ACIT CIRCLE 2, TIRUPPUR V. M/S R EASWARAN HUF, TIRUPUR

ITA 591/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9735 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 19-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDA KUMAR
• Assessee Lawyers: LAKSHMI
• Keywords: Bad and doubtful debts
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.591/CHNY/2018 ( )( / ASSESSMENT YEAR : 2011-12 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2, TIRUPUR. V. M/S R. EASWARAN HUF, NO.2/1004, KURUMANKUTTAI THOTTAM, PALAVANJIPALAYAM ROAD, VEERAPANDI POST, TIRUPUR 641 605. PAN : AACHR 0736 G (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI V. NANDAKUMAR, JCIT -.+, / 0 / RESPONDENT BY : MS. LAKSHMI, CA 1 / 2% / DATE OF HEARING : 28.11.2018 3') / 2% / DATE OF PRONOUNCEMENT : 03.12.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -3, COIMBA TORE, DATED 08.12.2017, CONFIRMING THE PENALTY LEVIED BY THE AS SESSING OFFICER 2 I.T.A. NO.591/CHNY/18 UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR THE ASSESSMENT YEAR 2011-12. 2. SHRI V. NANDAKUMAR, THE LD. DEPARTMENTAL REPRESE NTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED BAD DEBTS. HOW EVER, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE ON THE GROUND THAT THE DEBTS WERE NOT WRITTEN OFF. ACCORD ING TO THE LD. D.R., WHILE REFERRING TO THE ORDER OF THIS TRIBUNAL IN QUANTUM APPEAL, THE ASSESSING OFFICER FOUND THAT THE BAD DEBTS WERE NOT GENUINELY WRITTEN OFF. HENCE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT T O THE EXTENT OF 61,69,074/-. REFERRING TO THE ORDER OF THIS TRIBUN AL IN I.T.A. NO.168/MDS/2016 DATED 21.10.2016, THE LD. D.R. SUBM ITTED THAT THIS TRIBUNAL CONFIRMED THE ADDITION MADE BY THE AS SESSING OFFICER WITH REGARD TO THE CLAIM OF BAD DEBTS. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN DELE TING THE PENALTY. 3. ON THE CONTRARY, MS. LAKSHMI, THE LD. REPRESENTA TIVE FOR THE ASSESSEE, SUBMITTED THAT OUT OF 1,99,64,641/-, WHICH WAS CLAIMED AS BAD DEBTS, THIS TRIBUNAL FOUND THAT BUT FOR A SU M OF 1,18,08,800/-, THERE WAS NO ACTUAL WRITTEN OFF. AC CORDING TO THE LD. REPRESENTATIVE, THIS TRIBUNAL OBSERVED THAT THERE W AS AN ATTEMPT BY 3 I.T.A. NO.591/CHNY/18 THE ASSESSEE TO WRITE OFF THE ACCOUNT. PLACING REL IANCE ON THE JUDGMENT OF APEX COURT IN CIT VS. RELIANCE PETROPRO DUCTS (P) LTD. (2010) 322 ITR 158, THE LD. REPRESENTATIVE SUBMITTE D THAT A MERE CLAIM OF BAD DEBT IN THE RETURN OF INCOME DOES NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME OR CONC EALING ANY PART OF THE ASSESSEES INCOME. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) HAS RIGHTLY DELETE D THE PENALTY. ON A QUERY FROM THE BENCH, THE LD. REPRESENTATIVE VERY FAIRLY SUBMITTED THAT AGAINST THE ORDER OF THIS TRIBUNAL, AN APPEAL WAS ALREADY FILED BEFORE THE HIGH COURT AND THE SAME WAS ADMITTED AND PENDING FOR ADJUDICATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS FURNISHED ALL THE PAR TICULARS OF ITS INCOME AND CLAIMED A PART OF AMOUNT AS BAD DEBTS. THE REVENUE DOUBTS THE CLAIM OF THE ASSESSEE ON THE GROUND THAT IT WAS NOT WRITTEN OFF. IT IS ALSO NOT IN DISPUTE THAT THIS T RIBUNAL FOUND THAT THE BAD DEBTS WERE NOT WRITTEN OFF IN THE BOOKS. THE Q UESTION ARISES FOR CONSIDERATION IS WHEN THE ASSESSEE HAS FURNISHED EN TIRE DETAILS OF INCOME AND THE DETAILS OF DEBTS AND CLAIMS A PART O F DEBTS AS BAD 4 I.T.A. NO.591/CHNY/18 DEBTS, WHETHER IT WOULD AMOUNT TO FURNISHING INACCU RATE PARTICULARS OF INCOME OR CONCEALING ANY PART OF INCOME? THE AP EX COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) FOU ND THAT A MERE CLAIM IN THE RETURN OF INCOME AFTER FURNISHING ENTI RE DETAILS, DOES NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCO ME OR CONCEALING ANY PART OF INCOME. IN VIEW OF THIS JUDGMENT OF AP EX COURT IN RELIANCE PETROPRODUCTS (P) LTD. (SUPRA), THIS TRIBU NAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTL Y DELETED THE PENALTY. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDING LY THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 3 RD DECEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 3 RD DECEMBER, 2018. KRI. 5 I.T.A. NO.591/CHNY/18 / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-3, COIMBATORE 4. PRINCIPAL CIT-3, COIMBATORE 5. 7: -2 /DR 6. ;( < /GF.