ITO-4(1)(2), MUMBAI V. IMPETUS WEALTH MANAGEMENT PVT.LTD., MUMBAI

ITA 1548/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3735 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2008-2009
• Appeal Filed On: 05-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINHA
• Assessee Lawyers: DR K SHIVRAM
• Keywords: Bad and doubtful debts

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND N.K.BILLAIYA (AM) . . , . ! . '#$, !& ! ' ./I.T.A. NO.1548/M/2012 ( ) / ASSESSMENT YEAR:2008-09) ITO 4(1)(2), 6 TH FLOOR, 636, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. / VS. IMPETUS WEALTH MANAGEMENT PVT LTD., 11, YASHODHAM COMPLEX, FILM CITY ROAD, GOREGAON (E), MUMBAI. * !& ./ +, ./PAN/GIR NO. : AAACS 5662 F ( *- / APPELLANT) .. ( ./*- / RESPONDENT) *- 0 ! / APPELLANT BY : SHRI D.K.SINHA ./*- 1 0 ! /RESPONDENT BY : DR. K.SHIVRAM 1 2& / DATE OF HEARING : 8.5.2013 34) 1 2& /DATE OF PRONOUNCEMENT : 8.5.2013 !5 / O R D E R PER B.R.MITTAL, JM: THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMEN T YEAR 2008-09 AGAINST ORDER DATED 5.12.2011 OF LD CIT(A) -8, MUMBAI ON THE FOL LOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD CIT(A) HAS ERRED IN DISALLOWING AN AMOUNT OF RS.25,91,993/- ON ACCOUNT OF BAD DEBTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE IMPUGNED ORDER OF LD CIT(A) IS CONTRARY TO LAW TO BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS A SU B-BROKER AND ENGAGED IN THE BUSINESS OF SUB-BROKING AND FINANCIAL AND INVESTMEN T CONSULTANT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT ASSESSEE HAS CLAIMED AN EXPENSES OF RS.25,91,993/- UNDER THE HEAD BAD DEBT WRITTEN OFF. IN RESPONSE TO I.T.A. NO.1548/M/2012 ASSESSMENT YEAR:2008-09 2 ASSESSING OFFICERS QUERY AS TO HOW THE BAD DEBT HA S BEEN WRITTEN OFF, IT WAS CONTENDED THAT ASSESSEE HAD MADE ALL POSSIBLE EFFORTS TO RECO VER THE DEBTS, TOOK LEGAL ACTION/FILED COURT CASES; DEBTS HAD ARISEN IN THE REGULAR COURSE OF BUSINESS CARRIED OUT AND ARE INCIDENTAL TO THEIR BUSINESS AND SAME ARE ALLOWABLE U/S.36(1)(VII) R.W.S 36(2) OF THE ACT. THE AO DID NOT ACCEPT ABOVE CONTENTIONS OF THE ASSE SSEE AND DISALLOWED THE BAD DEBTS OF RS.25,91,993/- CLAIMED BY THE ASSESSEE. BEING A GGRIEVED, ASSESSEE FILED APPEAL BEFORE LD CIT(A). LD CIT(A) FOLLOWING THE RECENT JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF TRF LTD VS. CIT, 230 CTR 14(SC) AND AL SO THE DECISION OF ITAT MUMBAII (SB) IN THE CASE OF DCIT VS. SHREYAS S MORAKHIA, (2 010) 40 SOT 432(SB), DELETED THE ADDITION OF BAD DEBTS MADE BY THE AO. HENCE, THIS APPEAL BY THE DEPARTMENT. 4. AT THE TIME OF HEARING, LD D.R. SUPPORTED THE OR DER OF AO AND WHEREAS LD A.R. SUPPORTED THE ORDER OF LD CIT(A). LD A.R. FURTHER RELIED ON THE ORDER OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SHREYAS S MORAKHI A, 342 ITR 285(BOM) AND SUBMITTED THAT THE ISSUE IS FULLY COVERED IN FAVOUR OF THE AS SESSEE. 5. ON CONSIDERATION OF SUBMISSIONS OF LD REPRESENTA TIVES OF PARTIES, WE OBSERVE THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SHREYAS S MORAKHIA(SUPRA) . WE ALSO OBSERVE THAT LD CIT(A) BY FOLLOWING THE DECISION OF ITAT MUMBAI (SB) IN THE C ASE OF SHREYAS S MORAKHIA (SUPRA) HAS DELETED THE ADDITION MADE BY THE AO AND THE SAI D DECISION OF SPECIAL BENCH IS APPROVED BY HONBLE BOMBAY HIGH COURT (SUPRA). IN VIEW OF THIS, WE UPHOLD THE ORDER OF LD CIT(A) AND REJECT GROUND OF APPEAL TAKEN BY D EPARTMENT. 6. IN THE RESULT, APPEAL FILED BY DEPARTMENT IS DIS MISSED. 6 27 + 1 &6+ 1 +2 8# ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MAY, 2013 . !5 1 34) &! 9 : 7 8 TH MAY, 2013 4 1 ; SD/- SD/- ( . ! . '#$/N.K.BILLAIYA ) ( . . /B.R.MITTAL) !& / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; : DATED 8 / 05/2012 I.T.A. NO.1548/M/2012 ASSESSMENT YEAR:2008-09 3 . . ./ PARIDA , SR. PS !5 !5 !5 !5 1 11 1 .2 .2.2 .2E E E E F!E)2 F!E)2 F!E)2 F!E)2 / COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. G ( ) / THE CIT(A)- 4. G / CIT 5. EH; .2 , , / DR, ITAT, MUMBAI 6. ;I J / GUARD FILE. !5 / BY ORDER, /E2 /E2 /E2 /E2 .2 .2.2 .2 //TRUE COPY// 8 + (ASSTT. REGISTRAR) , /ITAT, MUMBAI