ACIT, Circle-4(1), Kolkata, Kolkata V. M/s. Goodricke Group Ltd., Kolkata

ITA 1772/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1812 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 01-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TANMOY DUTTA
• Assessee Lawyers: ROBIN CHOWDHURY
• Keywords: Assessment record; Commercial expediency
• Section: 143(3); 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SHRI S.S. GODARA, JM & SHRI M.BAL AGANESH, AM ] I.T.A NO. 1772/KOL/20 17 ASSESSMENT YEAR : 2004-0 5 ACIT, CIRCLE-4(1), KOLKATA -VS- M/S GOODRICK E GROUP LTD. [PAN: AABCG 1614 Q] (APPELLANT) (RESPOND ENT) FOR THE ASSESSEE : SHRI ROBIN CH OWDHURY, ADDL. CIT DR FOR THE DEPARTMENT : SHRI TANMOY DUTTA DATE OF HEARING : 29.08.2018 DATE OF PRONOUNCEMENT : 05.09.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE OR DER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-17, KOLKATA [IN SHORT THE LD CI T(A)] IN APPEAL NO. 208/CIT(A)- 17/KOL/2015-16 DATED 20.04.2017 AGAINST THE ORDER P ASSED BY THE ACIT, CIRCLE-4, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 15.12.2006 FOR THE ASSESSM ENT YEAR 2004-05. 2. AT THE TIME OF HEARING THE ASSESSEE SOUGHT AN AD JOURNMENT. BUT SINCE THIS IS A COVERED ISSUE, WE PROCEED TO DISPOSE OFF THE APPEAL ON HEAR ING THE LD. DR. 2 ITA NO.1772/KOL/2017 M/S GOODRICKE GROUP LTD. A.YR. 2004-05 2 3. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION OF RS. 5,60,07,403/- ON ACCOUNT OF BAD AND DOUBTFUL ADVANCES WRITTEN OFF, IN THE FACTS AND CIR CUMSTANCES OF THE CASE. 4. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSES SEE IS A PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF GROWING, MANUFACTURING AND SELLI NG OF TEA. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 WAS FILED BY THE ASSESS EE COMPANY ON 29.10.2004 DECLARING TOTAL LOSS OF RS. 1,89,81,243/-. THE ASSE SSEE COMPANY DURING THE PREVIOUS YEAR ENDED 31.03.2004 SOUGHT TO WRITE OFF THE NET OUTSTA NDING CURRENT ACCOUNT BALANCE OF RS. 5,60,07,403/- DUE FROM DOOTERIAH & KALEJ VALLEY TE A ESTATE PVT. LTD. (D&KV) AS AN IRRECOVERABLE ADVANCE AND CLAIM AS DEDUCTION IN THE RETURN OF INCOME. THE ASSESSEE BOUGHT 4,375 EQUITY SHARES (BEING 25% OF ITS PAID U P CAPITAL) OF D&KV IN THE YEAR 1993 AT THE TOTAL VALUE OF RS. 4,37,500/-. D&KVS BUSIN ESS AT THAT RELEVANT TIME WAS CULTIVATION AND MANUFACTURE OF TEA. BY VIRTUE OF HO LDING OF 25% OF THE SHARES, IT WAS A COMPANY UNDER THE SAME MANAGEMENT OF THE ASSESSEE C OMPANY. THE ASSESSEE IN THE COURSE OF ITS BUSINESS ADVANCED VARIOUS SUMS OF MON EY FOR PURCHASE OF TEA, SUPPLIED STORE MATERIALS FROM ITS CENTRAL STORES AND ALSO DE PUTED ITS EMPLOYEES TO D&KV. THESE TRANSACTIONS WERE ROUTED THROUGH THE CURRENT ACCOUN T WITH D&KV AND THE OUTSTANDING BALANCE REMAINS THE SAME AMOUNT OF RS. 8,08,07,403/ - WHICH STOOD AT THE CLOSE OF THE FINANCIAL YEAR ENDED 31 ST MARCH, 2002. THE FINANCIALS OF D&KV WERE WEAK DUE TO HUGE LOSSES INCURRED YEAR AFTER YEAR AND ITS ACCUMULATED LOSS AS ON 31 ST MARCH 2003 STOOD AT RS.20,04,72,874/- AS AGAINST ITS PAID UP CAPITAL OF RS.17,49,900/-. IN VIEW THEREOF, IT COULD NOT RAISE FUNDS EITHER FROM FINANCIAL INSTITU TIONS OR FROM OPEN MARKET. THUS D&KV FAILED TO REPAY THE OUTSTANDING DUES OF RS.8,0 8,07,403/- LYING IN THE CURRENT ACCOUNT. FURTHER DUE TO NEGATIVE WORKING RESULT OF D&KV, THE ASSESSEE WAS DEPRIVED OF ANY RETURN OUT OF THE INVESTMENTS MADE IN ITS EQUIT Y SHARE. IN THE CIRCUMSTANCES, THE ASSESSEE CONSIDERED VARIOUS OPTIONS TO REDUCE ITS F INANCIAL LOSS INCLUDING THE DISPOSAL OF 3 ITA NO.1772/KOL/2017 M/S GOODRICKE GROUP LTD. A.YR. 2004-05 3 ITS EQUITY SHARE HOLDING IN D&KV. IN THE MEANTIME, THE ASSESSEE GOT AN OFFER FROM M/S. TOUBRO INFOTECH & INDUSTRIES LTD (THE PURCHASER) FO R PURCHASE OF 4,375 SHARES HELD IN D&KV AND ACCORDINGLY IT BECAME A PARTY TO THE AGREE MENT DATED 61H DECEMBER 2003. AS PER THE AGREEMENT, THE PURCHASER AGREED TO PURCH ASE THE SAID D&KV SHARES @ RS.172.39 PER SHARE AND IN TOTAL IT AGREED TO PAY R S. 2, 48, 00, 000/- IN FULL AND FINAL SETTLEMENT OF THE OUTSTANDING BALANCE OF RS.8,08, 0 7,403/- DUE FROM D&KV. THE ASSESSEE ON CONSIDERATION OF THE ATTENDANT FACTS AN D IN THE CIRCUMSTANCES, SOUGHT TO WRITE OFF THE NET OUTSTANDING BALANCE OF RS.5,60,07,403/- (RS.8,08, 07,403 - RS.2,48, 00, 000) DUE FROM D&KV IN THE CURRENT YEAR AS AN IRRECOVERAB LE AMOUNT. IT WAS ABUNDANTLY CLEAR THAT AFTER THE CONCLUSION OF THE AGREEMENT DATED 6T H DECEMBER 2003, THERE REMAINS NO SCOPE FOR ANY RECOVERY OF ANY AMOUNT FROM D&KV AND ALSO DUE TO THE FACT THAT ITS ACCUMULATED LOSS WAS MORE THAN THE VALUE OF THE TWO TEA ESTATES OF D&KV SITUATED ON LEASEHOLD LAND. ALL THESE FACTS WERE BROUGHT TO THE NOTICE OF THE LD AO WHEN HE CALLED FOR THE REASONS FOR ALLOWING THE SAID CLAIM. THE LD . AO OBSERVED THAT THE LENDING OF MONEY WAS NOT MADE BY THE ASSESSEE TO D&KV IN THE O RDINARY COURSE OF BUSINESS OF MONEY LENDING. THE ASSESSEE HAS NOT TAKEN INTO ACCO UNT THE SAID SUM AS ITS INCOME IN THE EARLIER YEARS. ACCORDINGLY, THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S 36(1)(VII) READ WITH SECTION 36(2) OF THE ACT. WITH THIS OBSERVATION, THE LD. AO PROCEEDED TO DISALLOW THE CLAIM OF BAD AND DOUBTFUL ADVANCE WRITTEN OFF IN THE SUM OF RS. 5,60,07,403/-. 5. BEFORE THE LD. CIT(A), APART FROM REITERATING TH E FACTS NARRATED ABOVE, THE ASSESSEE PLACED RELIANCE ON THE DECISION OF ORDER PASSED BY THE LD. CIT(A)-2/CAL IN THE CASE OF STEWART HOLL INDIA PVT. LTD. IN APPEAL NO. 281/CIT( A)-2/2014-15 DATED 16.12.2015 WHEREIN THE AO DISALLOWED RS. 2,42,00,000/- FROM D& KV AND THE SAID DISALLOWANCE WAS DELETED. THE LD. CIT(A) GRANTED RELIEF TO THE A SSESSEE BY PLACING RELIANCE ON THE SAID DECISION IN THE CASE OF STEWART HOLL INDIA PVT. LTD . SUPRA BY OBSERVING AS UNDER: 4 ITA NO.1772/KOL/2017 M/S GOODRICKE GROUP LTD. A.YR. 2004-05 4 ON GOING THROUGH THE ORDER OF THE LD. CIT(APPEAL) IN APPEAL NO. 281 ICIT(A)-2/20 14- 15 DT. 16-12-2015, IT IS SEEN THAT THE GROUND OF AP PEAL IS AS FOLLOWS: 'THAT ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO. ERRED IN DISALLOWING THE CLAIM OF DEDUCTION OF IRRECOVERABLE ADVANCE OF RS.2,42,00,000/- GIVEN TO DOOTERIAH AND KALEJ VALLEY TEA ESTATES PVT. LTD. (HEREINAFTER REFERRED TO AS DTKV) IN THE USUAL COURSE OF APPELLANT'S BUSINESS FOR PUR CHASE OF TEA WRITTEN OFF AS BUSINESS LOSS U/S. 37 OF THE ACT. THAT ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO ERRED IN STATING THAT THE APPELLANT FAILED TO PROVE THE SAID PAYMENT TO DTKV IN SPITE OF MATERIALS AVAILABLE ON RECORD AND THEREBY REJECTING THE CLAIM OF DEDUCTION OF RS. 2,42,00,000/-. ' HENCE IT IS OBSERVED THAT THE ISSUE IN THE IMPUGNE D APPEAL IS SAME. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(APPEAL) HAS OBSERVED AS UNDER: 'THE SUBMISSION OF LD. AR HAS BEEN CONSIDERED IN T HE LIGHT OF DETAILS FILED AND THE CASE LAWS REFERRED TO. STATED IN BRIEF, THE ASSESSEE CLA IMED WRITE OFF OF ADVANCES OF RS. 2.42 CRORES GIVEN TO ONE OF ITS ERSTWHILE GROUP COMPANIE S NAMELY, M/S. DOOTERIAH & KALEJ VALLEY TEA ESTATES LTD. (DTKV IN SHORT) FOR THE PUR CHASES OF TEA. SINCE THEN, THE ASSESSEE COMPANY COULD NOT REALIZE EITHER THE ADVAN CES GIVEN OR THE TEA FROM M/S. DTKV AND WRITTEN OFF THE SAID ADVANCES IN ITS BOOKS IN THE PREVIOUS YEAR. LD. AR ARGUED THAT THE ADVANCES GIVEN TO M/S. DTKV WAS A B USINESS LOSS AND THEREFORE, IS AN ALLOWABLE DEDUCTION U/S. 37(1) OF THE ACT. DURING T HE ASSESSMENT PROCEEDINGS, THE AO ASKED FOR CERTAIN DETAILS TO EXAMINE THE GENUINENES S OF THE CLAIM. THE