The ITO, Ward-4, Bharuch V. M/s. M.N. Shroff, Ankleshwar

ITA 1525/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7746 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 14-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S CHAUDHARY
• Assessee Lawyers: KETAN H SHAH
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI T.K. SHARMA, JUDICIAL MEMBER AND D.C.AGRAWAL, ACCOUNTANT MEMBER) ITA.NO.1525/AHD/2009 [ASSTT.YEAR : 2003-2004] ITO, WARD-4 BHARUCH. VS. M/S.M.N.SHROFF OPP: BHAVNA FARM GIDC, ANKLESHWAR. REVENUE BY : SHRI D.S.CHAUDHARY ASSESSEE BY : SHRI KETAN H. SHAH O R D E R PER D.C.AGRAWAL, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-VI, BARODA DATED 03.02.2009, WHEREIN HE HAS DELETED THE ADDITION OF RS.51,33,088/- ON AC COUNT OF CLAIM OF BAD DEBTS. 2. THE AO DISALLOWED THE CLAIM ON THE GROUND THAT T HE ASSESSEE HAS WRITTEN OFF BAD DEBT WITHOUT SHOWING THAT THEY HAVE ACTUALL Y BECOME BAD. ACCORDING TO THE AO, IT IS OBLIGATORY ON THE PART OF THE ASSE SSEE TO PLACE DEMONSTRATIVE PROOF FOR ESTABLISHING THE DEBT AS BAD. THE LEARNE D CIT(A), ON THE OTHER HAND HELD THAT THE AO HAS HIMSELF GIVEN A FINDING THAT D EBTORS ARE NOT AVAILABLE AT THE GIVEN ADDRESS. HE HAD ASKED AO TO SUBMIT A REM AND REPORT. THE AO VIDE HIS REMAND REPORT DATED 3-11-2008 SUBMITTED THAT TH E SUMMONS WERE ISSUED TO THE OWNERS OF MARUTI TRADERS AND JAY GANESH PROTEIN S (DEBTORS) BUT THE SUMMONS COULD NOT BE SERVED ON THESE PARTIES, AS TH EY WERE NOT TRACEABLE. THE WARD INSPECTOR ALSO CARRIED OUT INQUIRIES. DURING THE VISIT TO SHED NO.142/2 AND 142/3, GIDC, BHARUCH, IT WAS FOUND THAT THE SHE DS WERE RENTED OUT TO THE OWNERS OF THESE TWO PARTIES, BUT THEY WERE NOT TRAC EABLE AND PRESENT OCCUPANTS OF THE SHEDS WERE NOT AWARE OF WHEREABOUTS OF THE O WNERS OF THE TWO CONCERNS. THE LEARNED CIT(A) ALSO POINTED OUT THAT THE ASSESS EES HAVE FILED CASE UNDER NEGOTIABLE INSTRUMENT ACT IN MARCH, 2003. THE CLAI M WAS ALSO MADE FOR BAD DEBT IN THE ASSESSMENT YEAR 2004-2005 WHICH WAS NOT ALLOWED BY THE AO ON ITA.NO.1525/AHD/2009 -2- THE GROUND THAT DEBTS WERE WRITTEN OFF IN A.Y.2003- 2004. THE LEARNED AR HAS POINTED OUT THAT THIS ORDER FOR A.Y.2004-2005 IS CO NFIRMED BY THE LEARNED CIT(A). THUS, LEARNED CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE FOR A.Y.2003- 2004 BOTH ON THE GROUND THAT THEY HAVE WRITTEN OFF IN THIS ASSESSMENT YEAR AS WELL AS DEBTORS WERE NOT TRACEABLE. 3. WE HAVE HEARD LEARNED DR AND LEARNED AR AND PERU SED MATERIAL ON RECORD. IN OUR CONSIDERED VIEW, THERE IS NO CASE F OR INTERFERENCE IN THE ORDER OF THE LEARNED CIT(A). IT IS BECAUSE THE DEBTS HAVE B EEN WRITTEN OFF IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN QU ESTION, AND ALSO THE ASSESSEE HAS TAKEN REASONABLE STEPS FOR RECOVERY OF MONEY BY FILING THE CASE UNDER NEGOTIABLE INSTRUMENT ACT. THE AO HAS ALSO CARRIED OUT INQUIRIES AND SUBMITTED REMAND REPORT TO THE LEARNED CIT(A) THAT THE DEBTORS ARE NOT TRACEABLE. ON THE BASIS OF THESE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE CLAIM OF THE ASSESSEE IS JUSTIFIED, AS A RESULT ORD ER OF THE LEARNED CIT(A) IS CONFIRMED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 24 TH JULY, 2009. SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (D.C. AGRAWAL) ACCOUNTANT MEMBER PLACE : AHMEDABAD DATE : 24-07-2009 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD