DCIT (OSD) 2(3), MUMBAI V. NRC LTD, MUMBAI

ITA 7370/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78839 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 13-12-2013
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K ** CH U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI JH TH + ,L + IUUW] YS[KK LNL; ,OA JH VFER KQDYK] U;KF;D LNL; DS LE{KA BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER VK;DJ VIHY LA[;K@ ITA NO 7370 /MUM/201 3 ( FU/KKZJ.K OKZ / ASSESSMENT YEAR: - 2005 - 06) DEPUTY COMMISSIONER OF INCOME TAX OFFICE OF THE DCIT(OSD) - 2(3) ROOM NO. 552, AAYKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS.` M/S NRC LTD., EWART HOUSE, 02 ND FLOOR, H.M. STREET, FORT, MUMBAI 400 023. LFKK;H YS[KK LA[;K@TH VKB VKJ LA[;K@ PAN/GIR NO. AAACN1616J APPELLANT RESPONDENT ORDER PER G.S. PANNU, AM THE CAPTIONED APPEAL PREFERRED BY THE R EVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS) [ HEREINAFTER REFERRED TO AS THE CIT(A) ] DATED 17.09.2013 , WHICH IN - TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961( JKTLO FD VKSJ LS @ REVENUE BY SHRI YOGESH KAMAT FU/KKZFJFR FD VKSJ LS @ ASSESSEE BY SHRI M.C. NANIWADEKAR LQUOKBZ FD RKJH[K @ DATE OF HEARING 14.05.2015 ?KKSK.KK FD RKJH[K@ DATE OF PRONOUNCEMENT 14.05.2015 . 2 ITA NO 7370/MUM/2013 ASSESSMENT YEAR: - 2005 - 06 PAGE 2 OF 4 HEREINAFTER REFERRED TO AS THE ACT ) DATED 20.12.2007 PERTAINING TO ASSESSMENT YEAR 2005 - 06. 2. IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE DECISION OF CIT(A) WHEREBY THE PENALTY U/S 271(10(C) OF THE ACT AMOUNTING TO RS. 3,39,76,175/ - HAS BEEN DELETED O N THE GROUND THAT CORRESPONDING ADDITION MADE IN THE QUANTUM ASSESSMENT PROCEEDINGS HAS SINCE BEEN DELETED BY THE TRIBUNAL. 3. AT THE TIME OF HEARING, IT WAS A COMMON GROUND BETWEEN THE PARTIES THAT SO FAR AS THE STATUS OF THE ADDITION MADE IN THE QUANTUM ASSESSMENT PROCEEDINGS IS CONCERNED, THE SAME STANDS DELETED BY THE TRIBUNAL VIDE ORDER IN ITA NO. 3811/MUM/2010 DATED 10.10.2012 AND, THEREFORE, THE V ERY BASIS FOR IMPOSISITON OF PENALTY U/S 271(1)(C) DOES NOT SURVIVE. 4. PERTINENTLY, THE APPELLANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956, AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF MANMADE FIBERS, VISCOSE FILAMENT YARN, GENERATION OF POWER ETC. IN THE ASSESSMENT PROCEEDINGS FINALIZED U/S 143(3) OF THE ACT, DATED 201. 12.2007, ASSESSEES CLAIM FOR WRITE OFF OF BAD DEBTS U/S 36(1)(VII) OF THE ACT AMOUNTING TO RS. 11,32,53,915/ - WAS DISALLOWED. SUBSEQUENTLY, THE ASSESSING OFFICER HELD THE ASSESSEE GUILTY OF CONCEALMENT OF INCOME QUA THE AFORESAID ADDITION WITHIN THE MEANI NG OF SECTION 271(1)(C) OF THE ACT, AND ACCORDINGLY, A PENALTY OF RS. 3,39,76,175 WAS LEVIED VIDE AN ORDER DATED 29.03.2012. SUCH PENALTY HAS BEEN SET - ASIDE BY THE CIT(A) ON THE GROUND THAT THE TRIBUNAL IN ITS ORDER DATED 10.10.2012(SUPRA) HAS DELETED THE ADDITION 3 ITA NO 7370/MUM/2013 ASSESSMENT YEAR: - 2005 - 06 PAGE 3 OF 4 AND, THEREFORE, THE PENALTY U/S 271(1)(C) OF THE ACT , DOES NOT SURVIVE. APART THEREFROM THE CIT(A) HAS NOTED THA T THE ISSUE ON WHICH THE PENALTY WAS IMPOSED BY THE ASSESSING OFFICER IS CLEARLY DEBATABLE AND ON THAT GROUND ALSO PENALTY DOES NOT STAND. 5. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE OF THE ASSESSEE POINTED OUT THAT ORDER OF THE TRIBUNAL DATED 10.10.2012(SUPRA) DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS. 11,32,53,915/ - U/S 36(1)(VII ) OF THE ACT, HAS BEEN AFFIRMED BY THE HONBLE BOMBAY HIGH COURT VIDE ITS ORDER IN INCOME TAX APPEAL NO. 1116 OF 2013 DATED 17.03.2015. IN VIEW OF THE AFORESAID FACTUAL MATRIX, WE CONFIRM THE ULTIMATE CONCLUSION OF THE CIT(A) IN DELETING THE PENALTY AS THE DISALLOWANCE OF BAD DE BTS MADE IN THE QUANTUM ASSESSMENT PROCEEDINGS STAND S DELETED AND ACCORDINGLY THE VERY BASIS FOR THE LEVY OF PENALTY DOES NOT SURVIVE. 6 . RESULTANTLY, THE APPEAL OF THE REVENUE IS DISMISSED AS ANNOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTI ES AT THE CONCLUSION OF THE HEARING ON 1 4 .5.2015 . SD/ - SD/ - (AMIT SHUKLA) (G.S. PANNU) (JUDICIAL MEMBER/ U;KF;D LNL; ) (ACCOUNTANT MEMBER/ YS[KK LNL; ) MUMBAI DATED - 05 - 2015 SKS SR. P.S, 4 ITA NO 7370/MUM/2013 ASSESSMENT YEAR: - 2005 - 06 PAGE 4 OF 4 COPY TO: THE APPELLANT THE RESPONDENT THE CONCERNED CIT(A) THE CONCERNED CIT THE DR, B BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI