Mudra Port & Special Economic Zone Ltd, Ahmedabad V. The ACIT.,(OSD)-I,Range-4, Ahmedabad

CO 123/AHD/2011

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0294 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 06-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Assessee Lawyers: VIJAY RANJAN A R

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.1234/AHD/2011 WITH CO NO.123/AHD/2011 [ASSTT.YEAR : 2007-2008] THE ACIT(OSD)-1 RANGE-4, NAVJIVAN TRUST BLDG. AHMEDABAD. /VS. MUDRA PORT & SPECIAL ECONOMIC ZONE LTD. 1 ST FLOOR, ADANI HOUSE, NR. MITHAKHALI CIRCLE AHMEDABAD. PAN : AAACG 7917 K ( (( ( -. -. -. -. / APPELLANT) ( (( ( /0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 ) / REVENUE BY : SHRI ROOPCHAND, SR.DR 4& 1 2 ) / ASSESSEE BY : SHRI VIJAY RANJAN, AR 5 1 &(* / DATE OF HEARING : 8 TH JANUARY, 2015 678 1 &(* / DATE OF PRONOUNCEMENT : 02-02-2015 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE AND CO OF THE ASSESSEE FOR THE ASSTT.YEAR 2007-2008 ARE DIRECTED AGAINST THE ORDER OF THE CIT(A). THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. ITA NO.1234/AHD/2011 (REVENUES APPEAL) 2. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: ITA NO.1234/AHD/2011 WITH CO -2- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.32,35,169/- MADE BY THE AO BEING SUNDRY BALANCES WRITTEN OFF WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE AO. 3. THE LEARNED DR SUBMITTED THAT OUT OF TOTAL AMOUN T OF RS.6.46 CRORES ONLY AMOUNT OF RS.32.35 LAKHS WAS NOT ACCEPTED BY T HE AO FOR THE REASONS THAT THE ASSESSEE COULD NOT PROVE THAT THE SUNDRY B ALANCE WRITTEN OFF HAVE IN FACT BECOME BAD DURING THE RELEVANT YEAR. HE RE FERRED TO THE RELEVANT PORTIONS OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVENUE. HE SUBMITTED THAT THESE AMOUNTS WERE OUTSTANDING SINCE THE YEAR 2003-04 AS IS PROVED BY THE LEDGER ACCOUNT COPIES OF THESE TWO PA RTIES SUBMITTED BY THE ASSESSEE, AND THE ONUS WAS ON THE ASSESSEE TO PROVE THAT THE SAME HAS BECOME IRRECOVERABLE, AND HENCE DESERVES TO BE WRIT TEN OFF. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DEBTS I N QUESTION HAVE BECOME IRRECOVERABLE AND NO RECOVERY COULD BE MADE TILL DA TE BY THE ASSESSEE. HE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE WITH THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F TRF LTD., 323 ITR 397. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE FACT THAT AMOUNTS WITH REGARD TO T WO PARTIES OF SUNDRY BALANCES WERE ACTUALLY WRITTEN OF F IN THE ACCOUNT BOOKS OF THE ASSESSEE, IS NOT IN DISPUTE. THE LEARNED CO UNSEL FOR THE ASSESSEE HAS STATED AT BAR THAT NO RECOVERY FROM THESE TWO PARTI ES COULD BE MADE BY THE ASSESSEE TILL DATE. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT RATIO OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF TRF LTD. (SUPRA) IS APPLICABLE TO THE FACTS OF THE ASSESSEE, AND ACC ORDINGLY, NO INTERFERENCE ITA NO.1234/AHD/2011 WITH CO -3- IN THE ORDER OF THE CIT(A) IS CALLED FOR, AND THE G ROUND NO.1 OF THE REVENUE IS DISMISSED. CO.123/AHD/2011 (ASSESSEES CO) 5. THE ONLY GROUND OF THE CO OF THE ASSESSEE IS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF A SUM OF RS.3,48,000 FOR THE EXPENDITURE INCURRED BY THE ASSESSEE-COMPAN Y BY WAY OF RENT TO CUSTOM STAFF POSTED AT THE PORT. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE EXPENDITURE WAS INCURRED BY THE ASSESSEE-COMPANY BY WAY OF ACCO MMODATION FACILITY PROVIDED TO THE CUSTOMS STAFF PEOPLE POSTED AT THE PORT. HE SUBMITTED THAT THE EXPENDITURE WAS INCURRED FOR BUSINESS CONSIDERA TION ONLY, AND THEREFORE ARE ALLOWABLE EXPENDITURE. THE LEARNED D R SUBMITTED THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WAS AGAINST TH E PUBLIC POLICY, AND THEREFORE SPECIFICALLY NOT ALLOWABLE UNDER THE ACT. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT PROVIDING ACCOMMODATION TO THE CUSTOM DEP ARTMENT PERSONNEL COULD NOT BE ALLOWED TO THE ASSESSEE AS PER THE PRO VISIONS OF THE INCOME TAX ACT. ACCORDINGLY NO INTERFERENCE IN THE ORDER OF THE CIT(A) ON THIS ISSUE IS CALLED FOR, AND THE GROUND OF THE CO OF TH E ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CO OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT