ASSTT. CIT - LTU, MUMBAI V. RELIANCE INDUSTRIES LTD., MUMBAI

ITA 554/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2982 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-10-2015
• Assessment Year: 1999-2000
• Appeal Filed On: 23-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Bad and doubtful debts
• Section: 143(3); 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH , JUDICIAL MEMBER / I .T A NO. 554/MUM/2014 ( / ASSESSMENT YEAR : 1999 - 2000 THE ACIT, LARGE TAX PAYER UNIT, CENTRE - 1, 29 TH FLOOR, WORLD TRADE CENTRE, CUFFE PARADE, MUMBAI - 400 005 / VS. M/S. RELIANCE INDUSTRIES LTD. MAKER CHAMBER IV, 3 RD FLOOR, 222, NARIMAN POINT, MUMBAI - 400 021 ./ ./ PAN/GIR NO. : AAACR 5055K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI SANJEEV KASHYAP / RESPONDENT BY: SHRI VIJAY MEHTA / DATE OF HEARING : 27 .10. 2015 / DATE OF PRONOUNCEMENT : 27 .10 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 2 4 , MUMBAI D ATED 2 3 . 10 .201 3 PERTAINING TO ASSESSMENT YEAR 1999 - 2000. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS. 2,41,50,112/ - LEVIED U/S. 271(1)(C) OF THE ACT. ITA. NO. 554/M/2014 2 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE A SSESSMENT ORDER DATED 31.3.2005 , MADE U/S. 143(3) R.W. SECTION 147 OF THE ACT. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS AND WHILE GOING THROUGH THE COMPUTATION OF BOOK PROFIT U/S. 115JA OF THE ACT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS NOT ADDED THE PROVISION FOR DOUBTFUL DEBT AND ADVANCES THOUGH THE PROVISION FOR DOUBTFUL DEBTS AND ADVANCES WAS ADDED BACK IN THE COMPUTATION OF INCOME UNDER THE NORMAL PROVISIONS. THE SAID PROVISION OF DOUBTFUL DEBTS AND ADVANCES WAS ADDED B ACK IN THE COMPUTATION OF BOOK PROFIT AND SIMULTANEOUSLY PENAL PROCEEDINGS U/S. 271(1)(C) OF THE ACT WAS INITIATED. 4. WHEN THE MATTER TRAVELLED UPTO THE TRIBUNAL, THE TRIBUNAL IN ITA NOS. 1645 & 1646 /M/06 AND ITA NO. 2394/M/2007 OBSERVED THAT EVEN THOUG H THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS HCL COMNET SYSTEMS AND SERVICES LTD. , 305 ITR 409 (SC) IS IN FAVOUR OF THE ASSESSEE. SUBSEQUENTLY , SECTION 115JA HAS BEEN AMENDED BY FINANCE ACT NO. 2 OF 2009 WITH RETROSPECTIVE EFFECT FRO M 1.4.1998 AND BECAUSE OF THIS RETROSPECTIVE AMENDMENT, THE PROVISION FOR BAD AND DOUBTFUL DEBTS HAVE TO BE ADDED BACK IN COMPUTING THE BOOK PROFIT U/S. 115JA OF THE ACT. 4.1. THESE OBSERVATIONS OF THE TRIBUNAL IN QUANTUM PROCEEDINGS CLEARLY SHOW THAT ON THE DATE OF FILING OF THE RETURN, THE VIEW TAKEN BY THE ASSESSEE WAS WELL SUPPORTED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HCL COMNET SYSTEMS AND SERVICES LTD (SUPRA) AND IT IS ONLY BECAUSE OF THE RETROSPECTIVE AMENDMENT, THE PROVISIO NS FOR DOUBTFUL DEBTS AND ADVANCES WERE ADDED BACK FOR ITA. NO. 554/M/2014 3 COMPUTATION OF BOOK PROFIT U/S. 115JA OF THE ACT. THUS, IT IS CLEAR THAT THERE IS NO CONCEALMENT OF PARTICULARS OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, THIS IS NOT A FIT C ASE FOR THE LEVY OF PENALTY U/S. 271(1) (C) OF THE ACT. ACCORDINGLY, NO INTERFERENCE IS CALLED FOR. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 27 TH OCTOBER , 2015 . SD/ - SD/ - ( AMARJIT SINGH ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 27 TH OCTOBER , 2015 . . ./ RJ , SR. PS / 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./ASSTT. REGISTRAR) , / ITAT, MUMBAI