ASSESSEE PRODUCED NECESSARY EVIDENCES OF PAYMENT OF SAID ADV ANCES VIZ. DETAILS OF PAYMENTS WITH CHEQUE NUMBERS AND COMPUTERIZED GENERAL LEDGERS FOR THE PREVIOUS YEARS ENDED ON 31- 03-2003 AND 31-03-2004 CONTAINING ACCOUNTS OF M/S. DTKV. HOWEVER, CONFIRMATION FROM M/S. DTKV COULD NOT BE PRODUCED SINCE THE SAID COMPANY WAS SOLD TO ANOTHER GROUP COMPANY NAMELY, TOUBRO INFOTECH INDUSTRIES LT D. AFTER EXAMINATION OF THE ASSESSMENT RECORDS OF M/S. DTKV, AO FOUND THAT IT H AD SHOWN ADVANCES RECEIVED AGAINST SALE OF TEA AT RS.6,09,42,0001- AS ON 31-03 - 2003, WHICH WAS REDUCED TO 'NIL' AS ON 31-03-2004. SINCE NO ADVANCE WAS SHOWN OUTSTANDI NG IN THE BOOKS OF M/S. DTKV AS ON 31-03-2004, THE AO REJECTED ASSESSEE'S CLAIM OF WRITE OFF OF ADVANCES OF RS. 2, 42, 00, 000/-. THE CRUX OF THE ISSUE IS WHETHER THE ASSESSEE COMPA NY HAD ADVANCED RS.2.42 CRORES TO ITS ERSTWHILE GROUP COMPANY M/S. DTKV IN THE F. Y E NDING BEFORE 31-03-2003 AND 31- 03-2004 FOR PURCHASES OF TEA AND WHETHER SUBSEQUENT LY THE ASSESSEE COMPANY HAD GOT BACK THE SAID AMOUNT IN CASH OR KIND. THE ASSESSEE COMPANY FILED NECESSARY EVIDENCES OF PAYMENTS OF ADVANCES VIZ., CHEQUE NUMBERS, NAME OF THE BANK AND GENERAL LEDGERS AS ON 31-03-2003 AND 31-03-2004 CONTAINING THE ACCOUNT S OF M/S. DTKV. FURTHER, THE A O ALSO BEING THE AO OF M/S. DTKV, EXAMINED THE ASSE SSMENT RECORDS OF M/S. DTKV FOR THE RELEVANT PERIODS AND FOUND RECEIPTS OF ADVANCES AGAINST SALE OF TEA TOTALING TO RS. 6, 09, 42, 000/-. THIS APART, THE ASSESSEE COMPANY FUR NISHED A COPY OF THE ASSESSMENT ORDER FOR THE A. Y 2004-05, AS PER WHICH IN THE COM PUTATION OF INCOME, A.O. ADDED BACK THE PROVISION FOR DOUBTFUL ADVANCES OF RS.2.42 CROR ES TO THE COMPOSITE INCOME. THESE 5 ITA NO.1772/KOL/2017 M/S GOODRICKE GROUP LTD. A.YR. 2004-05 5 BEING THE FACTS OF THE CASE, THERE WAS NO SCOPE ON THE PART OF THE AO OF DOUBTING THE GENUINENESS OF ADVANCES PROVIDED BY THE ASSESSEE CO MPANY TO M/S. DTKV. COMING TO THE QUESTION WHETHER THE ASSESSEE COMPANY HAD GOT BACK THAT ADVANCES EITHER IN CASH OR KIND (PURCHASES OF TEA), SINCE 'N IL' BALANCE AGAINST ADVANCE WAS SHOWN IN THE ACCOUNTS OF M/S. DTKV AS ON 31-03-2004 , THE AO BEING THE COMMON AO OF BOTH COMPANIES, HAS NOT MADE ANY ADVERSE COMMENT S EVEN AFTER VERIFICATION OF ASSESSMENT RECORDS OF M/S. DTKV. THEREFORE, IT CAN BE ASSUMED THAT M/S. DTKV HAD NOT RETURNED THE ADVANCES IN ANY MANNER AND IT TREA TED THE SAID LIABILITY NO LONGER REQUIRED IN ITS BOOKS OF ACCOUNTS OF THE YEAR ENDED 31-03-2014, AS ASSERTED BY LD. AR IN HIS WRITTEN SUBMISSION. AS IT APPEARS, THE ASSES SEE COMPANY HAD GIVEN ADVANCES TO M/S DTKV FOR PURCHASE OF TEA, WHICH IS A REGULAR BU SINESS OF BOTH COMPANIES. THE AO ALSO FAILED TO BRING IN ANY EVIDENCE EVEN AFTER EXA MINING BALANCE SHEET OF BOTH CONCERNS THAT THE SAID PAYMENTS OF ADVANCES WERE EI THER CAPITAL OR PERSONAL IN NATURE. IN VIEW OF SUCH, AS WELL AS FOLLOWING THE RATIO OF JUDGMENTS CITED BY THE ASSESSEE AND QUOTED HEREINABOVE, I AM OF THE OPINION THAT NON-RE COVERY OF ADVANCE INCIDENTAL TO THE BUSINESS AND GIVEN IN THE COURSE OF A BUSINESS IS A LOSS AND SUCH LOSS IS AN EXPENDITURE COVERED U/S 37 OF THE ACT. THE ADDITION OF RS. 2,42 ,00,000/- IS, THEREFORE, DELETED. THE ISSUE CONSIDERED BY MY PREDECESSOR IS SIMILAR I.E. ADVANCES GIVEN TO DTKV WRITTEN OFF. MY PREDECESSOR HAS ANALYSED THAT THE ADVANCES GIVEN WERE FOR THE PURPOSES OF PURCHASE OF TEA WHICH IS REGULAR BUSINESS OF BOTH T HE COMPANIES. ACCORDINGLY, THE WRITE OFF OF ADVANCES WAS ALLOWED U/S 37. RESPECTFULLY FO LLOWING THE SAID DECISION OF MY PREDECESSOR, THE CLAIM OF THE ASSESSEE FOR WRITE OF F OF ADVANCES OF RS. 5,60,07,403/- IS HEREBY ALLOWED AND THE ADDITION MADE BY THE AO IS D ELETED. 6. WE HAVE HEARD THE LD DR. THE FACT NARRATED ABOVE ARE NOT REPRODUCED HEREUNDER FOR THE SAKE OF BREVITY. WE FIND THAT THE LD. CIT(A) HA D PLACED RELIANCE ON THE ORDER PASSED BY THE LD. CIT(A) IN THE CASE OF STEWART HOLL INDIA PVT. LTD. REFERRED TO SUPRA ON THE SIMILAR SET OF FACTS AND CIRCUMSTANCES. WE FIND THA T THE REVENUE HAD PREFERRED AN APPEAL AGAINST THAT ORDER BEFORE THIS TRIBUNAL IN I.T.A. N O. 317/KOL/2016 DATED 15.02.2018 WHEREIN THE APPEAL OF THE REVENUE WAS DISMISSED BY OBSERVING AS UNDER: 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS STATED ABOVE ARE NOT REPEATED H ERE FOR THE SAKE OF BREVITY. THE ASSESSEE, WHO IS IN THE BUSINESS OF TEA HAD ADVANCE D AN AMOUNT OF RS.2.42 CR. TO PROCURE TEA FROM DTKV, WHICH WAS A SISTER CONCERN O F THE ASSESSEE. THIS ADVANCE ACCUMULATED AS ON 31.03.2004 AT RS.2.42 CR. BY AN A GREEMENT DATED 06.12.2013 DTKV HAS BEEN ACQUIRED BY ANOTHER GROUP TOUBRO INFOTECH INDUSTRIES LTD. THE ASSESSEE HAD PRODUCED EVIDENCE TO SHOW THAT AN AMOUNT OF RS.2.42 CR. WAS GIVEN AS TRADE ADVANCE TO THE DTKV TO PROCURE TEA FROM IT. THE ASSESSEE ALSO PRODUCED THE ASSESSMENT ORDER OF AY 2004-05 TO SHOW THAT THE SAID AMOUNT I.E. RS.2.4 2 CR WAS REFLECTED AS PROVISION FOR 6 ITA NO.1772/KOL/2017 M/S GOODRICKE GROUP LTD. A.YR. 2004-05 6 BAD AND DOUBTFUL ADVANCE WHICH WAS DISALLOWED AND A DDED TO THE COMPOSITE INCOME OF THE ASSESSEE. WE NOTE THAT BY ADDUCING EVIDENCE OF GIVING ADVANCE TO DTKV THE GENUINENESS OF THE TRADE ADVANCE CANNOT BE DOUBTED. THE EXPRESSION 'EXPENDITURE' USED IN SEC. 37 OF THE ACT INCLUDES THE AMOUNT WHICH IS REALLY A LOSS AS HELD BY THE HON'BLE APEX COURT IN CIT VS. WOODWARD GOVERNOR INDIA PVT. LTD. 312 ITR 254 (SC). FROM THE AFORESAID FACTS IT IS CLEAR THAT THE AMOUNT OF RS.2 .42 CR. WHICH HAS BEEN ADVANCED TO DTKV HAS NOT BEEN RECOVERED BY THE ASSESSEE AND THE REFORE, THE NON RECOVERY OF ADVANCE IS A BUSINESS LOSS AND SUCH LOSS IS AN EXPE NDITURE COVERED U/S. 37 OF THE ACT. WE NOTE THAT THE LD. CIT(A) HAS TAKEN NOTE OF THE F ACT THAT THE AO OF DTKV AND THE ASSESSEE ARE THE SAME AND, THEREFORE, IN CASE IF TH E AO HAD ANY DOUBT AS TO WHETHER THE ASSESSEE GOT BACK THE AMOUNT IN QUESTION, IT COULD HAVE BEEN EASILY VERIFIED BY HIM. SINCE THE AO HAS NOT MADE ANY ADVERSE FINDING IN TH IS RESPECT AND THERE IS NO EVIDENCE TO SUPPORT THAT DTKV HAS RETURNED THE ADVANCE GIVEN TO IT BY ASSESSEE IN ANY MANNER, THE LOSS OF RS.2.42 CR. IS AN ALLOWABLE EXPENDITURE AND HAS BEEN RIGHTLY ALLOWED BY THE LD. CIT(A) AND WE DO NOT FIND ANY REASON TO INTERFE RE WITH THE ORDER OF THE LD. CIT(A), WHICH IS HEREBY CONFIRMED. THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. WE FIND THAT THE AMOUNT HAS BEEN ADVANCED BY THE AS SESSEE COMPANY TO D&KV IN THE FORM OF ADVANCES OR IN THE FORM OF INVESTMENTS IN I TS REGULAR COURSE OF BUSINESS AND FOR THE PURPOSE OF ITS BUSINESS AND THIS INVESTMENT WAS MADE WAY BACK IN 1993 WHEN D&KV WAS ALSO ENGAGED IN SIMILAR LINE OF BUSINESS. THIS FACT REMAIN UNDISPUTED BEFORE US BY THE REVENUE. IT IS NOT IN DISPUTE THAT M/S D &KV HAD SUFFERED HUGE LOSS AND THE AMOUNT PAYABLE TO THE ASSESSEE COMPANY HAD PRACTICA LLY BECOME IRRECOVERABLE. IT IS NOT IN DISPUTE THAT THE ASSESSEE COULD REALIZE SOME POR TION OF ITS DUES (PREDOMINANTLY GIVEN IN THE FORM OF ADVANCES IN ITS REGULAR COURSE) ONLY BY SALE OF ITS EQUITY HOLDING IN D&KV FOR RS. 2.48 CRORES TO M/S TOUBRO INFOTECH & I NDUSTRIES LTD. HENCE THE ADVANCES WERE GIVEN IN THE NORMAL COURSE OF ITS BUS INESS AND COMMERCIAL EXPEDIENCY THEREON IS PROVED BEYOND DOUBT. WHEN SUCH ADVANCES REMAINED IRRECOVERABLE, WHICH IS ALSO PROVED BEYOND DOUBT, IN THE FACTS AND CIRCUMST ANCES OF THE CASE, THE WRITE OFF OF SUCH IRRECOVERABLE ADVANCES, GENUINELY RESULTED IN BUSINESS LOSS FOR THE ASSESSEE, WHICH WOULD BE SQUARELY ALLOWABLE AS DEDUCTION. 7. IN VIEW OF THE AFORESAID OBSERVATIONS AND RESPEC TFULLY FOLLOWING THE JUDICIAL PRECEDENT RELIED UPON HEREINABOVE, WE FIND NO INFI RMITY IN THE ORDER OF LD. CIT(A) 7 ITA NO.1772/KOL/2017 M/S GOODRICKE GROUP LTD. A.YR. 2004-05 7 DELETING THE DISALLOWANCE MADE BY THE LD. AO. ACCO RDINGLY, THE GROUND NOS. 1 AND 2 RAISED BY THE REVENUE ARE DISMISSED. 8. THE LAST ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE LEASE RENT OF RS. 36,48,000/- PAID TO KOOMBER PROPERTIES & LEASING CO. LTD., IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSES SEE PAID RS. 36,48,000/- AS RENT FOR A PREMISES TAKEN ON RENT FOR THE PURPOSE OF BUSINESS ACTIVITY. THE RENT SO PAID IN EARLIER ASSESSMENT YEARS WERE DISALLOWED BY THE LD. AO AND THE SAME WERE ALLOWED BY THIS TRIBUNAL. SINCE, THE REVENUE HAD PREFERRED FURTHER APPEAL TO HONBLE CALCUTTA HIGH COURT AGAINST THE DECISION OF THIS TRIBUNAL ON THE IMPUGNED ISSUE, IN ORDER TO KEEP THE MATTER ALIVE, THE LD. AO RESORTED TO REPEAT THE DIS ALLOWANCE MADE IN THE SUM OF RS. 36,48,000/-. THE LD. CIT(A) BY PLACING RELIANCE ON THE DECISION OF ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10 DELETED THE DISALLO WANCE MADE THEREON. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD LD. DR. WE FIND THAT THIS ISSUE H AS ALREADY BEEN DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE WHICH IS NOT DISPUT ED BY THE REVENUE BEFORE US. THE DISALLOWANCE HAS BEEN MADE ONLY IN ORDER TO KEEP TH E ISSUE ALIVE AS REVENUE HAS PREFERRED AN APPEAL BEFORE THE HONBLE HIGH COURT. AS ON DATE, THE REVENUE WAS NOT ABLE TO BRING ON RECORD ANY EVIDENCE TO PROVE THAT THE APPEAL PREFERRED BY REVENUE BEFORE THE HONBLE CALCUTTA HIGH COURT HAS BEEN DIS POSED OFF. HENCE IN ORDER TO MAINTAIN JUDICIAL CONSISTENCY, BY FOLLOWING THE ORD ER OF THIS TRIBUNAL IN ASSESSEES OWN CASE, THE RELIEF HAS BEEN GRANTED BY THE LD. CIT(A) WHICH ACT DOES NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY, GROUND NO. 3 RAISED BY T HE REVENUE IS DISMISSED. 8 ITA NO.1772/KOL/2017 M/S GOODRICKE GROUP LTD. A.YR. 2004-05 8 11. GROUND NO. 4 IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 05.09.2018 SD/- SD/- [S.S. GODARA] [ M .BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 05.09.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ACIT, CIRCLE-4(1), KOLKATA, P-7, CHOWRINGHEE SQU ARE, 8 TH FLOOR, KOLKATA-69 2. M/S GOODRICKE GROUP LTD., CAMELLIA HOUSE, 14, G URUSADAY ROAD, KOLKATA-700019. 3..C.I.T(A).- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S