NDK METALLOYS AND INFRA PVT. LTD,AHMEDABAD vs. ITO,WARD-3(1)(1), AHMEDABAD

The assessee is in appeal before the Tribunal against the order of learned CIT(A)-9, Ahmedabad dated 11.10.2017 passed for Assessment Year 2013-14.

In response to the notice of hearing, no one has come present on behalf of the assessee; however, with the assistance of learned Departmental Representative, I have gone through the record carefully and proceed to dispose of the appeal ex parte qua the assessee.

It is also pertinent to observe that consistently for the last 2-3 occasions nobody is appearing on behalf of the assessee. The solitary grievance of the assessee is that learned CIT(A) has erred in confirming the penalty of Rs.1,31,000/-, imposed by the Assessing Officer under Section 271(1)(c) of the Act. A perusal of the record would indicate that the assessee has filed its return of income electronically on 29.09.2013 declaring total income of Rs.11,62,730/-. On scrutiny of the accounts, it revealed to the Assessing Officer

The Assessing Officer has initiated penalty proceedings and ultimately imposed a penalty of Rs.1,31,000/- under Section 271(1)(c) of the Act.

Appeal to the learned CIT(A) did not bring any relief to the assessee.

During the course of assessment proceedings, when the assessee was confronted with regard to this issue, then the assessee has given a reply submitting therein that the advances of Rs.40,60,000/- were given to Jaybee Organizers & Developers Pvt Ltd. This amount was given on 15.03.2013 for a period of 15 days only. It was given for joint tender application. When no allotment was made, it was returned to the assessee. Thus, according to the assessee, it was not in the nature of loan – rather it was for the purpose of business. Similarly, with regard to other two loans, it was contended that these were also given for the purpose of business for giving a joint tender application. Learned Assessing Officer has rejected this explanation of the assessee on the ground that it failed to submit the requisite details, i.e. copy of the joint tender application etc. On due consideration of the above facts, I am of the view that the assessee does not deserve to be visited with penalty. It has pleaded that the advances were given in the capacity of a co-applicant for tender. It was not a loan. This explanation of the assessee was not found to be false by the Assessing Officer for the purpose of invoking Explanation 1 appended to SMC- NDK Metalloys and Infra Pvt Ltd Vs. ITO For AY: 2013-14 3 Section 271(1)(c) of the Act. Therefore, to my mind, the penalty is not sustainable. I accordingly allow this appeal of the assessee and delete the penalty.

In the result, the appeal of the assessee is allowed.