MATASYA AUTOMOBILE LTD., Alwar V. JCIT, Alwar

ITA 187/JPR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2120 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 25-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L CHANDEL CIT DHK
• Keywords: Business income; Bad and doubtful debts; Competent authority
• Section: 143(3); 28

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 187/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2010-11. M/S. MATSYA AUTOMOBILES LTD., 1646-47, TIJARA ROAD, ALWAR. CUKE VS. THE JCIT, RANGE-1, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABCM 3982 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI S.L. CHANDEL (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17.08.2017. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 24/08/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT (APPEALS), ALWAR DATED 16.12.2014 PERTAINING TO A.Y. 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED CIT APPEALS SERIOUSLY ERRED BY MAKING A DISALLOWANCE OF RS. 19,72,993/- BEING BAD DEBTS OF M/S. ALWAR FARMERS M ACHINERY HOUSE PVT. LTD. DEBITED TO PROFIT & LOSS ACCOUNT WITHOUT CONSI DERING THE FACTS OF THE CASE AND WITHOUT ANY JUSTIFICATION AND COGENT REASO N AND ON WRONG ALLEGATION AND FALSE GROUND. 2. THE LEARNED CIT APPEALS SERIOUSLY ERRED BY NOT CONS IDERING THAT THIS ACCOUNT IS OLD AND THERE WAS NO POSSIBILITY OF RECO VERY OF ANY AMOUNT FROM THEM. FURTHER IN VIEW OF SECTION 36(1)(VII) OF I.T. ACT 1961 ANY BAD DEBT WHICH IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUN TS OF THE ASSESSEE IN THE PREVIOUS YEAR IS ALLOWABLE AS EXPENSES AND EVEN ASS ESSEE FULFILL THE CONDITION OF SEC. 36(2) OF INCOME TAX ACT, 1961. 2 ITA NO. 187/JP/2015 M/S. MATSYA AUTOMOBILES LTD. 3. THE LEARNED CIT APPEALS SERIOUSLY ERRED BY NOT CONS IDERING THAT AMOUNT OF RS. 18,40,000/- GIVEN AS ADVANCE TO M/S. ALWAR FARM ERS MACHINERY HOUSE PVT. LTD. FOR BUSINESS PURPOSE AND NOT CONSIDERED T HE STATEMENT RECORDED OF SH. PRAMOD GUPTA WHO CONFIRM THAT THIS ADVANCE I S GIVEN FOR BUSINESS PURPOSES. 4. THE LEARNED CIT APPEALS SERIOUSLY ERRED BY DISALLOW ING ON WRONG ALLEGATION AND FALSE GROUND THAT BOTH COMPANIES HAV E COMMON DIRECTORS AND SHARE HOLDERS WHILE COMPANY IS ARTIFICIAL PERSO N AND HAVING SEPARATE IDENTITY. BOTH COMPANY ARE HAVING ONLY SOME OF THE DIRECTORS AND SHARE HOLDERS AS COMMON WHICH DOES NOT MEAN THAT SUCH ADV ANCE IS RECOVERABLE. 5. THE LEARNED CIT APPEALS SERIOUSLY ERRED BY NOT CONS IDERING THAT THE ALWAR FARMERS MACHINERY HOUSE PVT. LTD. WAS WIND UP AND M ONEY WAS NOT RECOVERABLE. FURTHER HE HAS WRONGLY ALLEGED THAT IT IS WAIVED OFF BY US WHILE OUR COMPANY HAS NOT WAIVED THIS AMOUNT AND WE ARE NOT CONCERNED IF ALWAR FARMER MACHINERY HOUSE PVT. LTD. WAIVED TH IS AMOUNT. THE FACT IS REMAIN SAME THAT THIS MONEY IS GIVEN FOR BUSINESS P URPOSE AND IT IS NOT RECOVERABLE. 6. THE LEARNED CIT APPEALS SERIOUSLY ERRED BY NOT CONS IDERING THAT IT IS A REVENUE EXPENSES AND IT IS ALLOWABLE U/S 28 OF INCO ME TAX ACT AND MOREOVER INTEREST CHARGED AGAINST THIS ADVANCE IS A LSO ASSESSED AS BUSINESS INCOME IN ASSESSMENT ORDER U/S 143(3) OF E ARLIER YEARS. 7. THE LEARNED CIT APPEALS SERIOUSLY ERRED BY NOT CONS IDERING THE JUDGEMENTS OF HONOURABLE HIGHER COURTS WITHOUT ANY JUSTIFICATION AND VALID REASON AND ON THE OTHER HAND HAS RELIED UPON THE CA SES WHICH ARE NOT RELATED TO THIS CASE AND FACTS ARE TOTALLY DIFFEREN T. 8. THE ORDER OF LEARNED CIT APPEALS IS ARBITRARY, CAPR ICIOUS AND WITHOUT ANY SUBSTANCE AND MATERIAL. 9. THE LEARNED CIT APPEALS SERIOUSLY ERRED BY NOT CONS IDERING THE PLEAS AND SUBMISSION OF THE APPELLANT BEFORE DISALLOWING AND ADDING THE VARIOUS EXPENDITURES TO THE INCOME DECLARED BY THE ASSESSEE . 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMEN T WAS FRAMED VIDE ORDER DATED 15.03.2013 UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). WHILE FRAMING THE ASSESSMENT, THE A O DISALLOWED THE CLAIM OF THE 3 ITA NO. 187/JP/2015 M/S. MATSYA AUTOMOBILES LTD. ASSESSEE OF BAD DEBT IN RESPECT OF THE ADVANCES MAD E TO M/S. ALWAR FARMERS MACHINERY HOUSE PVT. LTD. AGGRIEVED BY THIS, THE A SSESSEE PREFERRED AN APPEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMI SSIONS, REJECTED THE GROUND OF THE ASSESSEE. NOW THE ASSESSEE IS IN FURTHER APPEAL BE FORE THIS TRIBUNAL. 3. THE ONLY EFFECTIVE GROUND IS AGAINST CONFIRMING THE ACTION OF THE AO BY THE LD. CIT (A) IN RESPECT OF DISALLOWING THE CLAIM OF THE ASSESSEE OF RS. 19,72,993/- AS BAD DEBT BEING THE ADVANCE MADE TO M/S. ALWAR FARMERS M ACHINERY HOUSE PVT. LTD. 3.1. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY AR GUED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLOWING THE CLAIM O F THE ASSESSEE. HE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE WRIT TEN SUBMISSIONS OF THE ASSESSEE ARE AS UNDER :- BOTH THE LOWER AUTHORITIES HAVE NOT ALLOWED THE CLAIM OF THE ASSESSEE ON THE PRESUMPTION THAT THE TRANSACTION OF GIVING ADVANCE BY THE ASSESSEE TO M/S. ALWAR FARMERS MACHINERY HOUSE PVT. LTD. IS A COLLUSIVE/SHAM/COLOURABLE DEVICE FOR AVOIDANCE OF P AYMENT OF TAXES. A TRANSACTION CAN BE SAID TO BE COLLUSIVE/SHAM/COLOUR ABLE WHEN IT IS NOT REAL/GENUINE TRANSACTION. IN THE PRESENT CASE ASSES SEE ADVANCED RS. 18,40,000/- TO M/S. ALWAR FARMERS MACHINERY HOUSE P VT. LTD. ON 12.10.2006/ THE ADVANCE WAS GIVEN FOR SETTING UP A SERVICE STATION. AT THE TIME WHEN THE ADVANCE WAS GIVEN, IT CANNOT BE P RESUMED BY ANY STRETCH OF IMAGINATION THAT AFTER FOUR YEARS, THE A SSESSEE AS AN ARRANGEMENT TO AVOID PAYMENT OF TAXES, WOULD WRITE OFF THE AMOUNT AND CLAIM THE SAME AS BAD DEBT. THE BURDEN TO PROOF THAT A TRANSACTION IS COLLUSIVE/SHAM IS ON THE PERSON WHO ALLEGES SO AND SUCH BURDEN HAS TO BE DISCHARGED BY FURNISHING POSITIVE EVIDENCE AND NOT ON HYPOTHETICAL ASSESSMENT OF THE REAL MOTIVE OF TH E ASSESSEE. IN THIS CONNECTION DECISION OF SUPREME COURT IN CASE OF UOI VS. AZADI BACHAO ANDOLAN 263 ITR 706 AND VODAFONE INTERNATIONAL HOLD INGS B.V. VS. 4 ITA NO. 187/JP/2015 M/S. MATSYA AUTOMOBILES LTD. UOI, 341 ITR 1 MAY BE REFERRED. THEREFORE, BY SIMP LY ASSUMING THAT THE TRANSACTION OF ADVANCE GIVEN BY THE ASSESSEE IS COLLUSIVE, THE CLAIM OF THE ASSESSEE CANNOT BE DISALLOWED. FROM THE FACTS ON RECORD IT IS CLEAR THAT ASSESSEE ADVANCED RS. 18,40,000/- TO M/S. ALWAR FARMERS MACHINERY HOUSE P VT. LTD. ON 12.10.2006 FOR SETTING UP A SERVICE STATION. SUCH S ERVICE STATION WAS NOT SET UP AS TATA MOTORS HAS ALLOTTED THE AGENCY O F LIGHT COMMERCIAL VEHICLE TO SOME OTHER PARTY IN FY 2008-09 WHICH WAS EARLIER WITH THE ASSESSEEE. THE FURTHER AMOUNT OF RS. 1,32,993/- DE BITED TO THE ACCOUNT OF M/S. ALWAR FARMERS MACHINERY HOUSE PVT. LTD. IS ON ACCOUNT OF SALE OF GOODS AND INTEREST, INCOME FOR WHICH HAS BEEN CREDITED BY THE ASSESSEE IN THE P&L A/C IN THE RESPECTIVE YEAR AND OFFERED FOR TAX. IT IS NOT IN DISPUTE THAT M/S. ALWR FARMERS MACHINE RY HOUSE PVT. LTD. HAS BEEN WOUND UP. WHETHER THE WOUNDING UP IS VOLUN TARY OR UNDER THE SIMPLIFIED EXIT SCHEMES OR WHETHER THE DEBT IS WAIVED OFF OR NOT RECOVERED DOES NOT MAKE ANY DIFFERENCE SO FAR AS TH E CLAIM OF THE ASSESSEE IS CONCERNED. THE FACT REMAINS IS THAT THE AMOUNT COULD NOT BE RECOVERED AND THEREFORE THE SAME IS TO BE ALLOWE D AS BAD/BUSINESS LOSS AS THEY CASE MAY BE. THEREFORE, VARIOUS OBSERV ATIONS MADE BY THE LOWER AUTHORITIES IN THIS REGARD IS NOT RELEVANT IN AS MUCH AS THE CLAIM OF THE ASSESSEE IS ALLOWABLE U/S 28/36(1)(VII). IN VIEW OF ABOVE, THE DISALLOWANCE CONFIRMED BY LD. CIT (A) IS UNJUSTIFIED AND BE DELETED. 3.2. THE LD. D/R OPPOSED THE SUBMISSIONS AND SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE TRANSACTIO NS DO NOT INSPIRE CONFIDENCE AS THE ASSESSEE ITSELF HAD WAIVED OFF ITS CLAIM BEFORE THE COMPETENT AUTHORITY IN THE WINDING UP PETITION FILED AGAINST THE DEBTOR. THE ASSESSEE CANNOT BE GIVEN BENEFIT AS FROM THE RECORDS IT IS CLEAR THAT THE ADVANCES S O MADE TO THE RELATED PARTIES AND 5 ITA NO. 187/JP/2015 M/S. MATSYA AUTOMOBILES LTD. TREATING THE SAME AS BAD DEBT AGAINST THE TAXABLE R ECEIPTS THUS REDUCING THE TAXABLE PROFIT. 3.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE LD. CIT (A) HAS DECIDED THE ISSUE BY O BSERVING AS UNDER :- 4.3. I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 19,72,993/- HAS BEEN MADE BY THE AO ON ACCOUNT OF CLAIM OF BAD DEBT S MADE BY THE COMPANY. AO HAS GIVEN DETAILED REASONS AND CONDUCTE D EXTENSIVE ENQUIRIES BEFORE MAKING THE DISALLOWANCE ON THIS GR OUND. THE FACTS AND DETAILS OF THE GROUNDS FOR MAKING THE DISALLOWANCE ARE DISCUSSED BY THE AO FROM PAGE 2 TO PAGE 25 OF THE ASSESSMENT ORD ER, WHICH HAVE BEEN REPRODUCED ABOVE FOR THE SAKE OF CONVENIENCE. 4.4. THE APPELLANT HAS STATED THAT IT IS AN AUTHORI ZED DEALER OF TATA MOTORS LTD. FOR HEAVY COMMERCIAL VEHICLES LIKE TRUC K, TRAILOR ETC. OF ALWAR, BHARATPUR, DHOLPUR, KAROLI & SAWAIMADHOPUR D ISTRICT. THE TOTAL TURNOVER OF THE COMPANY WAS RS. 131.40 CRORE DURING THIS FINANCIAL YEAR. THE COMPANY IS HAVING DEALINGS WITH M/S. ALWA R FARMERS MACHINERY HOUSE PVT. LTD. AND SOLD GOODS OF RS. 221 62 AND ADVANCED TO THEM RS. 1840000 TO ACQUIRE SERVICE FACILITY FOR OUR VEHICLES WHICH ARE SOLD BY US IN FY 2006-07. 4.5. THE APPELLANT HAS STATED THAT AN AMOUNT OF RS. 18,40,000/- WAS GIVEN AS AN ADVANCE IN FY 2006-07 TO M/S. ALWAR FAR MERS MACHINERY HOUSE PVT. LTD. THIS ADVANCE WAS GIVEN TO SET UP A SERVICE CENTRE FACILITY FOR THE VEHICLES SOLD BY THE APPELLANT. AP ART FROM THIS, THE APPELLANT SOLD GOODS OF RS. 22,162 IN FY 2006-07 TO THE SAME COMPANY. AN MOU WAS ALSO ENTERED BY THE APPELLANT V IDE AGREEMENT DATED 01.09.2006 WITH THE SAME COMPANY. NO PAYMENT WAS RECEIVED FROM THE SAID COMPANY AND ALSO NO FACILITY OF SERVI CE CENTRE COULD BE SET UP BY THE SAID COMPANY AND THEREFORE INTEREST O F RS. 94,389/- WAS CHARGED BY THE APPELLANT IN FY 2007-08 ON WHICH TDS OF RS. 21,389/- HAS ALSO BEEN DEDUCTED. THIS INTEREST INCOME HAS BE EN SHOWN BY THE APPELLANT IN FY 2007-08 IN THE P&L A/C. THE AMOUNT OUTSTANDING FROM THE PARTY HAS BEEN SHOWN AS DEBTORS IN THE BOOKS OF ACCOUNTS. 4.6. THE APPELLANT HAS FURTHER STATED THAT EFFORTS WERE MADE TO RECOVER THE AMOUNT FROM M/S. ALWAR FARMERS MACHINER Y HOUSE PVT. LTD. BUT THE SAID COMPANY BECAME INSOLVENT AND HAD FILED A WINDING UP PETITION BEFORE THE ROC. ACCORDINGLY, THE AMOUNT CO ULD NOT BE RECOVERED FROM THE SAID COMPANY AND THEREFORE HAS B EEN CLAIMED AS BAD DEBTS IN THE PERIOD UNDER CONSIDERATION. 6 ITA NO. 187/JP/2015 M/S. MATSYA AUTOMOBILES LTD. 4.7. HAVING CONSIDERED THE MATERIAL AVAILABLE ON RE CORD, I FIND THAT THE TOTAL BAD DEBTS OF RS. 30.02 LACS WERE CLAIMED BY THE APPELLANT FOR THE PERIOD UNDER CONSIDERATION AND OUT OF THIS AO H AS MADE ONLY THE DISALLOWANCE OF RS. 19,72,993/-. HOWEVER, THERE IS NO DISPUTE AS REGARDS THE FOLLOWING FACTS ARE CONCERNED :- (I) TH AT AN AMOUNT OF RS. 18,40,000 WAS GIVEN BY THE APPELLANT TO M/S. ALWAR FARMERS MACHINERY HOUSE PVT. LTD. BY CHEQUE AFTER SIGNING AN AGREEMEN T WITH M/S. ALWAR FARMERS MACHINERY HOUSE PVT. LTD. (II) THE RECIPI ENT COMPANY HAS COMMON DIRECTORS AND SHAREHOLDERS AS OF THE APPELLA NT COMPANY. ALL THE MALE DIRECTORS OF BOTH THE COMPANIES ARE SAME. (III) THAT BOTH THE COMPANIES ARE CLOSELY HELD COMPANIES AND ARE PRIMAR ILY FAMILY OWNED AND MANAGED COMPANIES. BOTH THE COMPANIES BELONG TO THE SAME FAMILY. THEREFORE, THE ACTUAL STATES OF AFFAIRS OF WORKING OF BOTH THE COMPANIES ARE KNOWN TO THE DIRECTORS AND SHAREHOLDERS. (IV) THAT THE RECIPIENT COMPANY HAS FAILED TO USE E VEN A SINGLE PENNY FOR THE PURPOSES FOR WHICH THE FUNDS WERE OBTAINED I.E. FOR SETTING UP OF A SERVICE CENTRE FACILITY FOR THE VEHICLES. (V) THAT THE RECIPIENT COMPANY HAS USED THE FUNDS F OR ADVANCING A LOAN TO ANOTHER GROUP CONCERN OF THE SAME FAMILY I. E. M/S. APOORVA AUTOMOBILES ( A PARTNERSHIP FIRM CONSISTING OF SAME PERSONS). THE FUNDS HAVE BEEN UTILIZED BY M/S. APOORVA AUTOMOBILE S TO PAY ITS DUES OVERDRAWN FROM ITS BANK. 4.8. I HAVE CAREFULLY EXAMINED THE MATERIAL PLACED ON RECORD AND FIND THAT AO HAD COLLECTED THE INFORMATION FROM THE ROC OFFICE AT JAIPUR AND A STARTLING REVELATION WAS MADE THAT THE DEBTOR COMPANY M/S. ALWAR FARMERS MACHINERY HOUSE PVT. LTD. HAD NOT BEC OME INSOLVENT BUT HAD RATHER APPLIED FOR WINDING UP OF THE COMPAN Y BY FILING AN APPLICATION WITH THE ROC UNDER THE SIMPLIFIED EXIST SCHEME. THE DOCUMENTS RECEIVED FROM THE ROC OFFICE CLEARLY REVE AL THAT THE APPELLANT I.E. M/S. MATSYS AUTOMOBILES PVT. LTD. HA S FILED AN AFFIDAVIT STATING THAT DEBT OF RS. 19,72,993/- DUE FROM M/S. ALWAR FARMERS MACHINERY HOUSE PVT. LTD. HAS BEEN WAIVED OFF. THE APPLICATION FOR WINDING UP FILED BY M/S. ALWAR FARMERS MACHINERY HO USE PVT. LTD. BEFORE THE ROC IS A VOLUNTARY ACTION AND CAN NOT BE CLASSIFIED AS A COMPANY BECOMING INSOLVENT. THEREFORE, THERE IS NO QUESTION LEFT FOR MAKING A CLAIM OF THE DEBT HAVING BECOME BAD. THIS ACTION OF CLAIM OF BAD DEBTS IS ONLY AIMED AT DEFEATING THE REVENUE FO R PURPOSE OF PAYMENT OF RIGHTFUL TAXES. THE PATTERN OF OWNERSHIP AND THE LIST OF DIRECTORS, AS IS CLEAR FROM THE CHART GIVEN IN THE ASSESSMENT ORDER, OF BOTH THE COMPANIES MAKES IT QUITE OBVIOUS THAT THE CLAIM OF BAD DEBTS AND WINDING UP OF THE COMPANY HAS BEEN A TOOL OF DE SIGN. 4.9. FURTHER, I FIND THAT THE CLAIM OF THE APPELLAN T FOR HAVING A BAD DEBT IS NOT SUSTAINABLE UNDER THE PROVISIONS OF THE INCOME TAX ACT, AS SALE OF GOODS OF ONLY RS. 22,162 HAS BEEN MADE TO M /S. ALWAR FARMERS 7 ITA NO. 187/JP/2015 M/S. MATSYA AUTOMOBILES LTD. MACHINERY HOUSE PVT. LTD. OUT OF THE TOTAL OUTSTAND ING AMOUNT OF RS. 19,72,993. AN AMOUNT OF RS. 18,40,000 HAS BEEN GIV EN AN ADVANCE AND HAS NOT BEEN BOOKED AS SALES IN THE PROFIT AND LOSS ACCOUNT OF THE COMPANY. THE AMOUNT OF LOSS SUFFERED ON ACCOUNT OF NON RECEIPT, EVEN IF IT IS TO BE ALLOWED THEORICALLY/ACADEMICALLY SPE AKING, CAN NOT BE BOOKED AS A REVENUE EXPENSE IN THE ACCOUNTS. NO CRE DIT COULD BE GIVEN TO THE APPELLANT FOR THE DEBT WHICH HAS ARISEN ON A CCOUNT OF SALES OF RS. 22,162 AND INTEREST OF RS. 94,389 WHICH HAS BEE N DECLARED IN THE P & L A/C, FOR THE REASON THAT THE DEBT HAS BEEN WAIV ED OFF BY THE APPELLANT RATHER THAN IT BECOMING BAD. 4.10. THE APPELLANT HAS FAILED TO FURNISH ANY EVIDE NCE IN THIS REGARD TO CONTRADICT THE FINDINGS GIVEN BY THE AO IN THE COUR SE