DCIT CIR 4(2), MUMBAI V. ROSY BLUE SECURITIES P. LTD, MUMBAI

ITA 798/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48496 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-10-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 06-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: VIPUL K MODY
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D : MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA. NO. 798/MUM/2009 ASSESSMENT YEAR 2003-2004 DCIT, CIRCLE 4 (2) MUMBAI 20. VS. M/S. ROSY BLUE SECURITIES P. LTD. MUMBAI 400 021 PAN AAACR4082Q (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI JITENDRA YADAV (DR) FOR RESPONDENT : MR. VIPUL K. MODY ORDER PER D. MANMOHAN, V.P. 1. THIS IS AN APPEAL FILED AT THE INSTANCE OF THE REVENUE AND IT PERTAINS TO THE ASSESSMENT YEAR 2003-2004. GROUN DS OF APPEAL ANNEXED TO FORM 36 READS AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE PENAL TY OF RS.15,75,200/- LEVIED U/S. 271 (1) (C) OF THE I. T. ACT IN RESPECT OF INCORRECT CLAIM OF BAD DEBTS AND DOUBTFUL DEBTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND CONSEQUENTLY ON MERITS TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. WE HAVE HEARD THE LEARNED DR AS WELL AS THE LEA RNED COUNSEL, APPEARING ON BEHALF OF THE ASSESSEE, ON TH E ISSUE AND CAREFULLY PERUSED THE RECORD. 2 3. FACTS IN SHORT ARE THAT ASSESSEE-COMPANY IS A S HARE AND STOCK BROKER AND FOR THE YEAR UNDER CONSIDERATION I T DECLARED TOTAL LOSS OF RS.62.78 LAKHS WHEREAS, THE ASSESSMENT WAS COMPL ETED ON A TOTAL INCOME OF RS.1,53,70,559/-. ASSESSING OFFICER DISAL LOWED A SUM OF RS.1,75,95,285/- REFERABLE TO BAD DEBTS. HE FURTHER DISALLOWED A SUM OF RS. 1 LAKH REFERABLE TO PRIOR PERIOD EXPENSES. O THER DISALLOWANCES WERE NOT TAKEN INTO CONSIDERATION FOR THE PURPOSE O F LEVY OF PENALTY AND HENCE, IT IS NOT NECESSARY TO DISCUSS ABOUT THO SE DISALLOWANCES. CONSEQUENT TO THE DETERMINATION OF TOTAL INCOME, AS SESSING OFFICER INITIATED PENALTY PROCEEDINGS AND UPON OBTAINING TH E EXPLANATION OF THE ASSESSEE, THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE EVADED INCOME TO THE EXTENT OF DISALLOWANCES MENTIO NED HEREINABOVE AND THUS A SUM OF RS.1,76,95,285/- IS DEEMED TO HAV E BEEN CONCEALED BY THE ASSESSEE ON WHICH MINIMUM PENALTY LEVIABLE W ORKS OUT TO RS.65,03,016/- AND MAXIMUM PENALTY WORKS OUT TO RS. 1.95 CRORES. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, HE IMPOSED PENALTY OF RS.65,03,016/-. 4. ON AN APPEAL FILED BY THE ASSESSEE, LEARNED CIT (A) CANCELLED THE PENALTY ON THE GROUND THAT ALL THE PA RTICULARS RELEVANT TO THE CLAIM OF BAD DEBT AND PRIOR PERIOD EXPENSES WER E FILED BEFORE THE ASSESSING OFFICER AND THE ISSUES INVOLVE MOOT QUEST IONS WHEREIN TWO VIEWS ARE POSSIBLE AND HENCE IT IS NOT A CASE OF CO NCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THOUGH PENALTY OF RS.65,03,016/- WAS CANCELLED BY THE LEARNED CIT(A), REVENUE PREFERRED AN APPEAL ONLY WITH RESPECT TO RS.15,75,2 00/- WHICH APPEARS TO BE A WRONG FIGURE MECHANICALLY TYPED AND SIGNED BY THE PARTIES. EVEN IN THE AUTHORISATION ISSUED BY THE CO MMISSIONER, THE PERMISSION WAS GRANTED TO CHALLENGE THE PENALTY OF RS.15,75,200/- ONLY. THIS HIGHLIGHTS THE CASUAL APPROACH OF THE AU THORITIES CONCERNED WHILE FILING AN APPEAL BEFORE THE TRIBUNAL. EVEN PR ESUMING FOR A MOMENT THAT IT IS A TYPOGRAPHICAL ERROR AND IT HAS TO BE SUBSTITUTED TO THE FIGURE OF RS.65,03,016/-, LEARNED COUNSEL, APPE ARING ON BEHALF OF 3 THE ASSESSEE, PLACED BEFORE US A COPY OF THE ORDER OF THE ITAT, D BENCH, MUMBAI IN THE QUANTUM PROCEEDINGS (ITA.NO. 6030/MUM/2006 DATED 30/11/2010) WHEREIN BOTH THE DI SALLOWANCES WERE SET ASIDE. IN OTHERWORDS, THE VERY BASIS FOR L EVY OF PENALTY NO LONGER SUBSISTS. UNDER THE CIRCUMSTANCES, THE APPEA L FILED BY THE REVENUE HAS NO LEGS TO STAND. WE, THEREFORE, UPHOLD THE ORDER OF THE LEARNED CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 19-4-2011. SD/- SD/- (T.R. SOOD) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 19 TH APRIL, 2011 VBP/- COPY TO 1. DCIT, CIRCLE 4 (2), R.NO. 642, 6 TH FLOOR, AAYAKAR BHAVAN, MK ROAD, MUMBAI 20. 2. M/S. ROSY BLUE SECURITIES P. LTD., 154-C, MITTAL COURT, NARIMAN POINT, MUMBAI 400 021 PAN AAACR4082Q 3. CIT(A)-IV, MUMBAI 4. CIT-4, MUMBAI 5. DR D BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.