The ACIT, Circle-4, Ahmedabad V. Gujarat Gas Company Ltd., Ahmedabad

ITA 92/AHD/2008

• Counselvise Citation: 9220514 RSA 2008
• Duration Of Justice: 4 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-02-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 03-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KASHYAP
• Assessee Lawyers: SANJAY R SHAH
• Keywords: Bad and doubtful debts; Difference of opinion
• Section: 43B; 14A

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ %&' ( ) %&' ( ) %&' ( ) %&' ( ), , , , &* + &* + &* + &* + & ' & ' & ' & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND B.P. JAIN, ACCOUNTANT MEMBER) ITA NOS.92, 93 AND 94/AHD/2008 WITH CO NOS.45, 46 AND 47/AHD/2008 [ASSTT.YEARS: 1998-1999, 2000-2001 AND 2001-2002] ACIT, CIR.4 AHMEDABAD. /VS. GUJARAT GAS CO. LTD. 2, SHANTISADAN SOCIETY NR.PARIMAL GARDEN ELLISBRIDGE, AHMEDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 &/ REVENUE BY : SHRI SANJEEV KASHYAP, SR.DR 45 1 2 &/ ASSESSEE BY : SHRI SANJAY R. SHAH 6 1 57*/ DATE OF HEARING : 13 TH FEBRUARY, 2012 89: 1 57*/ DATE OF PRONOUNCEMENT : 02-03-2012 &; / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THESE ARE REVENUES APPEALS AND THE ASSESSEES CO FOR ASSESSMENT YEARS 1998-199 9, 2000-2001 AND 2001-2002 AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-VIII, AHMEDABAD. THESE ARE BEING DISPOS ED OF WITH THIS CONSOLIDATED ORDER. ITA NO.92/AHD/2008 (A.Y 1998-1999) 2. THE ONLY ISSUE RAISED IN THIS REGARD IN THE APPE AL OF THE REVENUE IS REGARDING VALIDITY OF PENALTY UNDER SECTION 271(1)( C) OF THE INCOME TAX ACT, 1961. THE LEARNED COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE PENALTY IN THIS CASE WAS LEVIED ON TWO ISSUES VIZ. DEFERRED PAYMENT CREDIT INTEREST OF RS.46,79,262/- WHICH WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF ITA NOS.92 TO 94/AHD/2008 WITH CO NOS.45 TO 47/AHD/2008 -2- THE ASSESSEE AND THE ADDITION MADE BY THE AO WAS DE LETED BY THE TRIBUNAL IN ASSESSEES QUANTUM APPEAL IN ITA NO.833 /AHD/2005 DATED 3- 4-2009. THE LEARNED DR COULD NOT CONTROVERT TO THE SUBMISSIONS OF THE LEARNED COUNSEL OF THE ASSESSEE. 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND T HAT SINCE DEFERRED PAYMENT CREDIT INTEREST WAS DELETED BY THE TRIBUNAL IN THE ASSESSEES QUANTUM OF APPEAL FOR THE RELEVANT ASSTT.YEAR 1998- 99 VIDE ORDER DATED 3- 4-2009 (SUPRA), THE PENALTY IMPOSED UNDER SECTION 2 71(1)(C) OF THE ACT ON THIS ISSUE DOES NOT SURVIVE, WE CONFIRM THE ORDE R OF THE CIT(A) IN CANCELLING THE PENALTY AND DISMISS THIS ISSUE RAISE D IN THE GROUND OF APPEAL OF THE REVENUE. 4. THE SECOND ISSUE ON WHICH THE PENALTY UNDER SECT ION 271(1)(C) WAS IMPOSED IS REGARDING THE DISALLOWANCE UNDER SECTION 43B FOR THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. THE LEA RNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE MADE BY TH E AO HAS BEEN DELETED BY THE TRIBUNAL VIDE ITS ORDER DATED 3-4-20 09 (SUPRA). THE LEARNED DR COULD NOT CONTROVERT TO THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND T HAT THE DISALLOWANCE MADE UNDER SECTION 43B FOR THE EMPLOYE ES CONTRIBUTION