The DCIT, Circle1, Ahmedabad V. Arvind Products Ltd., Ahmedabad

ITA 587/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5795 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 26-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IRA R KAPOOR
• Keywords: Bad and doubtful debts; Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., , !' BEFORE SHRI R.P. TOLANI, VICE PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.587/AHD/2014 ( / ASSESSMENT YEAR : 2006-07) THE DCIT CIRCLE-1 AHMEDABAD / VS. M/S.ARVIND PRODUCTS LTD. ARVIND MILL PREMISES NARODA ROAD AHMEDABAD !% ./ ./ PAN/GIR NO. : AABCA 2391 L ( %( / APPELLANT ) .. ( )%( / RESPONDENT ) %(* / APPELLANT BY : MR. K. MADHUSUDAN, SR.DR )%(+* / RESPONDENT BY : MS. IRA R. KAPOOR, AR ,+ / DATE OF HEARING 29/05/2017 -./+ / DATE OF PRONOUNCEMENT 31/05/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE REVENUE HAS ASSAILED THE ORDER OF THE COMMISS IONER OF INCOME TAX(APPEALS)-VI, AHMEDABAD [CIT(A) IN SHORT] DATED 26/12/2013 FOR THE ASSESSMENT YEAR (AY) IN DELETING THE PENA LTY IMPOSED BY THE ASSESSING OFFICER (AO) UNDER S.271(1 )(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ). ITA NO.587/AHD/ 2014 DCIT VS. ARVIND PRODUCTS LTD. ASST.YEAR 2006-07 - 2 - 2. THE RELEVANT GROUNDS OF APPEAL RAISED BY THE RE VENUE READ AS UNDER:- (1) THE CIT(A) HAS ERRED IN LAW AND ON FACT IN DEL ETING THE PENALTY OF RS.12.32 LACS LEVIED U/S.271(1)(C) DESPITE THE FACT THAT THE CORRESPONDING QUANTUM ADDITIONS WERE ALREADY CONFIR MED BY THE CIT(A). (2) THE CIT(A) HAS NOT APPRECIATED THE FACT THAT T HE ASSESSEE HAD CLAIMED DEDUCTIONS IN THE RETURN OF INCOME IN CONTR AVENTION OF THE PROVISIONS OF THE I.T.ACT 1961 WHICH TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME LIABLE TO PENALTY U/S.271(1)(C) OF THE ACT. 3. IN THE COURSE OF HEARING IN THE CAPTIONED REV ENUES APPEAL, THE LD.AR FOR THE ASSESSEE ADVERTED OUR ATTENTION TO TH E FACT THAT THE RELIEF HAS BEEN GRANTED BY THE ITAT IN QUANTUM PROCEEDINGS IN ITA NO.1067/AHD/2011 ORDER DATED 19/02/2016 (COPY PLACE D IN FILE). IT WAS ACCORDINGLY SUBMITTED THAT THE EDIFICE FOR IMPOSITI ON OF PENALTY HAS CRUMBLED IN SO FAR AS GROUND NO.1 OF THE APPEAL IS CONCERNED. IT WAS THUS SUBMITTED THAT THE GRIEVANCE OF THE REVENUE IN PENALTY PROCEEDINGS AS PER GROUND NO.1 OF ITS APPEAL CEASES TO EXIST. IT WAS NEXT SUBMITTED BY THE LD.AR FOR THE ASSESSEE THAT ONCE GROUND NO.1 LOSES ITS STRENGTH DUE TO RELIEF IN THE QUANTUM PROCEEDINGS, THE REMA INING GROUND NO.2 OF REVENUES APPEAL STANDS COVERED BY CBDT CIRCULAR NO .21 OF 2015 DATED 10/12/2015. ACCORDINGLY, GROUND NO.2 OF THE REVENU ES APPEAL ALSO REQUIRES TO BE QUASHED IN LIMINE OWING TO LOW TAX EFFECT. ITA NO.587/AHD/ 2014 DCIT VS. ARVIND PRODUCTS LTD. ASST.YEAR 2006-07 - 3 - 4. THE LD.DR FOR THE REVENUE DID NOT BRING OUT ANYT HING CONTRARY TO THE SUBMISSIONS OF THE ASSESSEE. 5. WE FIND OURSELVES IN AGREEMENT WITH CONTENTIONS ON BEHALF OF THE ASSESSEE. THE CAUSE OF ACTION AS PER GROUND NO.1 IS DISALLOWANCE OF BAD DEBTS AND CONSEQUENT PENALTY UNDER S.271(1)(C) THER EON. THE PREMISE FOR IMPOSITION OF PENALTY ON DISALLOWANCE OF BAD DEBTS AMOUNTING TO RS.34,27,583/- HAS CEASED TO EXIST OWING TO RELIEF GRANTED BY THE ITAT IN THE QUANTUM PROCEEDINGS. BESIDES, PENALTY UNDER S .271(1)(C) OF THE ACT ON DISALLOWANCE OF PRIOR PERIOD EXPENSES RS.2,35,19 4/- AS PER GROUND NO.2 OF REVENUES APPEAL STANDS COVERED BY THE CBDT CIRCULAR NO.21 OF 2015 DATED 10/12/2015 AS THE TAX EFFECT THEREON IS LESS THAN RS.10 LAKHS. IN THIS CONTEXT, WE ALSO NOTICE THAT THE ORDER OF T HE ITAT IN QUANTUM PROCEEDINGS WAS PASSED ON 19/02/2016 WHICH IS SUBSE QUENT TO THE APPEAL FILED BY THE REVENUE DATED 19/02/2014. THEREFORE, THE AO WAS OSTENSIBLY NOT PRIVY TO THE ORDER OF THE ITAT GRANT ING RELIEF AS REGARDS GROUND NO.1. AS A COROLLARY, ON EXCLUSION OF GROU ND NO.1, GROUND NO.2 FALLS WITHIN THE RELIEF CIRCULAR OF CBDT NO.21 OF 2015 DATED 10/12/2015 AS NOTED ABOVE. HENCE, WE DO NOT FIND A NY MERITS IN THE APPEAL OF THE REVENUE. ITA NO.587/AHD/ 2014 DCIT VS. ARVIND PRODUCTS LTD. ASST.YEAR 2006-07 - 4 - 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 31 /05/2017 SD/- SD/- ( ..) ( ) ! ( R.P. TOLANI ) ( PR ADIP KUMAR KEDIA ) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD; DATED 31/ 05 /2017 3..,.4../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )%( / THE RESPONDENT. 3. 567 8 / CONCERNED CIT 4. 8 ( ) / THE CIT(A)-VI, AHMEDABAD 5. 9:;4467 , 67/ , 5 / DR, ITAT, AHMEDABAD 6. ; , / GUARD FILE. / BY ORDER, )94 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 29.5.17 (DICTATION-PAD 7- PA GES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.5.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.31.5.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.5.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER