DCIT CIRCLE 1, THANE V. M/S ADVANCE ENZYME TECHNOLOGIES LTD. (FORMERLY KNOWN AS M/S ADVANCE BIOCHEMICALS LTD), THANE

ITA 812/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4501 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 31-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR LD
• Assessee Lawyers: DINKLE HARIA LD
• Keywords: Bad and doubtful debts
• Section: 271(1)(c)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO. 812 /MUM/20 20 ( / ASSESSMENT YEAR : 2011 - 12 ) DCIT CIRCLE 1 6 TH FLOOR, ASHAR IT PARK R. NO. 22, B - WING WAGLE INDL. ESTATE ROAD NO. 16Z, THANE(W) PIN - 400 604 / VS. M/S ADVANCE ENZYME TECHNOLOGIES LTD (FORMERLY KNOWN AS ADVANCE BIOCHEMICALS LTD.) A - WING, 5TH FLOOR, SUN MAGNETICA LIC SERVICE ROAD, LOUIS WADI THANE - 400 604 ./ ./ PAN/GIR NO . A A BCA - 4555 - E ( / APPELLANT ) : ( / RESPONDENT ) REVENUE BY : SHRI BRAJENDRA KUMAR LD. SR. DR ASSESSEE BY : MS. DINKLE HARIA LD. AR / DATE OF HEARING : 28 /09 /2021 / DATE OF PRONOUNCEMENT : 01/10/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2011 - 12 ARISES OUT OF ORDER OF LD. COMMISSIONER OF INCOME - TAX ( APPEALS ) - 1 , MUMBAI [ CIT(A)] D ATED 18/11 /2019 WHICH HAS DELETED THE PENALTY OF RS.292.30 LACS AS LEVIED BY LD. ASSESSING OFFICER (AO) U/ S 271(1)(C) VIDE PENALTY ORDER DATED 26/03/2018. 2 2. THE LD. AR, AT THE OUTSET, SUBMITTED THAT SUBSTANTIAL QUANTUM AD DITIONS, AGAINST WHICH PENALTY W AS L EVIED, HAS BEEN DELETED BY THE TRIBUNAL AND THEREFORE, THE PENALTY WOULD OTHERWISE NOT SURV I VE. T H E COP Y O F TRIBUNAL ORDER ITA NOS. 866 & 1531/MUM/2017 DATED 04/03/2020 HAS BE EN P L A CED ON RECORD. REGARD I NG O T HER SMALL AD DITIONS, LD. AR RELIED ON THE IMP UGNED ORDER DELETING THE PENALTY. THE LD. SR. DR C OULD NOT CONTROVERT THE AFORESAID SUBMISSIONS. IN THE ABO VE BACKG ROUND, O UR ADJUDICATION WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 UPON PERUSAL OF PENALTY ORDER, IT COULD BE SEEN THAT THE MAJOR ADDITION AGAINST WHICH THE PENALTY HAS BEEN LEVIED IS DENIAL OF DEDUCT ION U /S 35(2AB) FOR RS.1754.48 LACS. UPON P ERUSAL OF CITED ORDER OF THE TRIBUNAL, IT COULD BE SEEN THAT DEDUCTION HAS FINALLY BEEN ALLOWED TO THE ASSESSEE BY THE TRIBUNAL. THERE IS NOTHING ON RECORD WHICH WOULD SHOW THAT THE AFOR ESAID ORD E R HAS BEEN REVERSE D, IN ANY MANNER. THEREFORE, SINCE THE QUA NTUM ADDITION HAS BEEN DELETED BY THE TRIBUNAL, PENALTY LEVIED BY LD. AO AGAINST THE SAME WOULD NOT OTHERWISE SURVIVE. WE ORDER SO. 3. 2 THE SECOND ADDITION AGAINST WHICH PENALTY HAS BEEN LEVIED IS DISALLOWANCE OF PROVISIONS FOR BAD DEBTS FOR RS.2.67 LACS. THE ASSESSEE CLAIMED THE PROVISION FOR RS.18.26 LACS BUT THE SAME WAS DENIED BY LD. AO. UPON FURTHER APPEAL, LD. CIT(A) REDUCED THE SAME TO RS.2.67 LACS SINCE THE BALANCE AMOUNT WAS ALREADY ADDED BACK IN EARLIER YEARS. CONSEQUENTLY, THE PENALTY WAS LEVIED BY LD. AO ON RS.2.67 LACS. THE LD. CIT(A) NOTED THAT THERE WAS BONA FIDE MISTAKE IN THE COMPUTATION OF INCOME AND THEREFORE, NO PENALTY WAS TO BE LEVIED AS PER THE DECISION OF 3 HONBLE APEX COURT IN CIT V/S PRICE WATERHOUSE COOPERS (P) LTD. (348 ITR 306). 3.3 THE THIRD ADDITION AGAINST WHICH THE PENALTY HAS BEEN LEVIED IS DISALLOWANCE U/S 36(I)(VA) FOR RS.5,618/ - FOR DELAYED PAYMENT OF PROVIDE NT F UND AND ESIC. THE LD. CIT(A) DELETED THE SAME BY OBSERVING THAT IT WAS NOT THE CASE THAT THE ASSESSEE FAILED TO FURNISH THE DETAILS. THERE WAS ONLY LATE PAYMENT BUT THE GENUINENESS AND VALIDITY OF THE CLAIM WAS NOT UNDER DOUBT. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US 3. 4 ON THE ISSUE OF PENALTY ON ADDITION OF PROVISION FOR DOUBTFUL DEBTS AS WELL AS DIS ALLOWANCE U/S 36(I)(VA), WE CONCUR WITH THE OBSERVATION OF LD. CIT(A) THAT THERE WAS BONA - FIDE MISTAKE ON THE PART OF THE ASSESSEE TO CLAIM THE SAME. FURTHER, THE NATURE OF DISALLOWANCES IN NOT SUCH THAT IT COULD BE SAID THAT THERE WAS CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. THEREFORE, FINDING NO INFIRMITY IN THE IMPUGNED ORDER, WE DISMISS THE APPEAL. 4. THE APPEAL STAND DISMISSED. ORDER PRONOUNCED ON 1 ST OCTOBER, 2021. SD/ - SD/ - ( VIKAS AWASTHY ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 01/10/2021 SR.PS, DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE 4 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.