Virendra Kumar Agarwal HUF, CHENNAI V. ITO, CHENNAI

ITA 1545/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8188 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 24-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 06-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Keywords: Business income; Bad and doubtful debts
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

, B/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL B/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ I.T.A.NO1545 /MDS./2016 ( / ASSESSMENT YEAR :2011-12) MR.VIRENDRA KUMAR AGARWAL , 47,VENKATACHALA MUDALI STREET, CHENNAI-3. VS. ITO, BUSINESS WARD XII(4), CHENNAI. PAN AAAHB 2618 B ( / APPELLANT ) ( / RESPONDENT ) ! ' # / APPELLANT BY : MR.D.ANAND, ADVOCATE $% ! ' # / RESPONDENT BY : MR.SHIVA SRINIVAS,JCIT, D.R & ' ' ( ) / DATE OF HEARING : 30.11.2016 *+ ' ( ) /DATE OF PRONOUNCEMENT : 09.01.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-5, CHENNA I DATED 21.03.2016 PERTIANING TO ASSESSMENT YEAR 2011-12. ITA NO.1545 /MDS/2016 2 2. THE ONLY MAIN GROUND IN THIS APPEAL IS WITH REG ARD TO ALLOWABILITY OF BAD DEBT AT ` 7 LAKHS. 3. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE HA D CLAIMED BAD DEBTS OF ` 7 LAKHS, WHICH WAS LENT TO M/S.KAMALDEEP JEWELLERS IN THE COURSE OF BUSINESS OF MONEY LENDING. THIS BAD DEBT WAS WRITTEN OFF IN THE FINANCIAL YEAR 2004-05. THE AO DISALLOWED THE SAME OBSERVING THAT IT IS NOT INCIDENTAL TO THE BUSINESS OF THE AS SESSEE AND IT DOES NOT QUALIFY FOR DEDUCTION AS BAD DEBT IN TERMS OF SEC.3 6(1)(VII) R.W.S.36(2) OF THE ACT. AGGRIEVED, THE ASSESSEE CARRIED THE APP EAL BEFORE THE LD.CIT(A). ON APPEAL, LD.CIT(A) CONFIRMED THE ORDER OF LD. ASSESSING OFFICER. AGAINST THIS, THE ASSESSEE IS IN APPEAL BE FORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. BEFORE US, LD.A.R FILED A FINANCIAL STATEME NT FOR ASSESSMENT YEAR 2009-10 STATING THAT IN THAT ASSESSMENT YEAR A SSESSEE RECEIVED INTEREST OF 40,500/- AND OFFERED FOR TAXATION AS PA RT OF THE BUSINESS INCOME OF ASSESSEE. ONCE THE INCOME IS OFFERED FOR TAXATION IN ANY ASSESSMENT YEAR AND NON-RECOVERY OF THE PRINCIPEL A MOUNT AND WRITTEN OFF THAT SAME, THE ASSESSEE IS ENTITLED FOR DEDUCTION AS BAD ITA NO.1545 /MDS/2016 3 DEBTS U/S.36(1)(VII) R.W.S.36(2) OF THE ACT. ADMIT TEDLY, IN THIS CASE THE INCOME EARNED FROM THIS SOURCE I.E.DEBT IS OFFERED FOR TAXATION IN THE ASSESSMENT YEAR 2009-10 AS PER THE FINANCIAL STATE MENT FURNISHED BY THE ASSESSEE FOR THE YEAR ENDED ON 31.03.2009. SO, THE CONDITION LAID DOWN U/S.36(2) HAS BEEN FULFILLED AND THE AO IS NOT JUSTIFIED IN NON- GRANTING OF DEDUCTION OF WRITTEN OFF, WHICH IS THE BAD DEBT. IN OUR OPINION, THIS IS TO BE ALLOWED AS BAD DEBT AND ACCO RDINGLY, WE ALLOW THE GROUND TAKEN BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 09 TH JANUARY, 2017 AT CHENNAI. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 09 TH JANUARY, 2017 . K S SUNDARAM. , ' $(-. /.( / COPY TO: 1 . ! / APPELLANT 3. & 0( () / CIT(A) 5. .3 4 $(5 / DR 2. $% ! / RESPONDENT 4. & 0( / CIT 6. 4 6 7 ' / GF