DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4(20, MUMBAI V. M/S. SHIVALIK VENTRURES PRIVATE LTD., MUMBAI

ITA 5372/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3475 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 16-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPKANT PRASAD
• Assessee Lawyers: APEKSHA GALA
• Keywords: Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5372/MUM/2019 ASSESSMENT YEAR: 2012-13 DEPUTY COMMISSIONER OF INCOME TAX-CENTRAL CIRCLE- 4(2), CENTRAL RANGE-4, PR. CIT (C)-2, ROOM NO. 1918, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021. VS. M/S SHIVALIK VENTURES PRIVATE LIMITED, PLOT NO. 746, STANEY FERNANDES WASI, DS BABREKAR MARG, DADAR (W), MUMBAI-400028. PAN NO. AALCS 7683 R APPELLANT RESPONDENT REVENUE BY : MR. DEEPKANT PRASAD, DR ASSESSEE BY : MS. APEKSHA GALA, AR DATE OF HEARING : 22/02/2021 DATE OF PRONOUNCEMENT : 02/03/2021 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2012-13. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-52, MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT 1961, ( THE ACT). ITA NO. 5372/M/2019 M/S SHIVALIK VENTURES 2 2. THE GROUND OF APPEAL FILED BY THE REVENUE READS AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) IS JUSTIFIED IN DELETING THE PENALTY U/S 271(1)(C) OF THE IT ACT OF RS.5,51,56,500/- WHICH WAS LEVIED BY THE AO ON BASIS OF DISALLOWANCE OF RS .15,00,00,000/- MADE BY THE AO ON ACCOUNT OF REJECTING THE CLAIM OF THE ASSESSEE A S LOSS TOWARDS THE POWAI PROJECT WHICH WAS ALSO LATER TERMED AS THANE PROJECT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2012-13 ON 30.0 3.2013 DECLARING NIL INCOME. THE ASSESSMENT WAS COMPLETED U/S 143(3) BY THE ASSESSING OFFICER (AO) VIDE ORDER DATED 30.03.2014, AFTER MAKING VARIOUS ADDIT IONS AND DISALLOWANCES, INCLUDING DISALLOWANCE OF CLAIM OF W RITE OFF OF LOSS OF RS.19 CRORES RELATING TO A PROJECT SITUATED AT FORT AND D ISALLOWANCE OF CLAIM OF WRITE OFF OF LOSS OF RS.15 CRORES RELATING TO A PROJECT S ITUATED AT POWAI. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL B EFORE THE LD. CIT(A), WHO DELETED THE DISALLOWANCE OF RS.19 CRORES RELATING T O FORT PROJECT BUT SUSTAINED THE DISALLOWANCE OF WRITE OFF OF RS.15 CRORES RELAT ING TO POWAI PROJECT. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSES SEE FILED AN APPEAL BEFORE THE TRIBUNAL. THE AO, IN THE MEANWHILE LEVIED A PENALTY OF RS.5,51,56,500/- VIDE ORDER DATED 30.03.2017 TREATING RS.15 CRORES AS CON CEALED INCOME. 4. IN APPEAL FILED BY THE ASSESSEE AGAINST THE PENA LTY ORDER, THE LD. CIT(A) ALLOWED IT ON THE GROUND THAT THE TRIBUNAL VIDE ORDER DATED 19.09.2019 HAS DELETED THE SAID QUANTUM ADDITION OF RS.15 CRORE RE LATED TO POWAI PROJECT. ITA NO. 5372/M/2019 M/S SHIVALIK VENTURES 3 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE R ELIES ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISIONS ARE GIVEN BELOW. THE ONLY ISSUE IN THIS APPEAL IS THE LEVY OF PENAL TY OF RS.5,51,56,500/- U/S 271(1)(C) BY THE AO ON THE DISALLOWANCE OF LOSS OF RS.15 CRORES RELATED TO POWAI PROJECT, WHICH WAS UPHELD BY THE LD. CIT(A). WE FIND THAT VIDE ORDER DATED 19.09.2018, THE TRIBUNAL HAS DELETED THE ABOV E QUANTUM ADDITION OF RS.15 CRORES RELATED TO POWAI PROJECT AND DECIDED T HE APPEAL IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IS REPRODUCED HEREUNDER: 17. UNDER THE SET OF FACTS, WE NOTICE THAT THE BOA RD OF DIRECTORS HAVE DECIDED TO WRITE OFF THE ADVANCE OF RS. 15 CRS. GIVEN TO M/S. SAI LEE GROUP. AS NOTICED EARLIER, THE ASSESSEE HAS TAKEN THIS DECISION AS A PRUDENT B USINESSMAN IN THE FACTS AND CIRCUMSTANCES SURROUNDING THE CASE AND WE ARE OF TH E VIEW THAT THE TAX AUTHORITIES ARE NOT ENTITLED TO QUESTION THE WISDOM OF THE ASSE SSEE IN THIS REGARD. ACCORDINGLY, IN OUR VIEW, THE CLAIM OF THE ASSESSEE COMPANY IN W RITING OFF RS. 15 CRS. CANNOT BE CONSIDERED TO BE PREMATURE ONE AND ACCORDINGLY, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF BUSINESS LOSS. 18. IN OUR VIEW, THE RATIO OF VARIOUS DECISION RELI ED BY LD. DR ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. ................ 19. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE OF THE OPINION THAT THE VIEW TAKEN BY THE TAX AUTHORITIES IS NOT JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD. ITA NO. 5372/M/2019 M/S SHIVALIK VENTURES 4 CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW THE CLAIM OF RS. 15.00 CRS. CLAIMED BY THE ASSESSEE AS BUSINESS LOSS. IN THE RESULT, APPEA L FILED BY ASSESSEE IS ALLOWED. 6.1 SINCE THE QUANTUM ADDITION HAS BEEN DELETED BY THE TRIBUNAL, THE CONSEQUENT PENALTY LEVIED BY THE AO U/S 271(1)(C) D OES NOT SURVIVE. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/03/2021. SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 02/03/2021 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT, MUMBAI