ITA NO. 2140/Del/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "B", NEW DELHI
BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 2140/Del/2012
A.Y. : 2005-06
DCIT, Circle 10(1), vs. M/s DCM Shriram Consolidated
New Delhi Ltd.,
5th floor, Kanchanjunga Building,
18, Barakhamba Road,
New Delhi
(PAN/GIR NO. : AAACD0097R)
(Appellant ) (Respondent )
Assessee by : Sh. V.P. Gupta & Basant Kumar,
Adv.
Department by : Sh. J.S. Ahlawat, Sr. D.R.
ORDER
PER SHAMIM YAHYA: AM
This appeal by the Revenue is directed against the order of the
Ld. Commissioner of Income Tax (Appeals)-XVI, New Delhi dated
29.11.2011 pertaining to assessment year 2005-06.
2. The issue raised in the appeal is that Ld. Commissioner of
Income Tax (A) erred in confirming the levy of penalty u/s. 271(1)(c)
of the Income Tax Act, 1961.
3. In this case assessee company filed return of income showing
the total income of ` 58,21,77,574/-. The tax payable as per normal
provisions of Income Tax Act was shown as ` 21,30,33,327/-. The
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assessee company in the above return has also computed tax payable
u/s. 115JB of the IT Act at ` 9,68,11,559/-. The Assessing Officer made
the following disallowances in this case.
a) Deduction u/s. 80IA of the normal provisions of the
computation was rejected.
b) Foreign tour expenses are disallowed.
c) Expenses u/s. 14A made in the normal provisions of
the computation was disallowed.
d) Addition on account of differential sugar cane price.
e) Provision for doubtful debt.
f) Provision for gratuity.
3.1 The additions made on account of (a), (b), (c), (d) & (f) above
were deleted by the Ld. Commissioner of Income Tax (A) and the same
was also confirmed by the ITAT, Delhi. Assessing Officer levied the
penalty of ` 7,65,000/- on account of addition of ` 10200000/- being
provision of doubtful debts.
4. Upon assessee's appeal Ld. Commissioner of Income Tax (A) held
that he was in agreement with the assessee's counsel submission that
since the tax payable by the assessee as per the provisions of the
Income Tax Act, whether before or after the passing of the assessment
order by the Assessing Officer, was more than the tax payable on the
book profits computed in accordance with section 115JB of the Act, it
implies that the tax liability of the assessee would not have been
affected had it shown in its return of income, the book profits as
computed by the Assessing Officer. Ld. Commissioner of Income Tax
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(A) further noted that adjustment on account of provision for bad and
doubtful debts was upheld in appeal on account of retrospective
amendment made to section 115JB. Ld. Commissioner of Income Tax
(A) further noted that the penalty for concealment levied by the
Assessing Officer in A.Y. 2006-07 in the case of the assessee for
similar addition made to the book profit u/s. 115JB was deleted by the
Ld. Commissioner of Income Tax (A). Considering the above, Ld.
Commissioner of Income Tax (A) held that in the year under appeal as
well, when the assessee filed its return of income, the retrospective
amendment to section 115JB, regarding the claim in respect of bad
and doubtful debts, was not on the statute. Ld. Commissioner of
Income Tax (A) further held that no wrong or malafide claim can be
said to have been made by the assessee while filing its return.
Accordingly, Ld. Commissioner of Income Tax (A) deleted the penalty
imposed by the Assessing Officer in this regard.
5. Against the above order the Revenue is in appeal before us.
6. We have heard the rival contentions in light of the material
produced and precedent relied upon. Ld. Counsel of the assessee at
the threshold submitted that on account of similar additions in A.Y.
2006-07 and 2007-08, the Tribunal had deleted the levy of penalty in
the hands of the assessee.
7. Ld. Departmental Representative could not controvert these
submissions of the counsel for the assessee.
8. We have carefully considered the submissions and perused the
records. We find that similar addition was levied in the hands of the
assessee for A.Yrs. 2006-07 & 2007-08. For A.Y. 2007-08 Tribunal had
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noted that for A.Y. 2006-07 the matter had traveled to the Hon'ble
High Court and the Hon'ble High Court had confirmed the deletion of
penalty by observing as under:-
"CIT(Appeals) and the tribunal have deleted the said
penalty observing that the position became clear
when the retrospective amendment was made w.e.f.
1.4.2001 vide Finance (No. 2) Act, 2009. In the
present case, the assessee had filed the return on
income on 29.11.2006, which was revised on
31.3.2008. These are before the retrospective
amendment in 2009. The assessee had relied on
C.I.T. vs. HCL Comnet System and Services Ltd.
(2008) 305 ITR 409 (SC) and submitted that no
adjustment was required to be made for provision for
bad and doubtful debts under clause (c) of the
Explanation to Section 115JB. In these circumstances,
we feel the Tribunal was justified in accepting and
holding that the case is covered by Explanation 1
Clause (B) to Section 271(1) and had correctly
dismissed the appeal of the Revenue deleting the
penalty."
No substantial question of law arises. The appeal is
dismissed."
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8.1 Respectfully following the precedents as above, we confirm the
order of the Ld. Commissioner of Income Tax (A) wherein the penalty
has been deleted.
9. In the result, the appeal filed by the Revenue stands dismissed.
Order pronounced in the open court on 10/7/2012.
Sd/- Sd/-
TOLANI]
[R.P. TOLANI] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 10/7/2012
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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