ACIT, Cir-2(2), Kolkata, Kolkata V. M/s Webel Technology Ltd., Kolkata

ITA 1776/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1647 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 07-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: SUTAPA ROYCH OUDHURY
• Keywords: Additional evidence; Bad and doubtful debts
• Section: 143(3); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & HONBLE SHRI M.BALAGANESH, AM ] I.T.A NO. 1776/KOL/20 16 ASSESSMENT YEAR : 2011-1 2 ACIT,CIRCLE-2(2), KOLKATA -VS- M/S WEBEL TECHNO LOGY LTD. [PAN: AAACW 4201 G] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI ARINDAM BHATTA CHARJEE, ADDL. CIT FOR THE REVENUE : SUTAPA ROYCHOUDHURY, ADVOCAT E DATE OF HEARING : 08.01.2018 DATE OF PRONOUNCEMENT : 02.02.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-1, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO.39/CIT)A)- 1/C-2/2014-15 DATED 30.06.2016 AGAINST THE ORDER PA SSED BY THE DCIT,CIRCLE-2, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 14.03.2014 FOR THE ASSESSM ENT YEAR 2011-12. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE TOWARDS PRO VISION FOR DOUBTFUL DEBTS IN THE SUM OF RS. 57,31,137/-, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 ITA NO.1776/KOL/2016 M/S WEBEL TECHNOLOGY LTD. A.YR.2011-12 2 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE FILED ITS RETURN OF INCOME ON 29.09.2011 DISCLOSING TOTAL INCOME OF RS. 1,13,74,9 06/-. IN THE SAID COMPUTATION OF INCOME, THE ASSESSEE HAD SUO-MOTO MADE DISALLOWANCE TOWARDS PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS. 57,31,137/-. THE ASSESSMENT W AS COMPLETED AFTER MAKING ADDITION OF RS. 16,44,472/-TOWARDS PROVISION FOR LEAVE ENCAS HMENT AND DETERMINING THE TOTAL INCOME AT RS. 1,30,19,378/-. BEFORE THE COMPLETION OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME WHER EIN SUO MOTO DISALLOWANCE MADE TOWARDS PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS. 57,31,137/- WAS WITHDRAWN BY THE ASSESSEE, ON THE GROUND THAT THE SAME AMOUNT WAS AL READY ADDED BACK BY THE LD. AO IN THE SCRUTINY ASSESSMENT PROCEEDINGS FOR THE ASSESSM ENT YEAR 2009-10 COMPLETED U/S 143(3) OF THE ACT ON 19.12.2011. THE ASSESSEE ALSO PLEADED THAT THIS PROVISION FOR BAD AND DOUBTFUL DEBTS WAS ORIGINALLY CREATED BY DEBITI NG TO PROFIT AND LOSS ACCOUNT DURING THE ASSESSMENT YEAR 2009-10 WHICH WAS RIGHTLY DISAL LOWED BY THE LD. AO DURING THAT YEAR. SINCE, THIS PROVISION FOR BAD AND DOUBTFUL DE BTS WAS CARRIED FORWARD IN THE BALANCE SHEET OF THE ASSESSEE UP TO ASSESSMENT YEAR 2011-12 , THE ASSESSEE INADVERTENTLY DISALLOWED THE SAME IN THE ORIGINAL RETURN OF INCOM E. THIS WAS LATER FOUND BY THE ASSESSEE AND SINCE THE TIME LIMIT FOR FILING REVISE D RETURN U/S 139(5) OF THE ACT HAD EXPIRED, THE ASSESSEE SOUGHT TO FILE REVISED COMPU TATION OF INCOME BEFORE THE LD. AO WHICH WAS IGNORED BY THE LD. AO. IN FIRST APPEAL, T HE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE ACCEPTING THE BONA FIDE CLAIM THEREON. AGG RIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. WHETHER ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, THE LD. CIT(A)-1, KOLKATA HAS ERRED IN DELETING THE PROVISI ON FOR DOUBTFUL DEBTS OF RS. 57,31,137/- WITHOUT APPRECIATING THE INTENTION OF T HE AO. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT BEFORE PROCEEDING FOR DISA LLOWANCES THE AO HAS CONDUCTED NECESSARY EXAMINATION AND GROUND WORK, WH ICH ARE EVIDENT FROM THE RECORDINGS OF NOTE-SHEET. 3 ITA NO.1776/KOL/2016 M/S WEBEL TECHNOLOGY LTD. A.YR.2011-12 3 3. THAT THE DEPARTMENT CRAVES LEAVE TO ADD, MODIFY OR ALTER ANY OF THE GROUND(S) OF APPEAL AND/OR ADDUCE ADDITIONAL EVIDENCE AT THE TIME OF HEARING OF THE CASE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LEGITIMATE MISTAKE COMMITTED BY TH E ASSESSEE WAS SOUGHT TO BE WITHDRAWN BY WAY OF REVISED COMPUTATION OF INCOME I N ORDER TO AVOID DOUBLE DISALLOWANCE WHICH WAS NOT CONSIDERED BY THE LD. AO . THIS HAS BEEN FAIRLY CONSIDERED BY THE LD. CIT(A) AND LD. CIT(A) HAD RIGHTLY GRANTE D RELIEF TO THE ASSESSEE IN THIS REGARD. WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE LD. CIT(A). ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 02.02.2018 SD/- SD/- [N.V. VASUDEVAN] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED : 02.02.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ACIT, CIRCLE-2(2), AAYAKAR BHAWAN, P-7, CHOWRING HEE SQUARE, KOLKATA-700069. 2. M/S WEBEL TECHNOLOGY LTD., SECTOR-V, SALT LAKE C ITY, KOLKATA-700091. 3..C.I.T.(A)- , KOLKATA 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 4 ITA NO.1776/KOL/2016 M/S WEBEL TECHNOLOGY LTD. A.YR.2011-12 4