The ACIT, Circle-7, Ahmedabad V. Vulcan Gears, Ahmedabad

ITA 1052/AHD/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6866 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 08-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KURAIR
• Assessee Lawyers: MAYUR V SHERASIYA

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD .., .. , ! BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.K.GARODIA, HONBLE ACCOUNTANT MEMBER ITA NO.1052/AHD/2011 & C.O. NO.127/AHD/2011 (ARISING OUT ITA NO.64/AHD/2008) ASSESSMENT YEAR: 2007-08 ACIT, CIRCLE-7, 2 ND FLOOR NAVJIVAN TRUST BUILDINGS, OFF. ASHRAM ROAD, AHMEDABAD VLUCAN GEARS 313, ADVAIT, NR. SANDESH PRESS, VASTRAPUR, AHMEDABAD V/S. V/S. VULCAN GEARS 313, ADVAIT, NR. SANDESH PRESS, VASTRAPUR, AHMEDABAD PAN NO.AADFV8692A ACIT, CIRCLE-7, AHMEDABAD (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI MAYUR V SHERASIYA, AR REVENUE BY:- SHRI JAMES KURAIR, DR DATE OF HEARING 02-12-2011 DATE OF PRONOUNCEMENT 09-12-2011 ' ' ' ' /O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER:- THIS APPEAL IS FILED BY REVENUE AND CROSS OBJECTIO N (CO) IS FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST THE ORDER O F LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD DATED 06-01-201 1 FOR THE ASSESSMENT YEAR 2007-08. FIRST WE DECIDE THE APPEAL OF REVENUE IN ITA NO.105 2/AHD/2011. ITA NO.1052/AHD/2011 & CO.127/AHD/2011 A.Y 2007- 08 ACIT, CIR-7 ABD V. VULCAN GEARS PAGE 2 2. THE GROUND RAISED BY REVENUE IS AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.15,80,893/ - BEING EXPENSES RELATING TO BAD-DEBT, TREATED AS BAD-DEBT. 3. LD. DR OF THE REVENUE SUPPORTED THE ASSESSMENT O RDER WHEREAS LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A ). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. THIS ISSUE HAS BEEN DECIDED BY LD. CIT(A) BY FOLLOWING THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF TRF LIMITED V. CIT (2010) AS REPORTED IN 323 ITR 397 (SC). THE RELEVANT PART OF THE ORDER OF LD. CIT(A) IS IN PARA-2.3 , WHICH IS REPRODUCED BELOW:- 2.3 DECISION: I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE ABO VE SUBMISSION FILED BY THE AR OF THE APPELLANT. IT IS NOTICED THAT THE MAIN CONTENTION OF THE A.O FOR DISALLOWING BAD DEBT OF R S.15,80,893/- IS THAT APPELLANT HAS NOT FURNISHED SUFFICIENT MATERIAL TO SUPPORT HIS CLAIM. ENTIRE CONTROVERSY RELATING TO ALLOWABILITY OF BAD DEBT ON WRITE OFF IN PROFIT & LOSS ACCOUNT IS RESOLVED BY DECISION OF HO NBLE SUPREME COURT IN THE CASE OF TR LTD. VS. CIT 323 ITR 397 WHEREIN IT HAS BEEN HELD THAT AFTER THE AMENDMENT TO SECTION 36(1)(VII) OF T HE INCOME-TAX ACT, 1961 WITH EFFECT FROM 1 ST APRIL, 1989, IN ORDER TO OBTAIN DEDUCTION IN RELATION TO BAD DEBT, IT IS NOT NECESSARY FOR THE A SSESSEE TO ESTABLISH THE DEBT, IN FACT, HAS BECOME IRRECOVERABLE AND IT IS E NOUGH IF BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE SUPR EME COURT, DISALLOWANCE MADE BY ASSESSING OFFICER ID DELETED. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. THE APPELLANT GETS REL IEF OF RS.15,80,893/-. 5. SINCE, IT IS NOT IN DISPUTE THAT DEBT IN QUESTIO N WERE ACTUALLY WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNT OF ASSESSEE, WE FEE L THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE JUDGMENT OF HO NBLE APEX COURT IN THE CASE OF TRF LIMITED (SUPRA) AND HENCE NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. WE ORDER ACCORDI NGLY. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ITA NO.1052/AHD/2011 & CO.127/AHD/2011 A.Y 2007- 08 ACIT, CIR-7 ABD V. VULCAN GEARS PAGE 3 NOW WE HAVE TAKEN THE CO OF ASSESSEE. 7. WE FIND THAT CO IS MERELY IN SUPPORT OF THE ORDE R OF LD. CIT(A) AND HENCE, THE SAME IS NOT MAINTAINABLE AND IS LIABLE T O BE DISMISSED. MOREOVER, WE HAVE ALREADY DECIDED THE ISSUE IN FAVOUR OF ASSE SSEE BY REJECTING THE APPEAL OF REVENUE AND HENCE, FOR THIS REASON ALSO, THE CO FILED BY ASSESSEE HAS BECOME INFRUCTUOUS. WE DISMISS THE SAME. 8. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DISMI SSED AND THE CO OF ASSESSEE IS ALSO DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON 09/12/2011 # ' $ %& '() 09 / 12 / 2011 !+ , $ - . SD/- SD/- ( .. ) ( .. ) (D.K.TYAGI) (A.K. GARODIA) ( ) ( ! ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, *DKP '()- 09/12/2011 . ' ' ' ' $ $$ $ 012 012 012 012 32&1 32&1 32&1 32&1 / COPY OF ORDER FORWARDED TO:- 1. 56 / APPELLANT 2. 056 / RESPONDENT 3. (( 1 +9 / CONCERNED CIT 4. +9- / CIT (A) 5. 2<= 01' , , / DR, ITAT, AHMEDABAD 6. ? @# / GUARD FILE. BY ORDER/ ' , /TRUE COPY/ A/ (B , .