ACIT 4(3), MUMBAI V. MANGAL KESHAV SECURITIES P.LTD, MUMBAI

ITA 1699/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84637 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 03-12-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 01-03-2013
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV SR
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO. 1699/M/2013 ( AY: 2004 - 2005 ) ACIT - 4(3), 6TH FLOOR, R.NO.649, AAYAKAR BHAVAN, MUMBAI 400 020. / VS. MANGAL KESHAV SECURITIES P LTD., 501, HERITAGE PLAZA, OPP. INDIAN OIL NAGAR, J.P. ROAD, ANDHERI (W), MUMBAI 400053. ./ PAN : AAACM 8597 F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AKHILENDRA YADAV, SR. AR / RESPONDENT BY : SHRI NISHANT THAKKER / PRASHANT THAKKER / DATE OF HEARING : 03.12 .2014 / DATE OF PRONOUNCEMENT : 19 .12 .2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 1.3.2013 IS AGAINST THE ORDER OF THE CIT (A) - 8, MUMBAI DATED 6.12.2012 FOR THE ASSESSMENT YEAR 2004 - 2005. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE CLAIM OF BAD DEBTS OF THE ASSESSEE OF RS. 4,68,69,789/ - . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED ORDER OF THE CIT (A) IS CONTRARY TO LAW AND CONSEQUENTLY MERITS TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. IN THIS APPEAL, REVENUE RAISED THE ISSUE ON THE ALLOWABILITY OF BAD DEBTS OF THE CUSTOMERS IN THE CASE OF ASSESSEE, A BROKER, WHEN BROKERAGE INCOME RECEIVED FROM THE CUSTOMERS IS DULY CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. CIT (A) GRANTED RELIEF RELYING ON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHREYAS S. MORAKHIA (ITA NO.89 OF 2011). HONBLE HIGH COURT HAS 2 CONFIRMED THE SPECIAL BENCH DECISION OF THE TRIBUNAL. CIT (A) RELIED ON THE APEX COURT JUDGMENT IN THE CASE OF TRF LIMITED VS. CIT (323 ITR 397) BEFORE GRANTING RELIEF TO THE ASSESSEE. 4. WE HAVE H EARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE R ELEVANT MATERIAL AND THE CITED JUDGMENTS OF THE HIGHER JUDICIARY. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE CIT (A)S ORDER, WE FIND PARA 4.2 IS RELEVANT IN THIS REGARD AND THE SAME CONSTITUTES A SPEAKING ORDER ON THE ISSUE UNDER CONSIDERATION. CIT (A) HAS MENTIONED CATEGORICALLY THAT BROKERAGE INCOME WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND THEREFORE, THE SAID JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF SHREYAS S. MORAKHIA (SUPRA) APPLIES TO THE FACTS OF THE PRESENT CASE. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARA 4.2 IS REPRODUCED WHICH READS AS UNDER: 4.2. THE HONBLE BOMBAY HIGH COURT IN THIS CASE HAS ALSO HELD THAT THE REQUIREMENT WHICH HAS BEEN IMPOSED BY PARLIAMENT IN SECTION 36(2)(I) IS THAT A DEDUCTION ON ACCOUNT OF BAD DEBTS CAN BE ALLOWED ONLY WHERE SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIO US YEAR IN WHICH THE AMOUNT OF THE DEBT IS WRITTEN OFF.. 5. FROM THE ABOVE, IT IS EVIDENT THAT CIT (A) CONSIDERED THE FACTS OF THE CASE AS WELL AS THE BINDING JUDGMENTS CITED ABOVE AND HELD THAT THE ASSESSEE IS ENTITLED TO RELIEF. THEREFORE, CONSIDERI NG THE SAME, WE FIND THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 T H DECEMBER, 2014. S D / - S D / - ( AMIT SHUKLA ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 1 9 /12/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 3 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI