M/s. SPL Healthcare India(P) Ltd., Ahmedabad V. The Dy,CIT.,Mehsana Circle, Mehsana

ITA 1209/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0069 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 19-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KETAN H SHAH
• Keywords: Bad and doubtful debts
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER) ITA.NO.1209 /AHD/2010 [ASSTT. YEAR : 2007-2008] M/S.SPL HEALTHCARE INDIA P. LTD. C/O.KETAN H. SHAH, ADVOCATE 903, SAPPHIRE COMPLEX NR.CARGO MOTORS, C.G. ROAD AHMEDABAD. PAN NO.AAICS 4327 D VS. DCIT, MEHSANA CIR. MEHSANA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KETAN H. SHAH REVENUE BY : SHRI ANIL KUMAR O R D E R PER G.D. AGRAW AL, VICE-PRESIDENT: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), GANDHINAG AR DATED 29.01.2010 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SEC TION 143(3) OF THE INCOME TAX ACT, 1961. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE READS AS UNDER: 1. IN NOT APPRECIATING THE FACTS AND/OR HEREBY MA KING DISALLOWANCE IN REFERENCE TO BAD DEBTS WRITTEN OFF IN THE BOOKS OF ACCOUNTS AMOUNTING TO RS.1,38,223/-. IT IS PRAYED THAT, AS PER AMENDED L AW FROM 01.04.1989, THE ONLY REQUIREMENT IS TO WRITE OFF THE BAD DEBT IN DISPUTE AND AS SUCH, BOTH THE LOWER AUTHORITIES HAVE TOTALLY ERRED IN NOT ALLOWING BAD DEBTS AS WRITTEN OFF IN THE BOOKS OF ACCOUNTS. THE AO MAY PLEASE BE DIRECTED TO DELE TE THE ADDITION IN REFERENCE TO BAD DEBTS. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITA.NO.1209 /AHD/2010 2 HONBLE APEX COURT IN THE CASE OF T.R.F. LIMITED V S. CIT, 323 ITR 397 (SC) WHEREIN THEIR LORDSHIPS HELD AS UNDER: THIS POSITION IN LAW IS WELL-SETTLED. AFTER 1 ST APRIL, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS B ECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACC OUNTS OF THE ASSESSEE. FROM THE ABOVE, IT IS EVIDENT THAT THE HONBLE APEX COURT HAS HELD THAT AFTER 1ST APRIL, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTAB LISH THAT THE DEBT HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRI TTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. IT IS NOT IN DISPUTE THAT THE ASS ESSEE HAS WRITTEN OFF THE DEBT IN ITS BOOKS OF ACCOUNTS. THEREFORE, IN OUR OPINION, THE DISALL OWANCE OF CLAIM OF BAD DEBTS, ON THE GROUND THAT THE ASSESSEE COULD NOT ESTABLISH WHETHE R THE DEBT HAS BECOME BAD OR NOT IS NOT TENABLE. IN VIEW OF THE ABOVE, WE RESPECTFULLY FOL LOWING THE ABOVE DECISION OF THE HONBLE APEX COURT IN THE CASE OF T.R.F. LIMITED DI RECT THE AO TO ALLOW THE ASSESSEES CLAIM OF BAD DEBT. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 20 TH AUGUST, 2010. SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 20-08-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD