ACIT, Coimbatore V. M/s. Elgi Ultra Industries Limited, Coimbatore

ITA 1690/CHNY/2012

• Counselvise Citation: 169021714 RSA 2012
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 03-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANRIRUDH RAI
• Assessee Lawyers: T BANUSEKHAR
• Keywords: Related party transaction; Earning of tax free income; Bad and doubtful debts; Commercial expediency
• Section: 14A; 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENN AI BEFORE DR.O.K.NARAYANAN, VICE PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER .. ITA NO.1690/MDS./2012 ASSESSMENT YEAR:2009-10 ASSISTANT COMMISSIONER OF INCOMETAX, COMPANY CIRCLE I (1), COIMBATORE. VS. M/S.ELGI ULTRA INDUSTRIES LTD., INDIA HOUSE, 1239, TRICHY ROAD, COIMBATORE 641 018. PAN AAACE 4566 G (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI ANRIRUDH RAI CIT ASSESSEE BY : SHRI T.BANUSEKHAR C.A DATE OF HEARING : 21 .11.12 DATE OF PRONOUNCEMENT : 22.1 1.12 O R D E R PER S.S.GODARA JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A)-I, COIMBATORE DATED 13.06.2012 PASSED IN CAS E NO.205/11-12 DATED 13.06.12 FOR ASSESSMENT YEAR 200 9-10 IN PROCEEDINGS UNDER SECTION143(3) OF THE INCOME TAX A CT,1961(IN SHORT THE ACT). ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 2 2. THE APPEAL RAISES; INTER ALIA, THE FOLLOWING E FFECTIVE GROUNDS:- 2. THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSE SSING OFFICER TO EXCLUDE THE INVESTMENTS MADE IN THE GRO UP COMPANIES FOR DISALLOWANCE OF EXPENDITURE UNDER SECTION14A. 3. THE LEARNED CIT(A) HAS NOT GIVEN A CLEAR FINDIN G AS TO WHY THE INVESTMENTS MADE IN THE SUBSIDIARY COMPANIES/GROUP COMPANIES SHOULD BE DELETED FOR WORKING OUT THE INVESTMENTS AND RELATED EXPENDITURE TO IT. ONCE THE ASSESSEE-COMPANY HAS BORROWED FUNDS FROM FINANCIAL INSTITUTIONS SUCH FUNDS SHOULD BE INVESTED/UTILIZED EXCLUSIVELY FOR THE BUSINESS ACTI VITIES OF THE ASSESSEE COMPANY ALONE. INSTEAD, IF THE BORROW ED FUNDS ARE INVESTED EITHER IN DIFFERENCE COMPANIES O R WITH GROUP COMPANIES SUCH INVESTMENTS ARE MADE WITH AN INTENTION TO EARN EXEMPTED INCOME. THEREFORE, SUCH ENTIRE EXPENDITURE RELATED TO THE INVESTMENT MADE O THER THAN ITS BUSINESS ACTIVITIES SHOULD BE WORKED OUT A S PROVIDED UNDER SECTION.14A READ WITH RULE 8D AND OU GHT TO BE DISALLOWED. 4. THE LEARNED CIT(A) HAS NOT RELIED UPON ANY DECI SION IN SUPPORT OF HIS VIEW. THEREFORE, THE DECISION GIVEN BY THE CIT(A) IS NOT ACCEPTABLE. IT IS HELD IN THE CASE OF M/S.MAXOPP INVESTMENTS LTD. VS. CIT [TS-668-HC- ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 3 2011(HC) ] WHEREIN THE HONBLE DELHI HIGH COURT FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S.GODREJ & BOYCE MFG. CO. LTD. HELD T HAT THE TAX EXEMPT INVESTMENT HAVE TO BE INCLUSIVE OF INVESTMENTS MADE IN SUBSIDIARY COMPANIES ALSO. IT IS ALSO HELD IN THE CASE OF M/S. ABHISHEK INDUSTRIES LTD. R EPRTED IN 205 CTR 304(P&H) AND IN THE CASE OF M/S.VARINDER AGRO CHEMICALS LTD. REPORTED IN 205 CTR 334 (P&H) T HAT ONCE ASSESSEE HAS BORROWED CERTAIN FUNDS ON WHICH LIABILITY TO PAY INTEREST IS BEING INCURRED AND ON THE OTHER HAND, THE ASSESSEE HAS ADVANCED CERTAIN AMOUNTS TO SISTER CONCERNS WITHOUT CHARGING INTERESTS AND WITH OUT ANY BUSINESS PURPOSE, THE INTEREST TO THE EXTENT THE AD VANCE HAD BEEN MADE WITHOUT CARRYING ANY INTEREST IS TO B E DISALLOWED. ONUS IS ON THE ASSESSEE TO PROVE THE N EXUS BETWEEN THE BORROWED FUND AND THE FUNDS ADVANCED TO OTHERS WITHOUT INTEREST. IT IS ALSO HELD BY THE HO NBLE SUPREME COURT IN THE CASE OF S A BUILDERS (288 ITR 1) THAT DISALLOWANCE OF INTEREST CAN BE MADE ON BORROW ED CAPITAL WHEN THE COMMERCIAL EXPEDIENCY OF UTILIZATI ON OF SUCH LOAN WAS NOT SPECIFIED AND PROVED BY THE ASSES SEE. 5. THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSES SING OFFICER TO ALLOW THE CLAIMS OF BAD DEBTS/ACTIONABL E CLAIMS UNDER SECTION 37(1) RELYING ON THE DECISION OF THE HONBLE TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE A.Y 2004-05 . 6. THE LEARNED CIT(A) OUGHT TO HAVE OBSERVED THAT T HE TAKE OVER OF THE DEBTS OF ITS SISTER-CONCERN WHEN T HERE ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 4 WAS NO MERGER OR AMALGAMATION AT A DISCOUNTED VALUE BY THE ASSESSEE IS OBVIOUSLY A SELF-SERVING ARRANGEMEN T AND COLORABLE DEVICE. 7. THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESS ING OFFICER TO ALLOW THE BAD DEBTS UNDER SECTION37(1) O F THE ACT, ESPECIALLY WHEN THERE IS A SPECIAL PROVISION F OR DEDUCTION OF BAD DEBTS UNDER SECTION 36(I)(VII) OF THE ACT. 8.THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING O FFICER TO ALLOW THE BAD DEBTS CLAIM UNDER SECTION 37(1) OF THE ACT, WHEN THE SAME IS NOT LAID OUT AND EXPENDED WHO LLY FOR THE BUSINESS OF THE ASSESSEE. GROUNDS NO.2-4 3. THE FACTS AS RELEVANT ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF WET GRI NDERS AND TEXTILE ACCESSORIES. REGARDING IMPUGNED ASSESSMENT YEAR, IT HAD FILED ITS RETURN ON 26 TH MARCH, 2011; DECLARED TOTAL INCOME OF ` 2,15,10,875/- UNDER THE NORMAL PROVISIONS AND THAT OF ` 2,21,14,724/- UNDER SECTION 115JB. 4. IN SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER TOOK COGNIZANCE OF THE FACT THAT THE ASSESSEE HAD DECLAR ED DIVIDEND OF ` 16,56,054/- AS EXEMPT INCOME. WE NOTICE THAT VIDE ASSESSMENT ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 5 ORDER DATED 30.12.11, THE A.O INVOKED SECTION 14A V IDE RULE 8D BY STATING THAT PROPORTIONATE DISALLOWANCE HAS TO B E MADE QUA PROBABLE EXPENDITURE AND WORKED OUT THE AMOUNT OF E XPENDITURE AS ` 7,70,702 AND ADDED IT IN THE ASSESSEES RETURN. IN APPEAL PREFERRED BY THE ASSESSEE, THE CIT(A) HAS PARTLY AC CEPTED THE ASSESSEES CONTENTIONS BY OBSERVING THAT SINCE THE ASSESSEE HAD MADE INVESTMENTS IN SUBSIDIARY COMPANIES/GROUP COMP ANIES AS A PROMOTER, THEREFORE, THE SAID INVESTMENTS NEED NOT BE TAKEN INTO CONSIDERATION FOR MAKING DISALLOWANCE UNDER SECTION 14A WITH RULE 8D. IN THE LIGHT THEREOF, THE ASSESSING OFFIC ER HAS BEEN DIRECTED TO RE-EXAMINE THE ASSESSEES CLAIM FOR EXC LUDING THE INVESTMENTS MADE IN THE GROUP COMPANIES. HENCE, TH E REVENUE IS AGGRIEVED. 5. THE DEPARTMENTAL REPRESENTATIVE APPEARING ON B EHALF OF REVENUE HAS VEHEMENTLY ARGUED THAT WITHOUT SUPPORTI NG THE ABOVE SAID FINDINGS BY CITING COGENT REASONS, THE CIT(A) HAS WRONGLY ACCEPTED THE ASSESSEES CONTENTIONS AND DI RECTED THE ASSESSING OFFICER TO EXCLUDE THE ASSESSEES INVESTM ENT MADE IN THE GROUP COMPANIES. ACCORDINGLY, HE PRAYED THAT T HE GROUND BE RESTORED BACK TO THE FILE OF CIT(A) FOR DECISION AF RESH. ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 6 6. ON THE OTHER HAND, A.R APPEARING AT THE BEHEST OF THE ASSESSEE SUBMITTED THAT IN THIS CASE, NEITHER THE A.O NOR THE CIT(A) HAVE GIVEN DETAILED FINDING IN THEIR RESPECT IVE ORDERS. HENCE, HE PRAYED INSTEAD OF REMITTING THE MATTER B ACK TO THE CIT(A), IT SHOULD BE SENT TO THE FILE OF ASSESSING OFFICER. 6.1. IN REBUTTAL, THE D.R HAS NOT SERIOUSLY CONTES TED THE SUBMISSIONS OF THE ASSESSEE ABOVE SAID. 7. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY BO TH PARTIES AT LENGTH AND GONE THROUGH THE RELEVANT FIN DINGS IN THE ASSESSMENT ORDER AS WELL THE ORDER OF CIT(A). WE N OTICE THAT QUA EXEMPT INCOME DECLARED BY THE ASSESSEE, THE ASSESSI NG OFFICER HAD INVOKED SECTION 14A AND BY TAKING RECOURSE TO R ULE 8D OF THE INCOME TAX RULE, 1962, WORKED OUT THE PROBABLE EXPENDITURE AS ` 7,70,702/-(SUPRA) WITHOUT SUPPORTING IT BY DUE REAS ONS EXPLAINING THE CORRELATION BETWEEN THE EXEMPT INCOM E AND EXPENDITURE AS WELL AS REASONS FOR INVOKING SEC.14 A OF THE ACT.. SIMILARLY, THE CIT(A) HAS OBSERVED THAT SINCE THE ASSESSEE HAD MADE INVESTMENTS IN GROUP CONCERNS,SEC.14A DOES NOT APPLY. IN OUR CONSIDERED OPINION, IN THE INSTANT CASE, THE FI NDINGS OF THE A.O AS WELL AS CIT(A) ARE NOT BASED ON DETAILED REASONS IN SUPPORT OF ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 7 THEIR FINDINGS. THEREFORE, WE DEEM IT APPROPRIATE TO RESTORE THE GROUND BACK TO THE FILE OF THE ASSESSING OFFICER WH O SHALL PASS A FRESH ORDER IN ACCORDANCE WITH LAW AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUNDS NO.5-8 8. DURING SCRUTINY, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD RAISED CLAIM OF ` 4,21,09,445/- AS BAD DEBTS/ACTIONABLE CLAIM AS WRITTEN OFF UNDER SECTI ON 36(1)(VII) OF THE ACT. THEREAFTER THE ASSESSING OFFICER EXAMINE D THE FACTS PERTAINING TO CLAIM AND OBSERVED THAT IT DID NOT SA TISFY THE CONDITIONS ENUMERATED IN SECTIONS 36(1)(II) AND 36( 2) AND WAS OF THE VIEW THAT THE ASSESSEE HAD TAKEN OVER DEBTS TO ` 25,68,85,743/- OF ITS SISTER CONCERN M/S.ELGI FINA NCE LIMITED IN THE PREVIOUS YEAR 2001-02 & ASSESSMENT YEAR 2002-03 AND DIFFERENCE OF ` 3.58 CRORES HAD BEEN OFFERED AS INCOME IN THE A.Y. 2002-03 BY WAY OF MUTUAL CONSENT. THE A.O. ALS O RECORDED THE FINDING THAT EVEN AFTER TAKING OVER THE DEBTS, BOTH ENTITIES, I.E. THE ASSESSEE M/S.ELGI ULTRA INDUSTRIES AND M/S.ELGI FINANCE LTD. CONTINUED WITH THEIR DISTINCT STATUS. THEREAFTER, THE ASSESSING OFFICER ALSO FOUND THAT THE DEBTS IN QUESTION HAD ALREADY BECOME ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 8 DEBT IN THE PREVIOUS COMPANY AND TAKING OVER WAS O NLY A BID TO BAIL OUT THE ASSOCIATE COMPANY BY THE ASSESSEE, WHI CH ATTRACTED THE CONCEPT RELATED PARTY TRANSACTION. THE ASSE SSING OFFICER ALSO CONSIDERED SEC.37 OF THE ACT AS WELL AS THE ID ENTICAL CLAIM OF THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS WITH STO OD ACCEPTED BY THE TRIBUNAL BY DISTINGUISHING THE SAME ON FACTS AND BY INVOKING SECTION 37 AND CONDITIONS ENSHRINED THERE IN, THE ASSESSING OFFICER HELD VIDE ASSESSMENT ORDER THAT T HE ASSESSEES CLAIM WAS NOT ALLOWABLE UNDER SECTION 37. NOT ONLY THIS, THE ASSESSING OFFICER ALSO HELD THAT THE CLAIM IN QUEST ION WAS NOT EVEN ACCEPTABLE AS BUSINESS LOSS AS WELL. 9. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL; WH EREIN THE CIT(A) HAS INTERFERED IN THE FINDINGS OF THE ASSESS ING OFFICER BY RELYING ON THE DECISION OF ITAT CHENNAI BENCH IN IT A NO.317/MDS./11 FOR A.Y. 2007-08 AND DIRECTED THE AS SESSING OFFICER TO ALLOW THE CLAIM IN QUESTION RAISED BY TH E ASSESSEE IN THE SHAPE OF BAD DEBTS. THEREFORE, THE REVENUE HA S RAISED THE INSTANT GROUND. 10. REITERATING THE PLEADING MADE IN THE GROUNDS , THE CONTENTION OF THE REVENUE IS THAT THE CIT(A) IN THE INSTANT CASE ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 9 HAS WRONGLY INTERFERED IN THE FINDINGS OF ASSESSING OFFICER DISALLOWING ASSESSEES CLAIM OF BAD DEBTS IN QUEST ION. HENCE, THE D.R PRAYED FOR RESTORING THE DISALLOWANCE AS MA DE BY ASSESSING OFFICER. 11. OPPOSING THE CONTENTION OF REVENUE, IT HAS BEE N SUBMITTED BY THE A.R REPRESENTING THE ASSESSEE THAT THE ISSUE IN HAND IS SQUARELY COVERED BY THE VARIOUS DECISIONS OF ITAT C HENNAI BENCH AND ALSO PRODUCED COPIES OF THE ORDERS BEFORE US. IN THE LIGHT THEREOF, HE PRAYED FOR UPHOLDING THE CIT(A)S ORDER. 12. WE HAVE HEARD BOTH PARTIES AT LENGTH AND GONE THROUGH THE RELEVANT FINDINGS AS WELL AS THE CASE LAWS PRODUCED BY THE ASSESSEE. THE FACTS ARE NOT IN DISPUTE THAT AS THE ASSESSEE HAD RAISED THE CLAIM OF BAD DEBTS IN QUESTION, WHICH PE RTAINED TO ITS SISTER CONCERN ON THE GROUND THAT IT HAD TAKEN OVER THE GROUP ENTITY. FROM THE ASSESSMENT ORDER ITSELF, IT IS CL EAR THAT THE ASSESSEE HAD TAKEN OVER THE DEBTS IN A.Y.2002-03. IN THE CASE LAW AS CITED BY THE ASSESSEE, IT IS CLEAR THAT THE VERY ISSUE HAS BEEN ARISING FROM TIME TO TIME. WE NOTICE THAT VID E ORDER DATED 2 ND APRIL, 2012 PERTAINING TO A.Y.2007-08 AS WELL, THE ISSUE STOOD DECIDED IN FAVOUR OF THE ASSESSEE IN ITA NO.317/MDS ./11 (ONE OF ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 10 US DR. O. K. NARAYANAN V.P. WAS ALSO MEMBER OF TH E BENCH) WHEREIN IT HAD BEEN OBSERVED AS UNDER:- 5. WE HEARD SHRI T.BANUSEKAR, THE LEARNED COUNSEL A PPEARING FOR THE ASSESSEE AND SHRI S. MOHARANA, THE LEARNED COMM ISSIONER OF INCOME-TAX APPEARING FOR THE REVENUE. 6. THE VERY SAME ISSUE WAS CONSIDERED BY ITAT, CHEN NAI D BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004 -05 THROUGH ITS ORDER DATED 6.6.2008 PASSED IN ITA NO.2256/MDS/2006 . AFTER DETAILED EXAMINATION OF THE CASE, THE TRIBUNAL HELD THAT THERE IS NO INFIRMITY IN THE ELABORATE ORDER OF THE COMMISSIONE R OF INCOME- TAX(APPEALS) THAT THE AMOUNTS ARE NOT ALLOWABLE UND ER SEC.36(1)(VII). BUT AN ALTERNATE GROUND RAISED BY THE ASSESSEE WAS CONSIDERED AGAIN BY THE TRIBUNAL THAT WHETHER THE DEDUCTION CA N BE CLAIMED UNDER SEC.37(1) OR NOT. THE TRIBUNAL FOUND THAT THI S ISSUE WAS NOT CONSIDERED BY THE COMMISSIONER OF INCOME-TAX(APPEAL S). REFERRING TO THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF DEVI FILMS PVT. LTD. V. CIT (75 ITR 301), THE TRIBU NAL HELD THAT IF A SUM IS NOT ALLOWABLE AS BAD DEBT, IT MAY ALSO BE CO NSIDERED, WHETHER IT CAN BE CONSIDERED AS BUSINESS LOSS. THE TRIBUNAL REMITTED THE ISSUE BACK TO THE COMMISSIONER OF INCO ME-TAX(APPEALS) TO CONSIDER THE MATTER UNDER SEC.37(1). 7. IN OBEDIENCE TO THE ABOVE DIRECTION OF THE TRIBU NAL, THE COMMISSIONER OF INCOME-TAX(APPEALS) RECONSIDERED TH E MATTER BUT STILL REJECTED THE CLAIM OF THE ASSESSEE . THE MATT ER WAS AGAIN BROUGHT BEFORE THE TRIBUNAL IN ITA NO.463/MDS/2011. THE TRIBUNAL DISPOSED OF THE SAID APPEAL THROUGH ITS ORDER DATED 15.6.2011. THE TRIBUNAL AFTER EXAMINING THE ALTERNATE CONTENTION O F THE ASSESSEE FOUND THAT THE TRANSACTIONS WERE MADE BY THE ASSESS EE AND THEY WERE ENTERED INTO IN THE BOOKS OF ACCOUNT IN A PROP ER MANNER AND ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 11 THE DISCOUNT EARLIER GAINED BY THE ASSESSEE IN THE TRANSACTIONS WAS OFFERED FOR TAXATION AND WAS ACTED UPON BY THE REVE NUE. THE TRIBUNAL HELD THAT AFTER HAVING ACCEPTED THE ENTIRE SCHEME OF TRANSACTIONS ENTERED INTO BY THE ASSESSEE AND ALSO AFTER TAXING THE GAINS MADE BY THE ASSESSEE-COMPANY IN THE TRANSACTI ONS, IT WAS NOT PROPER ON THE PART OF THE REVENUE TO HOLD THAT THE DEBTS WRITTEN OFF BY THE ASSESSEE COULD NOT BE ALLOWED AS A DEDUCTION UNDER SEC.37(1). THE TRIBUNAL MADE A FINDING THAT THE FAC TS OF THE CASE SPEAK OUT THAT THE DEBTS WERE TAKEN OVER BY THE ASS ESSEECOMPANY AS PART OF ITS BUSINESS DESIGN. 8. IT IS THE SAME ISSUE WHICH HAS COME UP FOR THE I MPUGNED ASSESSMENT YEAR ALSO. THE ASSESSEE HAS TAKEN OVER T HE DEBTS OF ITS SISTER CONCERN AS PART OF ITS BUSINESS ENDEAVOUR BY EXECUTING A LAWFUL AGREEMENT. THE SISTER CONCERN AND THE ASSESS EE BOTH, HAVE ENTERED INTO THE AGREEMENT IN A RIGHTFUL MANNER. TH E DISCOUNT BENEFIT GAINED BY THE ASSESSEE AT THE TIME OF TRANS ACTIONS WAS OFFERED AS INCOME. THAT WAS ASSESSED BY THE REVENUE . WHEREVER THE ASSESSEE IS GETTING ANY BENEFIT OUT OF THE TRAN SACTIONS, THE ASSESSEE IS OFFERING THE SAME AS INCOME UNDER SEC.4 1(1). WHEN ALL THESE MATTERS ARE ACCEPTED BY THE REVENUE, IT IS IN CUMBENT UPON THEM TO ACCEPT THE LOSS ARISING OUT OF SUCH TRANSAC TIONS AND ALLOW IT AS A DEDUCTION. THE BAD DEBTS WERE TAKEN OVER AS PA RT OF ITS BUSINESS AND EVEN IF THOSE AMOUNTS WERE WRITTEN OFF , AS THE AMOUNTS WERE NOT COLLECTED, THEY PARTOOK THE CHARAC TER OF BUSINESS LOSS. THEREFORE, THE ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION UNDER SEC.37(1). 9. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION FOR THE AMOUNT OF BAD DEBTS CLAIMED BY THE ASSESSEE AS A BUSINESS LOSS. IT IS N OT NECESSARY TO BE CARRIED AWAY BY THE NOMENCLATURE EXTENDED TO THE LOSS AS BAD DEBT. IN FACT, IT IS A BUSINESS LOSS. ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 12 10. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. THOUGH THE REVENUE IN ITS GROUNDS HAS PLEADED THAT THE CIT(A) HAS WRONGLY PLACED RELIANCE ON THE ABOVE SAID ORDER OF CO- ORDINATE BENCH FOR A.Y.2007-08 QUA THE SIMILAR ISSU E, BUT IN THE ABSENCE OF ANY DISTINGUISHABLE FEATURE, WE ARE UNAB LE TO ACCEPT THE STAND OF THE APPELLANT/REVENUE. ACCORDINGLY, W E ALSO HELD THAT IN INSTANT CASE, THE CIT(A) HAS RIGHTLY ACCEPT ED THE CLAIM OF ASSESSEE IN THE SHAPE OF BAD DEBTS. ACCORDINGLY, THE GROUND IS DECIDED AGAINST THE REVENUE. 13. TO SUM UP, THE APPEAL STANDS PARTLY ACCEPTED FOR STATISTICAL PURPOSESQUA GROUND NO.2 ONLY. ORDER PRONOUNCED ON THURSDAY, THE 22 ND NOVEMBER, 2012 AT CHENNAI. SD/- SD/- (DR.O.K.NARAYANAN) (S.S.GODARA ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 22 ND NOVEMBER, 2012. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. 1690/MDS/12 M/S.ELGI ULTRA INDUSTRIES LTD 13