S B. MELARAM & SONS 4 F{X~{T? P.S/. . . $#%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 % 1' ( + ) / THE CIT, MUMBAI. 4. 0 0 % 1' / CIT(A)- , MUMBAI 5. 3#4 .' , 0 +( 5 , % & / DR, ITAT, MUMBAI 6. 7& / GUARD FILE. / BY ORDER, /3+' .' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI