THE ACIT, CENTRAL CIRCLE-2(2), AHMEDABAD V. SOMA TEXTILES & INDUSTRIES LTD., AHMEDABAD

MA 17/AHD/2025

AI Insights

The case involves the Assistant Commissioner of Income Tax, Central Circle \\u2013 2(2), Ahmedabad (Appellant) vs. Soma Textiles & Industries Limited (Respondent) concerning the Assessment Year 2008-09. The Revenue filed a Miscellaneous Application seeking rectification of the Tribunal's order which had deleted certain penalties. The Revenue contended that the Tribunal had erred by not considering the disallowance of GDR and miscellaneous expenses while deleting the penalty related to Foreign Exchange Fluctuation. The Tribunal, upon review, acknowledged the oversight and recalled the specific paragraph, thereby allowing the Revenue's application and deleting the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470386 (ITAT-AHMEDABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-03-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Other Referred Cases: Reliance Petroproducts Private Limited (2010) 323 ITR 158 (SC)
• Laws Referred To: Section 271(1)(c) of the Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAVAN LIMBASIYA
• Assessee Lawyers: SURESH GANDHI
• Keywords: Speculation loss
• Section: 271(1)(c)

Judgement Text

"M.A. No.17/Ahd/2025 (Assessment Year: 2008-09) ACIT vs. Soma Textiles & Industries Limited Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER M.A. No.17/Ahd/2025 (in ITA No.53/Ahd/2022) Assessment Year: 2008-09 The Assistant Commissioner of Income Tax, Central Circle – 2(2), Ahmedabad, Rooma No.309, 3rd Floor, Aaykar Bhawan, Ashram Road, Ahmedabad. Vs. Soma Textiles & Industries Limited, Rakhial Road, Rakhial, Ahmedabad – 380 023. [PAN – AADCS 0405 R] (Appellant) (Respondent) Assessee by Shri Suresh Gandhi, A.R. Revenue by Shri Kavan Limbasiya, Sr. DR Date of Hearing 07.03.2025 Date of Pronouncement 11.03.2025 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER: This Miscellaneous Application is filed by the Revenue in respect of order dated 28.08.2024 passed by the Tribunal. 2. The Ld. DR stated that the penalty has been deleted on the issues which was only one part and has remained silent on the issue of adjustment made in international transaction disallowance of GDR and disallowance of miscellaneous expenses. The Tribunal has committed an error and hence it requires rectification. 3. The Ld. AR relied upon the order of the Tribunal. M.A. No.17/Ahd/2025 (Assessment Year: 2008-09) ACIT vs. Soma Textiles & Industries Limited Page 2 of 3 4. We have heard both the parties and perused all the relevant material available on record. It appears that only two components of the penalty i.e. addition in respect of disallowance of loss on Forex Derivatives treating it as speculative loss and disallowance of Foreign Exchange Fluctuation loss has been taken into account while deciding the penalty and thus there is a mistake apparent on record. Thus, the order dated 28.08.2024 to the extent of paragraph no.7 is recalled and paragraph no.7 reads as under:- “7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CITA) confirmed the addition relating to adjustment made in international transaction disallowance of GDR issues but the assessee has not contested the issue related to the disallowance of miscellaneous expenses and disallowance of Foreign Exchange Fluctuation addition was deleted to the extent of Rs.57,76,604/- and confirmed to the extent of Rs.68,96,702/-. In the original order, Section 271(1)(c) of the Act was initiated only to the extent of disallowance of Foreign Exchange Fluctuation but in penalty order dated 30.10.2017 all the components were taken together while calculating the penalty on the total addition of Rs.4,21,43,500/-. But, the fact remains that the initiation of penalty under Section 271(1)(c) of the Act lack the very satisfaction of furnishing of inaccurate particulars of income or concealment of income on the part of the Revenue and there is no finding or reasoning given in the penalty order to that extent. The advice given to the assessee by the Consultant cannot be termed as furnishing of inaccurate particulars of income as envisaged under Section 271(1)(c) of the Act for the penalty provisions and besides this, the component of deletion of addition to the extent of Rs.57,76,604/- related to disallowance on Foreign Exchange Fluctuation was not at all considered while determining the penalty. Thus, in the light of the decision of Hon’ble Apex Court in the case of Reliance Petroproducts Private Limited (2010) 323 ITR 158 (SC), the penalty levied under Section 271(1)(c) of the Act is not justifiable on the part of the M.A. No.17/Ahd/2025 (Assessment Year: 2008-09) ACIT vs. Soma Textiles & Industries Limited Page 3 of 3 Assessing Officer. Thus, the penalty under Section 271(1)(c) of the Act is deleted.” 5. Thus, the present Miscellaneous Application is allowed. 6. In the result, the Miscellaneous Application filed by the Revenue is allowed. Order pronounced in the open Court on this 11th March, 2025. Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 11th March, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "