CHINOOBHAI & BROTHERS, MUMBAI v. ITO WD 12(3)(3), MUBMAI

ITA 18/MUM/2009 | 2002-2003
Pronouncement Date: 31-05-2010

Appeal Details

RSA Number 1819914 RSA 2009
Assessee PAN AAATC0524H
Bench Mumbai
Appeal Number ITA 18/MUM/2009
Duration Of Justice 1 year(s) 4 month(s) 28 day(s)
Appellant CHINOOBHAI & BROTHERS, MUMBAI
Respondent ITO WD 12(3)(3), MUBMAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Bench Allotted C
Tribunal Order Date 31-05-2010
Date Of Final Hearing 19-05-2010
Next Hearing Date 19-05-2010
Assessment Year 2002-2003
Appeal Filed On 02-01-2009
Judgment Text
ITA NO. 18/MUM/2009 ASSESSMENT YEAR : 2002-03 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH MUMBAI BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) AND SHRI R S PADVEKAR (JUDICIAL MEMBER) ITA NO. 18/MUM/2009 ASSESSMENT YEAR 2002-03 DATE OF HEARING : 19.5.2010 M/S. CHINOOBHAI & BROTHERS ...... APPE LLANT CHURCHGATE HOUSE VEER NARIMAN ROAD MUMBAI 400 023 PAN AAATC0524H VS. INCOME TAX OFFICER 12(3)(3) .. RESPOND ENT AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 APPELLANT BY : SHRI SURIL V. SHAH RESPONDENT BY : SHRI S.M. KESHKAMAT O R D E R PER PRAMOD KUMAR: 1. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICA TE IN THIS APPEAL IS WHETHER OR NOT THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING T HE PENALTY OF RS.1 50 524/- LEVIED ITA NO. 18/MUM/2009 ASSESSMENT YEAR : 2002-03 PAGE 2 OF 5 U/S 271(1)(C) OF THE INCOME TAX ACT 1961 (FOR SHOR T 'THE ACT' ) FOR THE ASSESSMENT YEAR 2002-03. 2. THE RELEVANT MATERIAL FACTS ARE AS FOLLOWS. THE ASS ESSEE IS A DEALER IN CLOTHS AND HE HAD CLAIMED A DEDUCTION OF RS.46 91 074/- IN RESPECT OF BAD DEBTS WRITTEN OFF. WHILE SCRUTINIZING THE DETAILS F ILED BY THE ASSESSEE THE ASSESSING OFFICER NOTICED THAT THOUGH THE ASSESSEE HAD CLAIMED WRITE OFF IN RESPECT OF FORTY PARTIES THE ASSESSEE IS NOT IN A POSITION TO FURNISH ADDRESSES OF TWO MAJOR PARTIES NAMELY RANAVAT FASHIONS (RS.1 34 121) AND SANDEEP KUMAR & CO. (RS.2 87 517/-). IT WAS IN THIS BACKDRO P THAT HE DISALLOWED THESE AMOUNTS WHICH AGGREGATE TO RS.4 21 638/- AS IN THE ABSENCE OF SUPPORTING PROOF . THE ASSESSING OFFICER DID NOT LEAVE IT AT THAT. H E ALSO IMPOSED PENALTY U/S 271(1)(C) AS THE ASSESSEE DID N OT HAVE ANY SUBMISSIONS TO MAKE ON AS TO WHY PENALTY SHOULD NOT BE IMPOSED IN RESPECT OF THIS QUANTUM ADDITION. IN APPEAL THE LD. CIT(A) CONFIRM ED THE PENALTY AND OBSERVED THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF PROVING GENUINENESS OF TRANSACTIONS WITH THESE TWO PARTIES. THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MA TERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 4. WE HAVE NOTED THAT THE QUANTUM DISALLOWANCE HAS BEE N MADE ONLY BECAUSE THE ASSESSEE WAS NOT IN A POSITION TO FURNI SH CURRENT ADDRESS OF THESE TWO DEBTORS. THAT IS THE ONLY REASON OF DISAL LOWANCE RECORDED IN THE ASSESSMENT ORDER. THERE IS NO DISPUTE HOWEVER THA T THE AMOUNT WAS SHOWN ITA NO. 18/MUM/2009 ASSESSMENT YEAR : 2002-03 PAGE 3 OF 5 AS OF DEBTORS AND WAS ACTUALLY WRITTEN OFF IN THE B OOKS OF ACCOUNT. MERELY BECAUSE THE ASSESSEE COULD NOT FURNISH THE ADDRESS OF THESE DEBTORS IT CAN NOT BE INFERRED THAT THE ASSESSEE HAD CONCEALED ANY INCOME OR THAT THE ASSESSEE DID NOT HAVE A REASONABLE EXPLANATION FOR AN ADDITION MADE TO HIS INCOME. AS WE HAVE NOTED ABOVE THE AMOUNT WAS DULY REFLECTED IN THE BOOKS OF ACCOUNT AND ACTUALLY WRITTEN OFF. MERELY BECAUSE CLAIM OF THE ASSESSEE IS NOT ACCEPTED NEITHER IT CAN BE INFERRED THAT THE A SSESSEE HAD CONCEALED ANY PARTICULARS NOR IT CAN BE PRESUMED THAT IT IS FIT C ASE FOR IMPOSITION OF PENALTY U/S 271(1)(C). IN VIEW OF THESE DISCUSSION AND BEA RING IN MIND ENTIRETY OF THE CASE WE DEEM IT FIT AND PROPER TO DIRECT THE A SSESSING OFFICER TO DELETE THE IMPUGNED PENALTY. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 5. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. PRONOU NCED IN THE OPEN COURT TODAY ON 31 ST DAY OF MAY 2010. SD/XX SD/XX (R S PADVEKAR) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 31 ST DAY OF MAY 2010. ITA NO. 18/MUM/2009 ASSESSMENT YEAR : 2002-03 PAGE 4 OF 5 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) MUMBAI 4. COMMISSIONER (APPEALS) MUMBAI 5. DEPARTMENTAL REPRESENTATIVE C BENCH ITAT MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ITA NO. 18/MUM/2009 ASSESSMENT YEAR : 2002-03 PAGE 5 OF 5 DATE INITIAL 1. DRAFT DICTATED ON 24.5.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 25.5.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 25.5.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 25.5.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 25.5.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 31.5.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 31.5.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER