Tata Sponge Iron Limited, Keonjhar V. DCIT, Sambalpur

ITA 131/CTK/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4378 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 27-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 13-04-2010
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: S K JENA
• Keywords: Rectification of order; Bad and doubtful debts
• Section: 143(3); 154

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 131/CTK/2010 (ASSESSMENT YEAR 2003 - 04) TATA SPONGE IRON LIMITED, P.O.JODA, DI ST. KEONJHAR, ORIS S A 758 034 PAN: AABCT 0230 D VERSUS DY.COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), SAMBALPUR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.K.JENA, AR FOR THE RESPONDENT SMT. PARAMITA TRIPATHY, DR ORDER SHRI K.S.S.PRASAD RAO, JUDI CIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) DT.9.11.2009 FOR THE ASSESSMENT YEAR 2003 - 04 IN THE CASE OF THE ASSESSEE. 2. THE SOLE ISSUE RAISED BY THE ASSESSEE IS THAT DES PITE CLEAR ORDER OF THE CIT(A) ALLOWING THE BAD DEBT CLAIM OF RS.2,94,34,178, THE ASSESSING OFFICER HAD NOT CONSIDERED THE SAME WHILE PASSING THE ORDER GIVING EFFECT TO THE ORDER PASSED U/S.251 BY THE LEARNED CIT(A). THE LEARNED CIT(A) IN THE IMPUGNED ORDE R INSTEAD OF EXAMINING THE WHOLE ISSUE, CONFIRMED THE RECTIFICATION ORDER OF THE ASSESSING OFFICER AND THUS ERRED IN NOT CONSIDERING THE CONTENTS OF PARA 12.3 OF HIS OWN ORDER DT.14.2.2008. 3. DURING THE COURSE OF HEARING THE LEARNED AR OF THE ASSESSEE HAS CONTENDED THAT WHILE PASSING THE ASSESSMENT ORDER U/S.143(3) DT.15.12.2005, THE ASSESSING OFFICER MADE DISALLOWANCE OF BED DEBT OF RS.2,94,34,178 CLAIMED BY THE ASSESSEE AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. ON APPEAL BY THE ASSESSEE, THE LEARNED CIT(A) VIDE HIS ORDER DT.14.2.2008 IN PA RA GRAPHS 10.02 TO 12.5 ON PAGES NO.14 TO 18 ALLOWED THE CLAIM OF BAD DEBT OF ITA NO.131/CTK/2010 2 RS.2,94,34,178. BUT WHILE GIVING EFFECT TO THE ORDER OF THE LEARNED CIT(A) DT.14.2.2008, THE ASSESSING OFFICER HAS NOT CONSIDERED THE REFUND ARISING OUT OF BAD DEBT ALLOWED BY THE LEARNED CIT(A). IN THE SAID ORDER, THE LEARNED CIT(A) HAS OBSERVED IN PARAGRAPH 12.5 - HOWEVER, THE APPELLANT HAS SUBMITTED IN A WRITTEN SUBMISSION DATED 25.2.2006 THAT THE A.O. HAS, IN THE MEANTIME, PAS SED AN ORDER UNDER SECTION 154 IN WHICH HE HAS WITHDRAWN THE ADDITION MADE FOR THE SECOND TIME. HENCE, NO FURTHER MODIFICATION IN THE QUANTUM OF INCOME DETERMINED IN THE ORDER PASSED UNDER SECTION 143(3) R.W. THE ORDER PASSED UNDER SECTION 154 IS REQUIRED TO BE MADE IN THIS REGARD . IT IS FURTHER SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT THE ASSESSEE WHILE COMPUTING THE INCOME TAXABLE FOR THE ASSESSMENT YEAR 2001 - 02 MADE A PROVISION FOR THE SAME AMOUNT WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT PROVISION IS NOT ALLOWABLE. AT THE SAME TIME, THE ASSESSING OFFICER HAS TREATED THE SAME AMOUNT AS BAD DEBT DISALLOWED. IN THAT WAY THERE IS DOUBLE ADDITION OF THE AMOUNT OF RS.2,94,34,178. WHEN THE ASSESSEE APPEALED AGAINST THE ORIGINAL A SSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSING OFFICER HAS PASSED AN ORDER U/S.154 DELETING THE ADDITION MADE BY HIM AS BAD DEBT CLAIMED OF RS.2,94,34,178. LATER ON THE LEARNED CIT(A) WHILE DISPOSING OF THE APPEAL FILED BY THE ASSESSEE HAS FOUND THAT THE DISALLOWANCE OF BAD DEBT BY THE ASSESSING OFFICER IS NOT CORRECT. WHILE GIVING EFFECT TO THE SAID ORDER OF THE LEARNED CIT(A), THE ASSESSING OFFICER HAS NOT CONSIDERED THE ASPECT OF DOUBLE ADDITION , ONCE MADE