DCIT, Circle - 4, Kolkata, Kolkata V. Adarsh Kanoria, Kolkata

ITA 1008/KOL/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2537 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 30-05-2008
• Court: TRIBUNAL
• Department Lawyers: D R MAJHI
• Assessee Lawyers: MANISH TIWARI
• Keywords: Business income
• Section: 142(1); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI C. D. RAO , AM] I.T.A. NO.1008/KOL/2008 ASSESSMENT YEAR: 2001-02 DEPUTY COMMISSIONER OF INCOME-TAX, -VS- ADARSH K ANORIA CIRCLE-4, KOLKATA. (PA NO.AAACK6730E) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI D. R. MAJHI RESPONDENT BY : SRI MANISH TIWARI O R D E R PER D. K. TYAGI, JM: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 04.03.2008 FOR ASSESSMENT YEA R 2001-02 ON THE SOLE GROUND OF DELETING THE DISALLOWANCE OF RS.28,08,135/- BEING B AD DEBT WRITTEN OFF. 2. BRIEF FACTS OF THE CASE AS OBSERVED BY THE AO AR E THAT THE ASSESSEE HAS WRITTEN OFF AN AMOUNT OF RS.28,08,135/- AS BAD DEBT RECEIVABLE FROM M/S. PREMIER VINYL FLOORING LTD. UNDER BUSINESS INCOME. VIDE NOTICE U/S. 142(1) THE ASSESSEE WAS ASKED TO SUBSTANTIATE THIS CLAIM OF BAD DDEBT. IN REPLY, TH E ASSESSEE STATED THAT HE HAD DISCOUNTED THE BILL OF EXCHANGE DRAWN BY M/S. TRINITY ENTERPRI SE, NEW DELHI DULY ACCEPTED BY M/S. PREMIER VINYL FLOORING LTD. FOR PURCHASE OF HOSIERY MATERIAL IN THE ASSESSMENT YEAR 1996-97 AND HAD OFFERED THE COMMISSION INCOME OF RS .3,87,215/- ON ACCOUNT OF BILL DISCOUNTING FOR TAX IN THE AY 1996-97. THE ASSESSE E FURTHER STATED THAT DESPITE REPEATED REMINDERS THE ASSESSEE COULD NOT REALIZE THE SUM OF RS.28,08,135/- FROM M/S. PREMIER VINYL FLOORING LTD. AND ULTIMATELY THE AMOUNT WAS W RITTEN OFF IN THE INSTANT ASSESSMENT YEAR AND CLAIMED AS A DEDUCTION AS PER THE PROVISIO NS OF SECTION 29 OF THE I. T. ACT AS A TRADING LOSS. THE ASSESSEE ALSO FILED COPIES OF BA LANCE SHEET AND FINANCIAL STATEMENT OF M/S. PREMIER VINYL FLOORING LTD. TO SUBSTANTIATE TH AT OWING TO THE POOR FINANCIAL CONDITION OF THE COMPANY THE COMPANY FAILED TO HONO UR THE BILL OF EXCHANGE AND HENCE THE AMOUNT HAS ACTUALLY BECOME BAD. THE AO DID NOT ACCEPT THE ASSESSEES CONTENTION AND DISALLOWED THE CLAIM OF THE ASSESSEE BY STATING THE REASONS AT PAGES 2 AND 3 OF THE ASSESSMENT ORDER. IN APPEAL, THE LD. CIT(A) HELD T HAT THE LOSS CLAIMED BY THE ASSESSEE IS ALLOWABLE HAVING REGARD TO THE COMMERCIAL PRINCI PLES WITHIN THE MEANING OF SECTION 28 OF THE I. T. ACT, 1961 AND GAVE RELIEF OF RS.28, 08,135/- TO THE ASSESSEE. AGGRIEVED BY THE SAID ORDER, NOW THE REVENUE IS IN APPEAL BEFORE US. 2 3. AT THE TIME OF HEARING BEFORE US, THE LD. DR SUB MITTED THAT THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY SIMPLY ACCEPTING TH E SUBMISSIONS OF THE ASSESSEE MADE BEFORE HIM WITHOUT MAKING ANY FURTHER VERIFICATION OR INVESTIGATION AND ALSO NOT PROPERLY APPRECIATING THE FACTS OF THE CASE. 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE RELIED ON THE ORDER OF THE LD,. CIT(A) AND URGED BEFORE THE BENCH TO CONFIRM THE SA ME. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FORCE IN THE ARGUMENTS ADVANCED BY THE LD. DR THAT LD. CIT(A) HAS SIMPLY ACCEPTED THE SUBMISSIONS OF THE ASSESEE WITH OUT GIVING ANY COGENT REASONING FOR DOING THE SAME. HOWEVER, WE FEEL THAT THE ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO ESTABLISH HIS CLAIM OF WRITTEN OFF OF AN AMOUNT OF RS.28,08,135/- IN THE YEAR UNDER APPEAL. THE ASSESSEE WOULD BE FREE TO A DDUCE FRESH EVIDENCE IN SUPPORT OF SUCH CLAIM. THE MATTER IS, THEREFORE, RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 25. 6.2010 SD/- SD/- (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25TH JUNE, 2010 COPY TO : 1. DCIT, CIRCLE-4, KOLKATA. 2. SRI ADARSH KANORIA, 9, BRABOURNE ROAD, KOLKATA-1. 3. CIT(A), KOLKATA. 4. CIT, KOLKATA. 5. D.R., ITAT, KOLKATA. TRUE COPY BY ORDER DEPUTY REGISTRAR JD.(SR.P.S.) I.T.AT., KOLKATA