DEVI SAHAY SAXENA V. ASTT COMMISSIONER OF I T JAIPUR

ITA/58/2011

AI Insights

The case involves Devi Sahay Saxena, the appellant, who challenged the order of the Income Tax Appellate Tribunal, Jaipur, which had restored the Assessing Officer's decision disallowing a claim of Rs. 2,00,000 as bad debt. The initial disallowance by the Assessing Officer was overturned by the Appellate Authority, but the Tribunal reversed this decision, leading to the present appeal. The main legal issue was whether the bad debt claimed by the assessee was related to his commission income, which is a prerequisite for claiming it as a deduction under the Income Tax Act.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 732697 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 16-12-2011
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: DEVENDRA KUMAR
• Keywords: Appellate Authority; Assessment Order; Bad debt; Commission income; Income Tax; Income tax appellate tribunal
• Section: 260A

Judgement Text

" (1) DB INCOME TAX APPEAL 58/2011 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR ORDER D.B. INCOME TAX APPEAL NO.58/2011 DEVI SAHAY SAXENA Vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6, JAIPUR DATE: 16.12.2011 HON'BLE THE CHIEF JUSTICE MR. ARUN MISHRA HON'BLE MR. JUSTICE NARENDRA KUMAR JAIN-I Mr. Devendra Kumar, for the appellant. **** BY THE COURT:(PER HON'BLE JAIN, J.) Heard learned counsel for the appellant. 2. Assessee/appellant has preferred this appeal under Section 260A of Income Tax Act, 1961 challenging the order dated 09.12.2010 passed by the Income Tax Appellate Tribunal, Jaipur Bench-'B', Jaipur in ITA No.283/JP/2010, whereby appeal filed by the Revenue was partly allowed. 3. The dispute in the present appeal relates to claim of Rs.2,00,000/- as bad debt, which was disallowed by the Assessing Officer and the same was added in the income of the assessee. The said addition was set aside by the Appellate Authority, however, the Income Tax Appellate Tribunal set aside the order of the Appellate Authority in this behalf and (2) DB INCOME TAX APPEAL 58/2011 restored the order of the Assessing Offcer. Hence, this appeal has been preferred. 4. The Assessing Officer, in its assessment order, in para 6 has observed that assessee is unable to satisfy as to what was his income against which this amount has been claimed as bad debt and since he has not given any satisfactory explanation, nor has produced any oral or documentary evidence, therefore, the same is disallowed. 5. The learned Appellate Authority allowed the said claim holding that Assessing Officer was not justified in disallowing the aforesaid claim of Rs.2 lacs. The learned Tribunal considered the matter in detail and in para 3.4 of its judgment, came to a conclusion that bad debt in the present case cannot be considered to be allowed because it is not a part of payment relating to commission income. Para 3.4 of the order of the learned Tribunal is reproduced as under:- “We have heard both the parties. The assessee is engaged in the business of commission. It is not the case of the assessee to procure land on his behalf. Moreover, there is no material on record to suggest that the persons to whom advances were made, were not willing to return the advance. The assessee has claimed the bad debt of Rs.2.00 lacs against the commission income. The sums so paid cannot be considered to have been paid for earning commission. Hence, bad debt cannot be considered to be allowed because it is not a part of payment relating to commission income. Hence, the ld. CIT(A) was not justified in deleting the addition of Rs.2.00 lacs.” (3) DB INCOME TAX APPEAL 58/2011 6. We have considered the submissions of the learned counsel for the appellant in the light of reasons assigned by the Assessing Officer, Appellate Authority and the Income Tax Appellate Tribunal and we are of the view that the reasons assigned by the Tribunal for not allowing bad debt on the ground that it is not a part of payment relating to commission income, are absolutely legal and justified. The said question relates to a question of fact and in our view, no substantial question of law is involved in this appeal so as to entertain it. 7. Hence, the appeal is dismissed. (NARENDRA KUMAR JAIN-I),J. (ARUN MISHRA),CJ. /KKC/ "