Health and Glow Retailing Pvt Ltd , Bangalore V. The Assistant Commissioner of Income Tax Circle-3(1)(2), Bangalore

ITA 1703/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7119 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 18-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIKAS SURYAWANSHI
• Assessee Lawyers: B R SUDHEENDRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO. 1703/BANG/2017 ASSESSMENT YEAR : 2008 - 09 HEALTH AND GLOW RETAILING PVT. LTD., SITE NO.32/5, 2 ND FLOOR, GANAPA TOWERS, HOSUR MAIN ROAD, NGR LAYOUT, ROOPENA AGRAHARA, BANGALORE 560 068. PAN: AAACR 4742B VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(2), BANGALORE. APP ELLANT RESPONDENT APP ELLANT BY : SHRI B.R. SUDHEENDRA, CA RESPONDENT BY : SHRI VI KAS SURYAWANSHI, ADDL. CIT(DR) DATE OF HEARING : 15.11.2017 DATE OF PRONOUNCEMENT : 15 .12.2017 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- GENERAL GROUND 1. THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AND LIABLE TO BE QUASHED. GROUND ON DISALLOWANCE OF WRITE OFF OF RENTAL DEPOS IT 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF WRITE OFF OF RENTAL DEPOSIT AMOUNTI NG TO RS. 11,70,000. ON FACTS AND CIRCUMSTANCES OF THE CASE A ND LAW ITA NO.1703/BANG/2017 PAGE 2 OF 5 APPLICABLE, WRITE OFF OF RENTAL DEPOSIT AMOUNTING T O RS. 11,70,000 SHOULD BE FULLY ALLOWED AS DEDUCTION. GROUND ON DISALLOWANCE OF DEDUCTION CLAIMED IN RESP ECT OF CASH THEFT OF RS. 2,38,858 3. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION CLAIMED IN RESPECT OF CAS H THEFT OF RS. 2,38,858. ON FACTS AND CIRCUMSTANCES OF THE CASE AN D LAW APPLICABLE, DEDUCTION OF RS. 2,38,858 SHOULD BE FUL LY ALLOWED AS CLAIMED BY THE APPELLANT. PRAYER 4. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADD UCED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE O RDER PASSED BY THE LEARNED CIT(A) BE QUASHED OR IN THE ALTERNATIVE , THE AFORESAID GROUNDS AND THE RELIEF PRAYED FOR THEREUNDER BE ALL OWED. THE APPELLANT SUBMITS THAT EACH OF THE ABOVE GROUND S/ SUB- GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ON E ANOTHER. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMI T, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFO RE OR AT, THE TIME OF HEARING, OF THE APPEAL, SO AS TO ENABLE THE INCOME-TAX APPELLATE TRIBUNAL TO DECIDE THE APPEAL ACCORDING T O LAW. THE APPELLANT PRAYS ACCORDINGLY. 2. WITH REGARD TO GROUND NO.2, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT HE HAS GIVEN RENT ADVANCE OF RS.11,7 0,000 AGAINST UDUPI HALL. SINCE THE ASSESSEE COULD NOT RECOVER THE SAI D ADVANCE ON ACCOUNT OF CERTAIN DISPUTE WITH THE LANDLORD, HE WROTE IT OFF IN THE BOOKS OF ACCOUNT AS BAD DEBT AND CLAIMED DEDUCTION WHICH WAS DISALLOWED BY THE AO HAVING NOTED THAT LEGAL DISPUTE HAS NOT BEEN SETTLED BY TH E COURT. THE DISALLOWANCE WAS ALSO CONFIRMED BY THE CIT(APPEALS) . ITA NO.1703/BANG/2017 PAGE 3 OF 5 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIB UNAL WITH THE SUBMISSION THAT THE HE COULD NOT RECOVER THE AMOUNT FROM THE LANDLORD, THEREFORE HE HAS RIGHTLY WRITTEN IT OFF. 4. THE LD. DR, ON THE OTHER HAND, HAS PLACED RELIAN CE UPON THE ORDER OF THE CIT(APPEALS). 5. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT THE ASSESSEE HAS TAKEN PREMISE ON RENT FOR WHICH HE HAS GIVEN INTEREST-FREE REFUNDABLE SECURIT Y DEPOSIT OF RS.11,70,000 TO THE LANDLORD. WHEN THE ASSESSEE CO ULD NOT CONTINUE WITH THE POSSESSION, HE CLAIMED THE ENTIRE AMOUNT BACK W HICH WAS NOT GIVEN BY THE LANDLORD, THEREFORE HE HAS FILED A CIVIL SUIT I N THE CIVIL COURT, BANGALORE. ON ACCOUNT OF NON-RECOVERY OF THIS AMOUNT, HE HAS W RITTEN IT OFF IN THE BOOKS OF ACCOUNT AND CLAIMED DEDUCTION. UNDISPUTED LY, THE ASSESSEE HAS GIVEN REFUNDABLE SECURITY DEPOSIT AND ON ITS NON-RE TURN BY THE LANDLORD, ASSESSEE HAS FILED A CIVIL SUIT AND THE SAME IS SUB JUDICE IN THE COURT AND THEREFORE THE HOPE OF RECOVERY OF THIS REFUNDABLE S ECURITY DEPOSIT HAS NOT BEEN LOST. IN SUCH CIRCUMSTANCES, THE BUSINESS LOS S CLAIMED BY THE ASSESSEE CANNOT BE ALLOWED IN THE IMPUGNED ASSESSME NT YEAR. IT CAN ONLY BE ALLOWED IN THAT ASSESSMENT YEAR WHEN THE ASSESSE E FINALLY FAILS TO RECOVER THE SAID AMOUNT. MOREOVER, IT IS NOT A BAD DEBT AS IT DOES NOT FULFIL THE REQUISITE CONDITIONS PRESCRIBED U/S. 36(2) OF T HE ACT. THEREFORE, I FIND NO MERIT IN THE CLAIM OF ASSESSEE AND ACCORDINGLY I CONFIRM THE ORDER OF THE ITA NO.1703/BANG/2017 PAGE 4 OF 5 CIT(APPEALS). HOWEVER, I DIRECT THE AO TO ALLOW TH E CLAIM OF ASSESSEE ONLY IN THAT YEAR FOR WHICH THE ASSESSEE FINALLY LOSES T HE HOPE OF ITS RECOVERY OF THE SAID AMOUNT. 6. APROPOS GROUND NO.2, THE ASSESSEE HAS CLAIMED TH E DEDUCTION IN RESPECT OF CASH THEFT OF RS.2,38,858, BUT IN THIS R EGARD THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE EITHER BEFORE THE LOWER AU THORITIES OR BEFORE ME. HE HAS ONLY SUBMITTED THAT THERE WAS A CASH THEFT F OR WHICH INFORMATION WAS GIVEN TO THE POLICE, BUT NO EVIDENCE IS FILED O N RECORD. IN THE ABSENCE OF ANY EVIDENCE, THE CLAIM OF ASSESSEE IN RESPECT O F CASH THEFT CANNOT BE ENTERTAINED. ACCORDINGLY, THIS GROUND OF THE ASSES SEE IS REJECTED AND I CONFIRM THE ORDER OF THE CIT(APPEALS). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF DECEMBER, 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 15 TH DECEMBER, 2017. / D ESAI S MURTHY / ITA NO.1703/BANG/2017 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.