BY THE ASSESSEE ITSELF AS PROVI SION FOR BAD DEBT AND ANOTHER ADDITION MADE BY THE ASSESSING OFFICER DISALLOWING THE SAID PROVISION ON THE GROUND THAT THE PROVISION IS NOT ALLOWABLE UNDER LAW FOR DEDUCTION AND THE ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT(A) FOR CORRECTING THE MISTA KE APPARENT FROM THE ITA NO.131/CTK/2010 3 RECORD BY NECESSARY ORDERS. THE LEARNED CIT(A) HAS NOT AGREED WITH THE CONTENTION OF THE ASSESSEE AND HENCE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRI BUNAL SEEKING APPROPRIATE RELIEF. 4. CONTRARY TO THIS, THE LEARNED DR HAS VE HE MENTLY ARGUED CONTENTING THAT THERE IS NO QUESTION OF DOUBLE DISALLOWANCE/ADDITIONS MADE BY THE ASSESSING OFFICER. SO, THE CONTENTION OF THE ASSESSEE IS UNFOUNDED AND AS SUCH, THE APPEAL OF THE ASSESSEE BE REJECTED. 5. ON CAREFUL ANALYSIS OF THE OR DERS PASSED BY THE ASSESSING OFFICER AND THE CIT(A) IN TWO ROUNDS, IN THE LIGHT OF THE COMPUTATION OF INCOME FILED BY THE ASSESSEE ORIGINALLY FOR THE PERIOD UNDER CONSIDERATION, WE FIND IN THE COMPUTATION STATEMENT FOR THE ASSESSMENT YEAR 2001 - 02 FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, THE ASSESSEE HIMSELF ADDED BACK THE AMOUNT OF RS.2,94,34,178 UNDER THE HEAD PROVISIONS FOR DOUBTFUL DEBTS. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER DT.24.3.2004 IN PARAGRAPH 11 OF HIS ORDER HAS ADDED BACK THE VERY SAME AMOUNT OF RS.2,94,34,178. WHILE FILING RETURN FOR THE ASSESSMENT YEAR 2003 - 04 AND COMPUTING INCOME TAXABLE IN THE HANDS OF THE ASSESSEE, THE ASSESSEE HAS CLAIMED THE BAD DEBT. THE ASSESSING OFFICER HAS DISALLOWED RS.2,94,34,178 AND ADDED BACK THE SAME TO THE INCOME OF THE ASSESSEE. THEREAFTER THE ASSESSEE MOVED A PETITION U/S.1 54 BEFORE THE ASSESSING OFFICER REQUESTING FOR RECTIFICATION OF HIS ORDER FOR DELETING THE DOUBLE ADDITIONS OF THE SAME AMOUNT OF RS.2,94,34,178. WHILE PASSIN G THE ORDER DT.16.2.2008, THE ASSESSING OFFICER THOUGH HAS CONSIDERED THE AMOUNT OF RS.2,94,34,178 BUT HE HAS NOT CONSIDERED THE ASPECT OF REFUND TO THE ASSESSEE. THEREFORE, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND BEING UNSUCCESSFUL HAS FILED T HE PRESENT APPEAL BEFORE THE TRIBUNAL. THEREFORE, ITA NO.131/CTK/2010 4 APPARENTLY IT SEEMS THAT THERE IS DOUBLE ADDITION OF THE SAME AMOUNT OF RS.2,94,34,178 BUT WHILE GIVING EFFECT TO THE ORDER OF THE LEARNED CIT(A), THE ASSESSING OFFICER HAS NOT PROPERLY CONSIDERED THE GRIEV ANCE OF THE ASSESSEE IN THIS REGARD. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THIS IS A FIT CASE TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR ONCE AGAIN RECOMPUTE THE INCOME TAXABLE IN THE HANDS OF THE ASSESSEE BY TAKING INTO CONSIDERATION THE ASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2001 - 002 AS WELL AS OF 2003 - 04 AND THE CIT(A)S APPEAL ORDER FOR THE ASSESSMENT YEAR 2003 - 04 AND PASS A CONSEQUENTIAL ORDER AS PER LAW, OF COURSE GIVING OPPORTUNITY O F HEARING TO THE ASSESSEE BEFORE PASSING SUCH ORDER. WITH THIS DIRECTION, THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO CONSIDERATION FOR THIS LIMITED PURPOSE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICA L PURPOSES. PRONOUNCED IN OPEN COURT ON DT. 17.06.2011 S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 17.06.2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FOR WARDED TO : 1. THE APPELLANT: TATA SPONGE IRON LIMITED, P.O.JODA, DIST. KEONJHAR, ORIS S A 758 034 2. THE RESPONDENT: DY.COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), SAMBALPUR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.