UNI DERITEND LTD, MUMBAI V. ASST CIT RG 1(3), MUMBAI

ITA 5379/MUM/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0821 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 28-07-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 27-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PAWAN KUMAR B
• Keywords: Bad and doubtful debts
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE MS.SUSHMA CHOWLA, JM & SHRI N K BILLAIYA, AM ITA NOS.5379 & 5380/MUM/2012 ASST.YEARS 2003-04 & 2004-05 M/S. UNI DERITEND LTD, LIBERTY BLDG., SIR VITHALDAS THACKERSEY MARG, MUMBAI 400 020 . APPELLANT PAN : AAACU0028K VS. ACIT RG 1(3), MUMBAI . RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI PAWAN KUMAR B DATE OF HEARING : 2 8 .0 7 .201 5 DATE OF PRONOUNCEMENT: 31 .0 7 .2015. O R D E R PER SUSHMA CHOWLA (JM) : BOTH THE APPEALS ARE FILED BY THE ASSESSEE AGAINST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS), BOTH DATED 25 .06.2012, RELATING TO ASSESSMENT YEARS 2003-04 & 2004-05 AGAINST PENALTY LEVIED U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. THE APPEAL WAS ADJOURNED FROM DATE TO DATE AND T HERE IS NON-COMPLIANCE BY THE ASSESSEE EXCEPT ON 24.06.2014. THE APPEAL WAS THEN FIXED FOR HEARING ON 06.05.2015 AND NONE APPEARED ON BEHALF OF THE ASSES SEE ON THE SAID DATE OF HEARING. THE NOTICE FOR HEARING WAS DIRECTED TO BE ISSUED BY RPAD FOR 28.07.2015. ON THE APPOINTED DATE OF HEARING NONE APPEARED ON B EHALF OF THE ASSESSEE NOR WAS ITA NO.5379 & 5380/MUM/2012 UNI DERITEND LTD 2 ANY APPLICATION MOVED FOR ADJOURNMENT. IN VIEW THE REOF, WE PROCEED TO DISPOSE OF THE APPEALS AFTER HEARING THE LEARNED DR FOR THE RE VENUE. 3. THE ASSESSEE IN BOTH THE APPEALS HAS RAISED COMM ON ISSUE AGAINST THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. SINCE THE IS SUE RAISED IS IDENTICAL, WE PROCEED TO DECIDE THE PRESENT APPEALS BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE, HOWEVER, REFERENCE IS BEING MADE TO TH E FACTS AND ISSUE IN ITA NO.5379/MUM/2012. 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -2, MUMBAI ERR ED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF RS.8,64, 784/- BEING 100% OF THE TAX SOUGHT TO BE EVADED ON AN ERRONEOUS ASSUMPTION THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME TO THE E XTENT OF RS.23,53,154/-\ 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN NOT PASSING SPEAKING ORDER IN RESPECT OF THE DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD., CIVIL APPEAL NO.2463 OF 2010 DATED 17.03.2010 REPORTED IN [2010] 3 TAXMANN.COM 47 (SC). 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT FULL DETAILS WERE FURNISHED IN RESP ECT OF FOLLOWING ITEMS. A. PROVISION FOR DOUBTFUL DEBTS FOR RS.8,97,677/- B. DUTY (ELECTRICITY DUTY) DISALLOWED U/S 43B FOR R S.10,80,654/- C. 10% OF SALES TAX SET OFF NOT OFFERED FOR TAX FOR RS.3,74,823/- AND THEREFORE THE QUESTION OF FURNISHING INACCURATE PARTICULARS AND THEREBY LEVYING PENALTY U/S. 271(1)(C) DOES NOT ARISE. 5. BRIEFLY IN THE FACTS OF THE PRESENT CASE, THE AS SESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF FERROUS AND NON FERROUS INVESTMENT CASTINGS, GENERATION OF WIND ENERGY. DURING THE C OURSE OF COMPLETION OF SCRUTINY ASSESSMENT U/S. 143(3) OF THE ACT, CERTAIN ADDITIONS WERE MADE. THE FIRST ADDITION WAS MADE ON ACCOUNT OF PROVISION FOR DOUBTFUL DEBTS. THE AO ITA NO.5379 & 5380/MUM/2012 UNI DERITEND LTD 3 DISALLOWED THE CLAIM OF THE ASSESSEE AS IT WAS ONLY A PROVISION THAT WAS MADE IN THE BOOKS OF ACCOUNT AND THE DEBTS HAD NOT ACTUALLY BECOME BAD. FURTHER, THE AO NOTED THAT THE ASSESSEE HAD REDUCED AMOUNT OF EN ERGY SALES BY ELECTRICITY DUTY WORTH RS.10,80,654/-. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE SAME SHOULD NOT BE DISALLOWED. IN RESPONSE, THE ASSESSE E DID NOT FURNISH ANY EVIDENCE OF PAYMENT OF ELECTRICITY DUTY. IN VIEW OF THE PROVISIONS OF SECTION 43B OF THE ACT, THE SAID AMOUNT WAS ADDED BACK TO THE I NCOME OF THE ASSESSEE. ANOTHER ADDITION MADE WAS ON ACCOUNT OF SALES TAX S ET OFF NOT OFFERED FOR TAX. THE ASSESSEE HAD OFFERED ONLY 90% OF THE SAID INCOM E AND HAD CLAIMED 10% OF THE SALES TAX SET OFF I.E. SUM OF RS.3,74,823/- AS DEDUCTION U/S. 43B OF THE ACT. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD WAS THAT THE SAID SUM WAS RETAINED AND WHEN THE SALES TAX ASSESSMENT ORDERS W OULD BE RECEIVED THE AMOUNT OF 10% WOULD BE OFFERED FOR TAX. THE AO REJE CTING THE CONDITION OF THE ASSESSEE DISALLOWED THE SAME. ALL THE SAID ADDITIO NS WERE CONFIRMED BY THE CIT(A) VIDE ORDER DATED 14.08.2008 FOR BOTH THE YEA RS UNDER CONSIDERATION. THE ASSESSEE HAD NOT FILED AN APPEAL BEFORE THE TRIBUNA L AGAINST THE ORDERS OF THE CIT(A) AS MENTIONED BY THE CIT(A) DECIDING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT UNDER PARA 2.1 AT PAGE 3 OF THE APPELLATE O RDER. CONSEQUENT THERETO, THE AO HELD THE ASSESSEE TO HAVE FURNISHED INACCURA TE PARTICULARS OF INCOME AND THUS CONCEALED THE INCOME TO THE EXTENT OF THE PROV ISIONS AND CONSEQUENTLY PENALTY U/S 271(1)(C) OF THE ACT AT RS.8,64,784/- W AS LEVIED. THE CIT(A) UPHELD THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT OBSER VING THAT THE ASSESSEE HAD TRIED TO REDUCE ITS TAXABLE INCOME BY SUBMITTING IN ACCURATE PARTICULARS OF INCOME. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE CIT(A). ITA NO.5379 & 5380/MUM/2012 UNI DERITEND LTD 4 6. ON PERUSAL OF THE RECORD, WE FIND THAT THE FIRST ADDITION MADE IN THE CASE OF THE ASSESSEE IS ON ACCOUNT OF PROVISION FOR DOUB TFUL DEBTS OF RS.8,97,677/-. THE SAID CLAIM WAS NOT ALLOWED IN THE HANDS OF THE ASSESSEE AS THE SAME IS AGAINST THE PROVISIONS OF THE ACT IN THE ABSENCE, T HE ASSESSEE HAVING WRITTEN OF THE SAID AMOUNT. FURTHER DISALLOWANCE WAS MADE U/S . 43B OF THE ACT ON ACCOUNT OF NON-PAYMENT OF ELECTRICITY DUTY AND ALSO ON ACCO UNT OF 10% OF SALES TAX SET OFF NOT OFFERED FOR TAX. THE EXPENDITURE BEING CLA IMED BY THE ASSESSEE IS AGAINST THE PROVISIONS OF THE ACT AND IS NOT ALLOWABLE IN T HE HANDS OF THE ASSESSEE. SECONDLY, THE SAID ACTION OF THE ASSESSEE ESTABLISH ES FURNISHING OF INACCURATE PARTICULARS OF INCOME IN CONTRAVENTION TO THE PROVI SIONS OF THE ACT AND JUSTIFIES THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. IN VIEW THEREOF, WE UPHOLD THE ACTION OF THE CIT(A) IN CONFIRMING THE PENALTY U/S. 271(1)(C) OF THE ACT. 7. THE FACTS AND ISSUE RAISED IN ITA NO. 5380/MUM/2 012 IS IDENTICAL TO THE FACTS IN ITA NO. 5379/MUM/2012 AND OUR DECISION IN ITA NO. 5379/MUM/2012 SHALL APPLY MUTATIS MUTANDIS TO ITA NO. 5380/MUM/20 12. 8. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF JULY, 2015. SD/- SD/- ( N K BILLAIYA ) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 31 ST JULY, 2015. SA ITA NO.5379 & 5380/MUM/2012 UNI DERITEND LTD 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT, MUMBAI. 4. CIT(A) - CONCERNED , MUMBAI 5. DR, ITAT, MUMBAI 6. GUARD FILE.