The DCIT, Circle-5, Ahmedabad V. Niagra Distributers Ltd., Ahmedabad

ITA 1187/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76777 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Keywords: Recovery proceedings; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER DY. CIT, CIRLCE-5, AHMEDABAD (APPELLANT) VS NIAGRA DISTRIBUTORS, 25, HIRABHAI MARKET, KANKARI, AHMEDABAD PAN: AAACN5178R (RESPONDENT) REVENUE BY: SRI O.P. VAISHNAV, CIT-D.R . ASSESSEE BY: NONE DATE OF HEARING : 26-05-2014 DATE OF PRONOUNCEMENT : 30-05-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XI AHMEDABAD DATED 24-02-2011. ITA NO. 1187/AHD/2011 ASSESSMENT YEAR 2005-06 I.T.A NO. 1187/AHD/2011 A.Y. 2005-06 PAGE NO DCIT VS. NIAGRA DISTRIBUTORS LTD 2 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE DESPITE THE FACT THAT NOTICE FOR TODAYS HEARING WA S SENT TO HIM. NO APPLICATION FOR ADJOURNMENT IS ON RECORD. SO, WE P ROCEEDED TO DECIDE THE APPEAL AFTER HEARING LD. DR. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME ON 28-10-2005 SHOWING TOTAL INCOME AT RS. NIL. THE AS SESSEE HAS SHOWN INCOME FROM BUSINESS OR PROFESSION AS A LOSS OF RS. 10,81,47,150/-. AO ASSESSED THE INCOME OF ASSESSEE AT RS. 34,93,470/- DISALLOWING THE CLAIM FOR BAD DEBT TO THE EXTENT OF RS. 10,46,1,180/- BY OBSERVING AS UNDER:- 4.7. FROM THE ABOVE DISCUSSION, IT IS EVIDENT THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS EVEN ON SLIGHTEST MANNER, BY NOT ABLE TO PROVIDE THE REQUISITE DETAILS AND INFORMATION, AS ASKED FOR. T HE ASSESSEE ALSO FAILED TO PROVIDE THE BASIC AND PRIMARY DETAILS/RECORDS TO ESTABLISH THE CORRECT NATURE OF SUCH DEBTS AND ALSO WHETHER THE SAME HAD BEEN OFFERED FOR TAXATION IN THE PAST, AS CLAIMED. ON BEING ASKED, T HE ASSESSEE HAS SIMPLY STATED THAT IT HAD SOLD GOODS TO THE VARIOUS PARTIE S IN PAST YEARS AND THE AMOUNTS REMAINED OUTSTANDING TILL THE PREVIOUS YEAR WHICH HAVE BEEN WRITTEN OFF - COPIES OF ACCOUNTS FOR ALL THE YEARS HAVE BEEN FURNISHED. THE ASSESSEE HOWEVER HAS NOT FURNISHED ANY FURTHER REAS ONS/JUSTIFICATION ON THIS ACCOUNT AND THE DETAILS OF EFFORTS MADE BY IT FOR REALIZATION OF DEBTS. IN ABSENCE OF SUCH VITAL INFORMATION, IT IS HELD THAT THERE WAS NO APPARENT REASON FOR WRITING OFF SUCH DEBTS, THEREFORE, DEDUC TION U/S 36(1)(VII) IS NOT ADMISSIBLE. 4.11 IN THE INSTANT CASE, ON THE FACE OF THE FACTS PLACED AT THE TIME OF ASSESSMENT, (EXCEPT THE UNILATERAL ACT OF THE ASSES SEE TO WRITE OFF THE DEBT AS BAD DEBT IN THE BOOKS OF ACCOUNTS FOR THE PREVIO US YEAR RELEVANT TO THE ASSESSMENT YEAR) THE ASSESSEE HAS NOT MADE OUT ANY CASE WITH REGARD TO THE DEBTS AS IRRECOVERABLE. THE ASSESSEE COULD NOT PRODUCE ADEQUATE EVIDENCE THAT THE DEBT COULD NOT BE RECOVERED ON AC COUNT OF PRECARIOUS FINANCIAL POSITION OR OTHERWISE IT HAD NOT CLAIMED AS SUCH. IT IS SEEN THAT NO RECOVERY PROCEEDINGS ARE GOING ON AGAINST CERTAI N DEBTORS AND THE FACT REGARDING PAYMENT CAPACITY OF THE DEBTORS HAVE NOT BEEN BROUGHT ON RECORD. I.T.A NO. 1187/AHD/2011 A.Y. 2005-06 PAGE NO DCIT VS. NIAGRA DISTRIBUTORS LTD 3 IN RESPECT OF AOS CONTENTION THAT ASSESSEE HAS FAI LED TO ESTABLISH THE CORRECT NATURE OF SUCH DEBTS AND ALSO WHETHER THE S AME HAD BEEN OFFERED FOR TAXATION IN THE PAST, ASSESSEE FILED ADDITIONAL EVIDENCE BEFORE LD. CIT(A) WHICH WAS SENT BACK BY THE LD. CIT(A) TO AO FOR HIS COMMENTS. A.OS REMAND REPORT WAS AS UNDER:- 2. THE ASSESSEE IN ITS LETTER DATED 15-05-2010, HAS CONTENDED THAT COPIES OF ACCOUNTS OF EARLIER YEARS WERE FURNISHED BY IT AS I S EVIDENT FROM PARA-4.7 OF THE ASSESSMENT ORDER. THE CONTENTION OF THE ASSESSE E IS FACTUALLY INCORRECT. THE A.O. IN PARA-4.7 HAS ONLY REPRODUCED THE ASSESS EE'S VERSION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THERE IS NO CONTRADICTION ABOUT NON-FURNISHING OF DETAILS. 3. THE DETAILS REGARDING NAME AND ADDRESS OF THE PA RTIES, CONFIRMED COPIES OF THEIR ACCOUNTS FOR THE EARLIER YEARS ARE ADDITIONAL EVIDENCE WHICH WERE NOT FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. AS THE ASSESSEE ITSELF HAS AFFIRMED THAT SUCH DETAILS WERE SOUGHT BY THE A .O ON 14-11-2007, IT IS CLEAR THAT HE HAD SUFFICIENT TIME TO FURNISH CONFIRMATION OF THE PARTIES. IT IS THEREFORE, CLEAR THAT IT WAS NOT PREVENTED BY SUFFICIENT CAUSE TO FURNISH SUCH DETAILS. THEREFORE, THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE MAY NOT BE ADMITTED. . 4, ON MERITS OF THE CASE ALSO, IT MAY BE SEEN THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF CORRESPONDENCES MADE BY IT WITH THE DEBTORS AS MENTIONED IN PARA 4.6 OF THE ASSESSMENT ORDER. THE ASSESSEE HAS ALSO NOT FURNISHED EVIDENCES TO PROVE THAT SUCH DEBTS WERE O FFERED FOR TAXATION IN THE RELEVANT ASSESSMENT YEAR. NO DOCUMENTARY EVIDENCE T O SUBSTANTIATE THE FACT THAT SUFFICIENT EFFORTS FOR REALIZATION OF SUCH DEB TS WERE MADE. ON PERUSAL OF THE DETAILS, FURNISHED IN THE BOX FILE, IT IS SEEN THAT EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS NOT FURNISH ED CONFIRMED COPIES OF ACCOUNTS IN RESPECT OF THE PARTIES SHOWN AT SR. NO, 3, 4, 6, 11, 12, 17, 19, 20, 21, & ,23 OF ANNEXURE-A TO THE PAPER BOOK. IN VIEW OF THESE FACTS, IT IS REQUESTED THAT ASSESSMENT ORDER MAY KINDLY BE CONFI RMED.' HOWEVER LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENC E AND DECIDED THE ISSUE IN FAVOUR OF ASSESSEE WITHOUT VERIFYING THE S AME. WE ARE THEREFORE OF THE VIEW THAT MATTER BE RESTORED BACK TO FILE OF AO TO DECIDE THE ISSUE AFRESH AFTER TAKING INTO CONSIDERATION THE ADDITION AL EVIDENCE SUBMITTED BY ASESSEE BEFORE LD. CIT(A). WE HOLD ACCORDINGLY. I.T.A NO. 1187/AHD/2011 A.Y. 2005-06 PAGE NO DCIT VS. NIAGRA DISTRIBUTORS LTD 4 4. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 30/05/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,