TMI Blog2012 (12) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... 71(1)(C) at ₹ 12,63,208/- for A.Y. 03-04 and ₹ 3,66,715/- for A.Y. 04-05. 2. The fact for A.Y. 03-04 are that the assessee had claimed bad debt of ₹ 34,09,456/- in the name of M/s CMC Machinery in Profit and Loss Account but account of the party had not been written off . The Ld. AO did not find this debt as bad and added back in the income of the assessee. The penalty proceeded u/s 271(1)(C) was initiated by the AO for furnishing of inaccurate particulars of income in the course of the assessment proceedings. In appeal before the Co-ordinate D Bench Ahmedabad in ITA No. 2857/Ahd/2006 A.Y. 03-04 has confirmed the addition. The operative part is as under: After hearing the parties and going through the record, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebt of the amount claimed here Respectfully following the above decision of the High Court, we uphold the order of the CIT(A) in disallowing the claim of the assessee. At best it can be a bad debt for the subsequent year and the assessee would be at liberty to claim in the subsequent year after placing necessary material on record. The Assessing Officer would consider the claim of the assessee, in accordance with law. 3. The Ld. AO had given reasonable opportunity of being heard before imposing the penalty. The assessee filed reply vide letter dated 23/02/09 which was considered by the AO in penalty order for assessment year 2003- 04. But after relying on the decision of Banaras Teritorium vs. CIT (1988) 169 ITR 782 Zeekoo Shoes F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing heard to the appellant. The appellant relied vide letter 3rd March, 2008 which has been considered by the AO and imposed penalty at ₹ 3,66,715/- for A.Y. 2004-05. 6. Being aggrieved by the order of the AO, the assessee carried the matter before the Ld. CIT(A) who has deleted the penalties in both the years after analyzing the provision u/s 271(1)(C) and case laws relied upon as under:- (1). Kanbay Software India Pvt Ltd vs. DCIT in ITA No. 300/PN/07 A.Y. 2002-03 Pune for furnishing of inaccurate particulars of income. (2). Shiv Lal Tak Vs. CIT 251 ITR 373 for claim of deduction was fabricated and false. (3). CIT Vs. Bacardi Martini India 288 ITR 585 Delhi High Court merely difference of opinion of disallowance of expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equested to confirm the penalty in both the years. At the outset, the learned counsel for the appellant contended that the Hon ble ITAT in quantum appeal had considered the decision of jurisdiction of High Court in the case of M/s Dhall Enterprises and Engineering Pvt. Ltd. Vs. CIT 207 CTR 729 in both the years and confirmed the addition by holding that in A.Y. 03-04. The assessee had proved that the debt become bad in the year itself and further for A.Y. 2004-05, the Hon ble ITAT confirmed the addition by holding that the bad debt should be written off as irrecoverable in the account. By merely debiting the amount in Profit and Loss Account is not sufficient. The Ld. counsel for the appellant further argued that Hon ble jurisdiction High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37/- A.Y. 04-05 is confirmed. Therefore, the AO is directed to calculate the penalty amount on ₹ 4,34,837/-. The remaining penalty in both the years on other additions are hereby deleted by considering the order of Apex Court in the case of Reliance Petrochemical and PWC (supra). The assessee had disclosed the particulars of deduction in profit and loss account as well as in books of account before the AO for which no inaccurate particulars have been furnished. Accordingly, the penalty levied for A.Y. 03-04 is deleted and penalty for 04-05 is partly allowed. 10. In the result, the Revenue s appeal for A.Y. 03-04 is dismissed and for 04-05 is partly allowed Order pronounced in open court on the date mentioned hereinabove at capti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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