TO PF WAS DELETED BY THE TRIBUNAL IN THE ASSESSEES QU ANTUM APPEAL FOR THE ASSTT.YEAR 1998-99 VIDE ITS ORDER DATED 3-4-2009 (S UPRA) AND THEREFORE, THE PENALTY UNDER SECTION 271(1)(C) DOES NOT SURVIVE AN D ACCORDINGLY WE CONFIRM THE ORDER OF THE CIT(A) IN CANCELLING THE P ENALTY AND THIS GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. ITA NOS.92 TO 94/AHD/2008 WITH CO NOS.45 TO 47/AHD/2008 -3- 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ITA NO.93/AHD/2008 (A.Y.2000-2001) 7. THE ONLY ISSUE RAISED IN THIS APPEAL OF THE REVE NUE IS REGARDING IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PENALTY WAS IMPOSED ON THREE COUNTS. FIRSTLY, THE DISALLOWANCE WHICH WAS MADE U NDER SECTION 35D OF THE ACT OF RS.92,123/-. HE SUBMITTED THAT THE AMOU NT WAS DISCLOSED IN THE STATEMENT OF TOTAL INCOME FILED BY THE ASSESSEE AND THEREFORE NO CASE OF PENALTY IS MADE OUT. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND T HAT THE DISALLOWANCE WAS MADE UNDER SECTION 35D OF THE ACT. THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS IN ITS RETURN OF I NCOME FILED WITH THE DEPARTMENT. IT IS A CASE OF HONEST DIFFERENCE OF O PINION REGARDING THE ALLOWABILITY OF CERTAIN CLAIM MADE BY THE ASSESSEE ON WHICH NO PENALTY UNDER SECTION 271(1)(C) WAS IMPOSABLE. ACCORDINGLY , WE CONFIRM THE ORDER OF THE CIT(A) IN CANCELLING THE PENALTY AND T HIS ISSUE RAISED IN THE GROUND IS DISMISSED. 9. THE SECOND ISSUE ON WHICH THE PENALTY IS IMPOSED IS REGARDING THE ADDITION ON ACCOUNT OF DEFERRED PAYMENT CREDIT INTE REST OF RS.23.61 LAKHS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION MADE BY THE AO HAS BEEN DELETED BY THE TRIBUNAL IN THE QUAN TUM APPEAL OF THE ASSESSEE FOR THE RELEVANT ASSTT.YEAR 2000-2001 IN I TA NO.3446/AHD/2004 VIDE ORDER DATED 30-1-2009. THE LEARNED DR COULD N OT CONTROVERT TO THE SUBMISSIONS OF THE LEARNED COUNSEL OF THE ASSESSEE. ITA NOS.92 TO 94/AHD/2008 WITH CO NOS.45 TO 47/AHD/2008 -4- 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE QUANT UM APPEAL OF THE ASSESSMENT FOR THE RELEVANT ASSTT.YEAR 2000-2001 BY THE TRIBUNAL VIDE ITS ORDER DATED 30-1-2009 (SUPRA). THE FACTS OF THE CA SE ARE IDENTICAL WITH THE FACTS OF THE SIMILAR DISALLOWANCE MADE IN THE EARLI ER A.Y.1998-99. FOR THE REASONS RECORDED IN THE FOREGOING PARAGRAPHS OF THIS ORDER, WHILE DISPOSING OF THE REVENUES APPEAL FOR A.Y.1998-99 O N THIS ISSUE, WE CONFIRM THE ACTION OF THE CIT(A) IN CANCELLING THE PENALTY, AND ACCORDINGLY DISMISS THIS ISSUE OF THE REVENUE RAISE D IN THE GROUND OF THE APPEAL. 11. THE THIRD ISSUE ON WHICH THE PENALTY WAS IMPOSE D IS REGARDING DISALLOWANCE OF RS.8,42,500/- UNDER SECTION 14A OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE H AS BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF THE AO IN THE QUANTUM APPEA L OF THE ASSESSEE FOR THE ASSTT.YEAR 2001-2002 IN ITA NO.3446/AHD/2004 AN D 3464/AHD/2004 DATED 30-1-2009. THE LEARNED DR RELIED ON THE ORDE R OF THE AO. 12. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT WAS RESTO RED BY THE TRIBUNAL IN ASSESSEES QUANTUM APPEAL FOR THE ASSSTT.YEAR 20 01-2002 VIDE ORDER DATED 30-1-2009 (SUPRA), AND ACCORDINGLY THE PENALT Y UNDER SECTION 271(1)(C) DOES NOT SURVIVE AND WAS RIGHTLY CANCELLE D BY THE CIT(A). HOWEVER, THE AO, IF SO REQUIRED AS PER THE LAW, INI TIATE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AT T HE TIME OF RE- ADJUDICATION OF THE ISSUE AS PER THE DIRECTIONS OF THE TRIBUNAL. WE DIRECT ACCORDINGLY. ITA NOS.92 TO 94/AHD/2008 WITH CO NOS.45 TO 47/AHD/2008 -5- 13. IN THE RESULT, THE REVENUES APPEAL FOR A.Y.200 0-2001 IS DISMISSED. ITA NO.94/AHD/2008 (A.Y.2001-2002) 14. THE ONLY ISSUE IN THIS APPEAL OF THE REVENUE IS REGARDING VALIDITY OF IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE LEARNED AR SUBMITTED THAT THE PENALTY HAS BEEN IMPOSED ON F OUR COUNTS. FIRSTLY, THE DISALLOWANCE MADE UNDER SECTION 35D OF RS.92,12 3/-. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSE E HAS DISCLOSED ALL THE NECESSARY PARTICULARS IN ITS RETURN OF INCOME FILED , AND THEREFORE PENALTY WAS RIGHTLY CANCELLED BY THE CIT(A). THE LEARNED D R COULD NOT CONTROVERT TO THIS SUBMISSION OF THE LEARNED COUNSE L FOR THE ASSESSEE. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS RELAT ING TO THE ISSUE OF ALLOWANCE UNDER SECTION 35D OF THE ACT IN ITS RETUR N OF INCOME FILED. IT IS A CASE OF HONEST DIFFERENCE OF OPINION REGARDING TH E ALLOWABILITY OF CERTAIN CLAIM MADE BY THE ASSESSEE FOR WHICH NO PEN ALTY UNDER SECTION 271(1)(C) OF THE ACT WAS IMPOSABLE. ACCORDINGLY, W E HOLD THAT THE CIT(A) HAS RIGHTLY CANCELLED THE PENALTY UNDER SECT ION 271(1)(C) ON THIS ISSUE. 16. THE SECOND ISSUE ON WHICH THE PENALTY UNDER SEC TION 271(1)(C) WAS IMPOSED IS REGARDING THE DEFERRED PAYMENT CREDIT IN TEREST OF RS.1,65,352/- . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IN THE QUANTUM APPEAL OF THE ASSESSEE FOR A.Y.2001-2002 THE TRIBUN AL IN ITA NO.36 AND 134/AHD/2005 DATED 28-2-2011 HAS DELETED THE ADDITI ON MADE BY THE AO. ITA NOS.92 TO 94/AHD/2008 WITH CO NOS.45 TO 47/AHD/2008 -6- THE LEARNED DR COULD NOT CONTROVERT TO THE SUBMISSI ONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. 17. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN VIEW OF THE FACT THAT THE ADDITION MADE ON ACCOUNT OF DEFERRED PAYMENT CREDIT INTEREST HAS BEEN DELETED BY THE TRIBUNAL IN ASSESSEES APPEAL FOR TH E RELEVANT ASSTT.YEAR 2001-2002, WE HOLD THAT THE CIT(A) HAS RIGHTLY CANC ELLED THE PENALTY IMPOSED ON THE ASSESSEE. SIMILAR ADDITION MADE IN THE EARLIER YEARS BY THE AO HAVE BEEN DELETED BY THE TRIBUNAL ALSO IN TH E QUANTUM APPEAL OF THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED AND THE GROUND OF THE REVENUES APPEAL ON THIS ISSUE IS DISMISSED. 18. THE THIRD ISSUE ON WHICH THE PENALTY HAS BEEN I MPOSED UNDER SECTION 271(1)(C) OF THE ACT IS REGARDING THE DISAL LOWANCE MADE UNDER SECTION 14A OF THE ACT AMOUNTING TO RS.38.12 LAKHS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE H AS BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF THE CIT(A) VIDE ITS ORDER I N ITA NO.36/AHD/2005 AND 134/AHD/2005 DATED 28-2-2011 AND THEREFORE THE PENALTY CANNOT BE IMPOSED ON THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THE ISSUE HAS BEEN RESTORED BY THE TRIBUNAL IN THE QUANTUM APPEAL OF THE ASSESSEE TO THE FILE OF THE CIT(A) AND NOT TO THE AO, AND THEREFORE THE PENALTY COULD NOT BE CANCELLED ON THIS ISSUE. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ISSUE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT HAS BE EN RESTORED TO THE FILE OF THE CIT(A) BY THE TRIBUNAL IN THE QUANTUM APPEAL OF THE ASSESSEE FOR THE RELEVANT ASSTT.YEAR 2001-2002 VIDE ORDER DATED 28-2-2011 (SUPRA). IN THESE FACTS, WE HOLD THAT IT SHALL BE IN THE FITNES S OF THING TO RESTORE THE ITA NOS.92 TO 94/AHD/2008 WITH CO NOS.45 TO 47/AHD/2008 -7- ISSUE OF VALIDITY OF PENALTY IMPOSED ON DISALLOWANC E MADE UNDER SECTION 14A OF THE ACT OF RS.38.12 LAKHS TO THE FILE OF THE CIT(A) TO DISPOSE OF THE SAME ON MERIT IN ACCORDANCE WITH LAW AND IN LIG HT OF HIS DECISION IN THE QUANTUM APPEAL OF THE ASSESSEE, RESTORED TO HIS FILE BY THE TRIBUNAL, AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEAR D TO BOTH THE SIDES. WE DIRECT ACCORDINGLY. 20. THE FOURTH ISSUE ON WHICH THE PENALTY WAS IMPOS ED IS OF BAD DEBTS WRITTEN OFF OF RS.32,618/-. THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ISSUE HAS BEEN RESTORED TO THE F ILE OF THE AO BY THE TRIBUNAL IN THE QUANTUM APPEAL OF THE ASSESSEE FOR THE RELEVANT ASSTT.YEAR 20001-002 VIDE ORDER DATED 28-2-2011 (SUPRA) AND TH EREFORE THE PENALTY COULD NOT BE SUSTAINED. THE LEARNED DR COULD NOT C ONTROVERT TO THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE . 21. WE HAVE CONSIDERED RIVAL SUBMISSIONS. SINCE T HE ISSUE HAS BEEN RESTORED BY THE TRIBUNAL IN THE QUANTUM APPEAL OF T HE ASSESSEE TO THE FILE OF THE AO, WE HOLD THAT THE PRESENT PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT CANNOT BE SUSTAINED AND THE CI T(A)S ORDER ON THIS ISSUE IS CONFIRMED. HOWEVER, SINCE THE MATTER HAS BEEN RESTORED TO THE FILE OF THE AO FOR RE-ADJUDICATION IN THE QUANTUM A PPEAL OF THE ASSESSEE, WE HOLD THAT THE AO, IF SO REQUIRED AS PER LAW, MAY RE-INITIATE THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WHIL E RE-ADJUDICATING THE ISSUE. WE DIRECT ACCORDINGLY. 22. IN THE RESULT, THE REVENUES APPEAL IS PARTLY A LLOWED FOR STATISTICAL PURPOSE. CO NO.45, 46 AND 47/AHD/2008 ITA NOS.92 TO 94/AHD/2008 WITH CO NOS.45 TO 47/AHD/2008 -8- 23. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMIT TED THAT ALL THE ISSUES RAISED IN THE THREE COS. OF THE ASSESSEE ARE REGARDING THE ISSUE OF VALIDITY OF SATISFACTION RECORDED BY THE AO WHILE I NITIATING PENALTY IN THESE CASES. THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRESSED THESE GROUNDS OF THE COS., WHICH ARE ACCORDINGLY DISMISSE D. 24. IN THE RESULT, THE REVENUES ITA NO.92/AHD/2008 FOR A.Y.1998-99 AND THE ITA NO.93/AHD/2008 FOR A.Y.2000-2001 ARE DI SMISSED AND ITA NO.94/AHD/2008 FOR A.Y.2001-2002 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ALL THREE CROSS OBJECTIONS OF THE ASSESSE E FOR A.Y.1998-99, 2000-2001 AND 2001-2002 ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&' ( ) %&' ( ) %&' ( ) %&' ( ) /B.P. JAIN) &* + &* + &* + &* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD