Sarash Worldwide Exports (P) Ltd., CHENNAI V. ITO, CHENNAI

ITA 1146/CHNY/2017

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9184 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-03-2018
• Assessment Year: 2004-2005
• Appeal Filed On: 08-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business expenditure; Bad and doubtful debts
• Section: 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN , ACCOUNTANT MEMBER ./ ITA NO. 1146 /CHNY/ 201 7 / ASSESSMENT YEAR: 2004 - 05 M/S. SARASH WORLDWIDE EXPORTS PRIVATE LIMITED, NO.8, DR. B.N. ROAD, (NORTH BOAG ROAD), T. NAGAR, C HENNAI 600 017. [PAN: AAECS 412 9 B ] VS. THE INCOME TAX OFFICER, COMPANY CIRCLE VI(1), CHENNAI ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : M R . KAUSHIK. M , ADV OCATE /RESPONDENT BY : M R. AR.V.SREENIVASAN, JCIT / DATE OF HEARING : 18 . 1 2 .2019 / DATE OF PRONOUNCEMENT : 18 .12 .2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : TH IS IS AN APPEAL FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 15 , CHENNAI IN APPEAL NO. I.T.A. NO . 137/CIT(A) - 15/13 - 14 DATED 17.02.2016 FOR THE ASSESSMENT YEAR 20 04 - 05 . 2. MR. KAUSHIK. M , ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND MR. AR.V. SREENIVASAN, JCIT REPRE SENTED ON BEHALF OF THE R EVENUE . ITA NO .1146 CHN Y / 201 7 : - 2 - : 3. IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE APPEAL OF THE ASSESSEE WAS DELAYED BY 386 DAYS FOR WHICH THE ASSESSEE HAS FILED AN AFFIDAVIT, WHEREIN IT IS SUBMITTED THAT THOUGH THE PAPERS WERE HANDED OVER TO THE ASSESSEES CHARTERED ACCOUNTANTS, HOWEVER IN THE CHARTERED ACCOUNTANTS OFFICE, THE SENIOR PARTNER THEREIN HAD NOT BEEN INTIMATED AND THE APPEAL W AS LOST TRAC K OFF. SUBSEQUENTLY, WHEN THE ASSESSEE HAD SOUGHT THE ISSUE WI TH THE CHARTERED ACCOUNTANT, THE PAPERS WERE TRACED AND THE APPEAL WAS FILED BELATEDLY WITH 386 DAYS OF DELAY IN FILING OF THE APPEAL. IT WAS A SUBMISSION THAT THE DELAY NOT INTENTIONAL AND NON - CONDONATION OF THE DELAY WOULD CAUSE SUBSTANTIAL LOSS TO THE ASSESSEE. 4. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OPPOSED THE CONDONATION OF DELAY. 5 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 6. THE ASSE SSEE HAS FILED AN AFFIDAVIT, WHEREIN THE FAC TS HAVE BEEN BROUGHT OUT FOR THE REASONS FOR THE DELAY IN FILING THE APPEAL. THE AFFIDAVIT HAS NOT BEEN FOUND TO BE FALSE. CONSEQUENTLY, THE DELAY OF 386 DAYS IN FILING THE APPEAL IS CONDONED AND THE APPEAL IS ADJUDICATED ON MERITS. IN THE ASSESSEES AP PEAL IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE HAD CHALLENGED THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.10.00 LAKHS PAID TO TAI PENTAGON INTERNATIONAL AS ALSO AN AMOUNT OF RS.1,85,872/ - BEING AN AMOUNT GIVEN TO ITA NO .1146 CHN Y / 201 7 : - 3 - : SHRI. SIVABALANATHAN OF EURO IMPEX , BOTH OF WHICH HAD BEEN CLAIMED AS A BAD DEBT. IT WAS A SUBMISSION THAT IN RESPECT OF THE AMOUNT OF RS.10.00 LAKHS PAID TO TAI PENTAGON INTERNATIONAL, IT WAS A SUBMISSION THAT THE SAID CONCERN WAS BASED A T BANGALORE AND WAS HEADED BY A FOREIGN NATIONAL BY THE NAME OF MR. GENE CHOU. THE SAID COMPANY WAS TO IDENTIFY THE QUARRIES FOR SUPPLY OF GRANITE BLOCKS OF WHICH QUALITY THAT WAS APPROVED BY THEIR PRINCIPAL BUYERS AND THE AMOUNT OF RS.10.00 LAKHS WAS PAI D ON 04.10.2002 AS ADVANCE TO BE ADJUSTED AGAINST THE COMMISSION THAT WOULD BECOME PAYABLE ON RECEIPT OF LETTERS O F CREDITS FROM THEIR PRINCIPALS. IT WAS A SUBMISSION THAT THE ASSESSEE LATER NOTICED THAT THE SAID COMPANY HAD ADOPTED T HE SAID D UBIOUS PRACT ICE EVEN WITH OTHERS AND CONSEQUENTLY THE SAID AMOUNT HAD BEEN WRITTEN OFF ON 30.03.2004 AS BAD DEBTS. IN RESPECT OF THE AMOU NT PAID TO SHRI. SIVABALANATHAN, IT WAS SUBMITTED THAT THESE WERE AMOUNTS PAID FOR THE PURCHASE OF KUNNAM BLACK GRANITE ROUGH BLOC KS OF 2.650 CBM WHICH WAS MARKED BY THE ASSESSEE DURING AUGUST 2002 . THE SAME WAS NOT SUPPLIED DESPITE REPEATED REQUESTS AND CONSEQUENTLY THE SAME WAS ALSO WRITTEN OFF AS BAD DEBTS. IT WAS A SUBMISSION THAT THE ASSESSING OFFICER DISALLOWED THE SAID TWO A MOUNTS ON THE GROUND THAT THE SAID DEBTS WERE NOT TAKEN INTO ACCOUNT WHILE COMPUTING THE INCOME OF THE ASSESSEE EITHER DURING THE RELEVANT ASSESSMENT YEAR OR IN ANY PREVIOUS YEARS. IT WAS A SUBMISSION THAT THE LEARNED CIT(A) FOR THE SAME REASON HAD CONFIR MED THE DISALLOWANCE. IT WAS A SUBMISSION THAT THE TWO AMOUNTS WERE IN FACT BUSINESS ITA NO .1146 CHN Y / 201 7 : - 4 - : TRANSACTIONS AND WERE BUSINESS EXPENDITURES. IT WAS A SUBMISSION THAT THE SAID AMOUNTS WAS LIABLE TO BE ALLOWED. 7. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATIVE SU BMITTED THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE EITHER OF THE TRANSACTIONS AND NO EVIDENCE WHATSOEVER HAS BEEN PRODUCED BEFORE EITHER OF THE LOWER AUTHORITIES. IT WAS A FURTHER SUBMISSION THAT THE ARGUMENTS OF THE TRADE ADVANCES WAS A NEW ARGUMENT AN D IT WAS NEVER PUT BEFORE THE ASSESSING OFFICER NOR BEFORE THE LEARNED CIT(A). IT WAS ALSO A SUBMISSION THAT NO EVIDENCES HAS BEEN PRODUCED BEFORE THE TRIBUNAL ALSO TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. 9. ADMITTEDLY, IN RESPECT OF BOTH THE TRANSACTIONS, THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT THE AMOUNTS HAVE BEEN OFFERED AS INCOME IN ANY OF THE EARLIER YEARS OR FOR THE RELEVANT ASSESSMENT YEAR TO CLAIM T HE BAD DEBT. IN THE CIRCUMSTANCES, THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LEARNED CIT(A) ON THE SAID GROUND STANDS SUSTAINED. IN REGARD TO THE ARGUMENT THAT THESE WERE BUSINESS TRANSACTIONS, ADMITTEDLY, NO EVIDENCE HAS BEEN PRODUCED BEFORE ANY OF THE AUTHORITIES BELOW NOR BEFORE US. EVEN OTHERWISE, THE AMOUNT OF RS.10.00 LAKHS H AD BEEN PAID ON 04.10.2002 RELEVANT TO THE ASSESSMENT YEAR 2003 - 04, SO ALSO THE AMOUNT OF RS.1,85,872/ - PAID TO SHRI SIVABALANATHAN IN AUGUST 2 002. THE ASSESSMENT ITA NO .1146 CHN Y / 201 7 : - 5 - : YEAR UNDER APPEAL IS 2004 - 05. THESE TRANSACTIONS DO NOT RELATE TO THE ASSESSMENT YEAR UNDER APPEAL. IN THE CIRCUMSTANCES, THE ARGUMENT OF THE ASSESSEE THAT THESE ARE BUSINE SS EXPENSES LIABLE TO BE ALLOWED IS ALSO REJECTED. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER , 2019 IN CHENNAI. S D/ - ( . ) ( S. JAYARAMAN ) /ACCOUNTANT MEMBER / CHENNAI, / DATED: 18 TH DECEMBER , 2 019 . IA, SR. PS SD/ - ( ) (GEORGE MA THAN) /JUDICIAL MEMBER / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF