Datatech Computers Pvt.Ltd, Ahmedabad V. The Dy.CIT.,(OSD)Range-1, Ahmedabad

ITA 1025/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76740 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 07-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL SRDR
• Keywords: Bad and doubtful debts

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.1025/AHD/2011 [ASSTT.YEAR : 2007-2008] DATATECH COMPUTERS P. LTD. 604, SAMRUDDHI COMPLEX OPP: SAKAR-III NAVJEEVAN, AHMEDABAD. PAN : AAACB 6658 E /VS. DCIT (OSD), RANGE-1 AHMEDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI SAKAR SHARMA + 2 3 )/ REVENUE BY : SHRI P.L. KUREEL, SR.DR 5 2 &(*/ DATE OF HEARING : 9 TH MAY, 2014 678 2 &(*/ DATE OF PRONOUNCEMENT : 06-06-2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-2008 IS DIRECTED AGAINST T HE ORDER OF THE CIT(A). 2. THE GROUND NO. OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 1. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN NOT DEDUCTION OF BAD DEBTS/BUSINESS LOSS CLAIMED OF RS.2,38,287/-. ITA NO.1025/AHD/2011 -2- 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS WRITTEN OFF THE AMOUNT IN QUESTION AND THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HONBLE APEX COUR T IN THE CASE OF T.R.F. LTD. VS. CIT, 323 ITR 397 (SC). THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE COULD NOT FILE NECESSARY DETAILS AND EVIDENCE TO SHOW THAT THE DEB T HAS ACTUALLY BECAME BAD AND THAT THE AMOUNT CLAIMED AS BAD DEBT WAS OFF ERED FOR TAXATION IN EARLIER YEARS. HE RELIED ON THE ORDERS OF THE AO A ND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE FACT TH AT THE ASSESSEE HAS WRITTEN OFF THE AMOUNT IN QUESTION IS NOT IN DISPUT E. THE ASSESSEE HAS EXPLAINED IN HIS WRITTEN SUBMISSIONS FILED BEFORE T HE CIT(A) THAT THE ASSESSEE ENGAGED IN THE SALE AND SERVICING OF COMPU TERS AND RELATED ACTIVITIES WAS RAISING BILLS TO ITS CUSTOMERS. MANY OF ITS CUSTOMERS DEDUCTED CERTAIN AMOUNT FROM THE BILLS ON ACCOUNT O F VARIOUS REASONS SUCH AS RATE DIFFERENCE, LACK OF PROPER SERVICING I.E. U PTO THE SATISFACTION OF THE CUSTOMERS. THIS AMOUNT BEING NOT REALIZED/REALIZAB LE WAS DEBITED TO THE RATE DIFFERENCE AMOUNT. WE FIND THAT THERE IS NO MATERIAL ON RECORD TO DOUBT THE GENUINENESS OF THE CLAIM OF THE ASSESSEE. THE RATIO OF DECISION OF THE HONBLE APEX COURT IN THE CASE OF TRF LTD. ( SUPRA) IS APPLICABLE TO THE CASE OF THE ASSESSEE. ACCORDINGLY, THE ISSUE I S DECIDED IN FAVOUR OF THE ASSESSEE AND THE GROUND NO.1 OF THE ASESSEE IS ALLO WED. 5. THE GROUND NO.2 OF THE ASSESSEE IS AS UNDER: 2. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN NOT ALLOWING DEDUCTION OF INTEREST AMOUNTING TO RS.6000/- ITA NO.1025/AHD/2011 -3- 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS MADE SOME ADVANCE PAYMENTS TO THE PARTIES FOR MAKIN G PURCHASES, AND THEREFORE, IT WAS A BUSINESS ADVANCE ON WHICH NO IN TEREST WAS CHARGEABLE. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO. WE HAVE CONSIDERED RIVAL SUBMISSIONS. SINCE THE ASSESSEE HAS ADVANCED THE AMOUNT TO THIRD PARTY FOR MAKING PURCHASES IN THE NORMAL COURSE OF ITS BUSINESS, IT WAS A BUSINESS ADVANCE ON WHICH NO INTEREST WAS CHARGEABL E, AND THEREFORE, DISALLOWANCE OF INTEREST BY THE AO THAT THE ADVANCE WAS OUT OF BORROWED CAPITAL IS NOT SUSTAINABLE. ACCORDINGLY, THE GROUN D NO.2 OF THE ASSESSE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD