Multi Kilfire Pvt. Ltd.,, Baroda. v. The DY.CIT., Cent.Circle-1,, Baroda.

ITA 500/AHD/2004 | 1999-2000
Pronouncement Date: 06-01-2010 | Result: Allowed

Appeal Details

RSA Number 50020514 RSA 2004
Bench Ahmedabad
Appeal Number ITA 500/AHD/2004
Duration Of Justice 5 year(s) 10 month(s) 11 day(s)
Appellant Multi Kilfire Pvt. Ltd.,, Baroda.
Respondent The DY.CIT., Cent.Circle-1,, Baroda.
Appeal Type Income Tax Appeal
Pronouncement Date 06-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 06-01-2010
Date Of Final Hearing 05-01-2010
Next Hearing Date 05-01-2010
Assessment Year 1999-2000
Appeal Filed On 24-02-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD - AHMEDABAD D BENCH (BEFORE DR.O.K. NARAYANAN VICE-PRESIDENT AND SHRI MAHAVIR SINGH JUDICIAL MEMBER) ITA NO.500/AHD/2004 [ASSTT.YEAR : 1999-2000] MULTI KILFIRE PRIVATE LTD. 103 SYNERGY HOUSE SUBHANPURA ROAD BARODA. VS. DCIT CENT.CIR.1 BARODA. ASSESSEE BY : NONE REVENUE BY : SHRI C.K.MISHRA DATE OF ORDER RESERVED : 05-01-2010 O R D E R PER DR. O.K. NARAYANAN VICE-PRESIDENT : THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEA R IS 1999-2000. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- IV AHMEDABAD DATED 9-12-2003 AND ARISES OUT OF THE PENALTY ORDER PASSE D UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961. THE AMOUNT OF PENALTY LEVIED IS RS.40 000/- 2. IN THE COURSE OF ASSESSMENT PROCEEDINGS AN ADDI TION OF RS.1 10 528/- WAS MADE ON ACCOUNT OF DISALLOWANCE O F BAD DEBTS. THE AO LEVIED PENALTY ON THE BASIS OF THE SAID QUANTUM ADDITION ON THE GROUND THAT THE CLAIM OF DEDUCTION UNDER SECTION 36 (1)(VII) OF THE ACT WAS MADE BY THE ASSESSEE WITHOUT SATISFYING THE CON DITIONS PRESCRIBED FOR. THE ASSESSEE HAS RELIED ON A DECISION OF THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. ANJANI KUMAR CO. LTD 124 TAXMA N 429 TO CLAIM DEDUCTION ON THE GROUND THAT THE AMOUNT HAS BECOME IRRECOVERABLE WHICH WAS PAID BY THE ASSESSEE TO A VENDOR FOR BUYING SEC OND-HAND MACHINERY. PAGE - 2 ITA NO.500/AHD/2004 -2- THE AO HELD THAT THE BAD DEBTS COULD BE CLAIMED AS DEDUCTION ONLY IF THE AMOUNT WAS EARLIER INCLUDED IN THE COMPUTATION OF T HE TAXABLE INCOME OF THE ASSESSEE. 3. WE CONSIDERED THE MATTER. THE QUANTUM ADDITION MADE BY THE AO COULD BE JUSTIFIED. BUT AT THE SAME TIME IT IS TO BE SEEN THAT THE ADVANCE FOR PURCHASE OF SECOND-HAND MACHINERY WAS MADE BY T HE ASSESSEE FOR THE PURPOSE OF CARRYING ON ITS BUSINESS. THEREFORE TH E ASSESSEE HAS A LOCUS STANDI TO ARGUE THAT IF NOT BAD DEBT PROPER THE IRRECOVE RABLE AMOUNT COULD AT LEAST BE TREATED AS BUSINESS LOSS. ANY HOW ALL THESE ARE MATTERS OF DISCUSSION AND INTERPRETATION. BUT FOR THE ABOVE DI FFERENCE IN VIEWS THE ADDITION MADE BY THE ASSESSING AUTHORITY DOES NOT M AKE OUT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. ONLY THING IS THAT THE CLAIM MADE BY THE ASSESSEE A S DEDUCTION WAS NOT ACCEPTED. SUCH A SITUATION DOES NOT AUTOMATICALLY MAKE OUT A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS . IN THESE CIRCUMSTANCES WE FIND THAT THE LEVY OF PENALTY IS NOT JUSTIFIED. IT IS DELETED. 4. IN RESULT THE PENALTY APPEAL FILED BY THE ASSESS EE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY THIS SIXTH DAY OF JAN UARY 2010. SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (DR.O.K. NARAYANAN) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 06-01-2010 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE PAGE - 3 ITA NO.500/AHD/2004 -3- 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR ITAT AHMEDABAD