Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (7) TMI 757 - ITAT MUMBAI

2016 (7) TMI 757 - ITAT MUMBAI - TMI - Penalty u/s 271(1)(c) - allowability of claim of bad debts - eligiblility to carry forward loss - Held that:- The levy of penalty and its confirmation has far reaching serious implications upon an assessee, since it may also invite prosecution of the assessee. Thus, matters with regard to ‘levy’ of penalty cannot be taken lightly or casually as it may cause unintended and avoidable hardship to the tax payers. Further, it is well settled law that levy of pen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

acts of the case before us nothing has been brought by the authorities to show that the claim of the assessee was bogus. Nothing has been shown to establish whether there was concealment of income or furnishing of inaccurate particulars of income and how. It has been merely mentioned by the AO in the last para of the penalty order that in case return of the assessee was not selected for scrutiny, then it would have resulted in excess carry forward of the losses to be adjusted against the income .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vy of penalty was highly unjustified and the same is directed to be deleted. - Decided in favour of assessee. - ITA NO.2197/Mum/2013 - Dated:- 13-7-2016 - Shri Joginder Singh, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Appellant : Shri Dharmesh Shah ( AR) For The Revenue : Capt. Pradeep S. Arya ( Sr. DR) ORDER Per Ashwani Taneja (Accountant Member): This appeal has been filed by the Assessee against order of Ld. order of Ld. Commissioner of Income Tax (Appeals) -6, Mumba .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1. Ld. Counsel of the assessee relied upon following judgments in support of his arguments that no penalty should be levied on this case. 1. Decision of Hon'ble Supreme Court in case of CIT v. Reliance Petroproducts Pvt. Ltd [322 ITR 158]. 2.Decision of Hon'ble Supreme Court in case of Price Waterhouse Coopers Pvt. Ltd v. CIT & Ors [348 ITR 3061 3. Order of Hon'ble Mumbai Tribunal in case of B. Melaram & Sons v. ACIT [ITA No.5143/Mum/2014] dated 25.02.2016 for A.Y. 2008-09. 4 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lication money which had become irrecoverable was disallowed on the ground that it (i.e. impugned amount) was not eligible as bad debt u/s 36(1)(iii). The assessee company did not file appeal in quantum because it had filed the return showing loss of ₹ 63,21,756/- which was not even available for carry forward as the return was filed late. Even after the addition, the assessment was done by the AO at loss of ₹ 44,96,756/-. Under these circumstances, the assessee did not contest the i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

culars of income as well as furnished inaccurate particulars of such income by claiming a deduction of ₹ 18,25,000/- in the garb of bad debt' even though the ₹ 18,25,000/- was paid towards application money for acquisition of shares and the money lost was not related to any business activity. Under the circumstances, the levy of penalty at the minimum rate of 100% amounting to ₹ 6,14,2951- is found to be perfectly valid. 2. The appeal is dismissed. Sd/- Commissioner of Inco .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t while levying the penalty in the penalty order, the AO has not made out a case for levy of penalty. He has not demonstrated how there was concealment of income or furnishing inaccurate particulars of income. If the claim of the assessee was not allowable as bad debt u/s 36(1)(iii), then, alternatively, the assessee may have been entitled for its claim as business loss u/s 37(1). No observations or findings have been given by any of the authorities in this regard. It has nowhere been mentioned .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pute was with regard to allowability of claim of bad debts made by the assessee for the reason that share application money had become irrecoverable. The disallowance made by the AO was not contested vigorously by the assessee as the same was revenue neutral as the assessee had incurred huge losses, which were not even available for carry forward and set off in future years. Thus, apparently, there was no motive with the assessee to make a bogus or inflated claim while filing its return of incom .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ayers. Further, it is well settled law that levy of penalty is not automatic upon the making of disallowance itself by the AO in the assessment order. Any disallowance/addition in the assessment order would not necessarily lead to levy of penalty ipso facto as a natural consequence. The determination of tax liability and levy of penalty are two different events under the income tax law. The AO is duty bound and obliged under the law to make out a case for levy of penalty, independent of the asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f past experience that by passing such orders which are in blatant disregard of law, the Revenue does not gain anything substantive, but it surely scares away even sincere and honest tax payers. In our considered view, such kind of approach should be avoided in all circumstances so that faith of the tax payers upon the income tax department for its fair, transparent and hassle-free functioning can be increased and as a result of it, voluntary tax compliance can also be strengthened. 3.8. It is f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Hon ble Supreme Court came down heavily upon the approach of the assessing officer whereby penalty was levied on automatic basis on making of disallowance of a claim of the assessee in the assessment order. Some of the useful observations of the Hon ble Supreme Court are reproduced hereunder: In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version