MOHAMEDI MECHANICS WORKS, MUMBAI V. ITO 17(3)(3), MUMBAI

ITA 5420/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5836 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-03-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 28-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DEEPAK R PARIKH
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B , MUMBAI BEFORE SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 5420/M/2012 ASSESSMENT YEAR: 2005 - 06 M/S. MOHMEDI MECHANICS WORKS, 186, RIPON ROAD, MADANPURA POST OFFICE BUILDING, MUMBAI 400 008 PAN: AAGF1959E VS. INCOME TAX OFFICER, WARD 17(3)(3), MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DEEPAK R. PARIKH REVENUE BY : SHRI MALLIKARJUN UTTURE, D .R. DATE OF HEARING : 25.03 .201 4 DATE OF PRONOUNCEMENT : 28.03.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] DATED 26.06.2012 CONFIRMING THE PENALTY OF RS.35,243/ - UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER (HE REINAFTER REFERRED TO AS THE AO) MADE AN ADDITION OF RS.1,95, 9 32/ - IN RESPECT OF CLAIM OF WRITTEN OFF BAD DEBTS. THE ASSESSEE DID NOT CONTEST THE SAID ADDITION. HENCE, THE AO ALSO LEVIED PENALTY UNDER SECTION ITA NO. 5420/M/2012 M/S. MOHMEDI MECHANICS WORKS 2 271(1)(C) OF THE ACT AMOUNTING TO RS.35,243/ - @ 100% OF THE TAX AMOUNT SOUGHT TO BE EVADED. THE LD. CIT(A) CONFIRMED THE SAID PENALTY. 3. BEFORE US THE LD. A.R. OF THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE HAD ALREADY CLOSED ITS BUSINESS AND NO BUSINESS ACTIVITY WAS CARRIED OUT BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR. THE AMOUNT IN QUESTION WAS SHOWN IN THE ACCOUNTS OF THE ASSESSEE AS BAD DEBTS WRITTEN OFF. HOWEVER, WHEN CALLED FOR BY THE AO TO FURNISH THE NECESSARY DETAILS AND EXPLANATIONS , DUE TO SMALLNESS OF THE AMOUNT INVOLVED AND ALSO IN VIEW OF THE FACT THAT THE ASSESSEE HAD ALREADY CLOSED ITS BUSINESS , IT DID NOT PROTEST AGAINST THE SAID ADDITION. IT HAS BEEN FURTHER SUBMITTED THAT MERELY BECAUSE THE ASSESSEE DID NOT CONTEST THE SAID ADDITION, IT DOES NOT AMOUNT TO FURNISH I NG OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. ON THE OTHER HAND, THE LD. D.R. HAS RELIED UPON THE FINDINGS OF THE LOWER AUTHORITIES. 4. WE HAVE CONSIDERED THE RESPECTIVE SUBMISSIONS OF THE PARTIES. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE ASSESSEE DID NOT CARRY OUT ANY BUSINESS ACTIVITY DURING THE RELEVANT FINANCIAL YEAR. CERTAIN DISALLOWANCES WERE MADE BY THE AO , WHICH WERE NOT CONTESTED BY THE ASSESSEE FOR SMALLNESS OF THE AMOUNT AS WELL AS ALSO IN VIEW OF THE FACT THAT THE ASSESSEE HAD CLOSED ITS BUSINESS. THOUGH THE ASSESSEE DID NOT CONTEST OR COULD NOT FURNISH THE NECESSARY DETAILS RELATING TO BAD DEBTS WRITTEN OFF , H OWEVER, THE FACTS OF THE CASE REVEAL THAT IT WAS NOT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, THE PENALTY OF RS.35,243/ - LEVIED BY THE LOWER AUTHORITIES IS HEREBY ORDERED TO BE DELETED. ITA NO. 5420/M/2012 M/S. MOHMEDI MECHANICS WORKS 3 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.03.2014 . SD/ - SD/ - ( N. K. BILLAIYA ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED : 28.03. 201 4 . * KISHORE COPY TO: THE APPELLANT TH E RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.