OF APPELLATE PROCEEDINGS. THE CASE LAWS CITED BY THE APPELLANT A RE FOUND TO BE DISTINGUISHABLE ON FACTS AND HENCE ARE NOT APPLICAB LE. THE ONUS OF FURNISHING AN EVIDENCE WITH REGARD TO THE DEBTS BEC OMING BAD MAY NOT BE REQUIRED TO BE FURNISHED AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD. BUT THIS CASE BEING UNIQUE IN THE SENSE THAT IT IS IN THE NATURE OF A COLLUSIVE TRANSACTION, WHEREIN THE CREDITOR HAVE WAIVED OFF THE DEBTS VOLUNTARILY BECAUSE THE DEBTOR COMPAN Y BEING FROM THE SAME FAMILY. 4.11. THE HONBLE DELHI HIGH COURT HAS IN THE CASE OF CIT VS. M/S. NAVODAYA CASTLES PVT. LTD. REPORTED IN 109 DTR (DEL .) 109, ON PAGE 118 OF THE JUDGMENT, HAS STATED THOUGH IN A DIFFERE NT CONTEXT AND REPRODUCED THE OBSERVATIONS MADE BY THE HONBLE COU RT EARLIER IN THE CASE OF NR PORTFOLIO PVT. LTD. THAT .THAT IN CA SE OF PVT. LT6D. COMPANIES, GENERALLY PERSONS KNOWN TO DIRECTORS OR SHAREHOLDERS, DIRECTLY OR INDIRECTLY, BUY OR SUBSCRIBE TO SHARES. UPON RECEIPT OF MONEY, THE SHARE SUBSCRIBERS DO NOT LOSE TOUCH AND BECOME INCOMMUNICADO. CALL MONEY, DIVIDENDS, WARRANTS ETC. HAVE TO BE SENT AND THE RELATIONSHIP REMAINS A CONTINUING ONE. THE FINAL CONCLUSION MUST BE PRAGMATIC AND PRACTICA L, WHICH TAKES INTO ACCOUNT HOLISTIC VIEW OF THE ENTIRE EVIDENCE . 4.12. IN THIS CASE, IT IS NOT THE CASE OF THE APPEL LANT THAT THE SHAREHOLDERS AND THE DIRECTORS OF THE APPELLANT COM PANY AND THE RECIPIENT COMPANY ARE NOT KNOWN TO EACH OTHER AND D O NOT BELONG TO THE FAMILIES WHICH ARE CLOSELY RELATED TO EACH OTHE R. THEREFORE, THE FILING OF AN AFFIDAVIT BY THE DIRECTOR OF THE APPEL LANT COMPANY BEFORE THE ROC THAT THE DEBT DUE FROM M/S. ALWAR FARMERS M ACHINERY HOUSE PVT. LTD. HAS BEEN WAIVED OFF AND THEREAFTER MAKING A CLAIM FOR BAD DEBTS IS NOTHING BUT A TOOL TO AVOID THE PAYMENT OF TAXES. AO HAS CONDUCTED ELABORATE ENQUIRIES AT THE STAGE OF ASSES SMENT AND PROVED BEYOND DOUBT THAT INTENTION OF THE APPELLANT AND TH E DEBTOR COMPANY HAD NEVER BEEN TO DO THE TRANSACTION AS HAS BEEN ST ATED IN THE 8 ITA NO. 187/JP/2015 M/S. MATSYA AUTOMOBILES LTD. AGREEMENT AND IT STANDS SUBSTANTIATED FROM THE PURP OSE FOR WHICH THE FUNDS HAVE BEEN UTILIZED. 4.13. IN VIEW OF THE ABOVE DISCUSSION, I CONFIRM TH E ADDITION OF RS. 19,72,993/- MADE BY THE AO UNDER THIS HEAD. THE LD. COUNSEL FOR THE ASSESSEE LAID GREAT EMPHASI S ON THE FACT THAT THE ASSESSEE COMPANY RECEIVED INTEREST AND OFFERED SAME FOR TAXA TION. HE URGED THAT IT WAS A GENUINE BUSINESS TRANSACTION AND CANNOT BE TREATED AS A COLOURABLE DEVICE TO AVOID TAX LIABILITY. WE HAVE GIVEN OUR THOUGHTFUL CONSID ERATION TO THE FACT OF THE PRESENT CASE, IF WE ACCEPT THIS CONTENTION OF THE ASSESSEE IT WOULD LAY A WRONG PRECEDENCE. IN EVERY CASE THE ASSESSEE WOULD ADVANCE MONEY TO I TS SISTER CONCERN AND AFTER SOME HELP IN WINDING UP OF SISTER CONCERN BY WAIVIN G OF THE DEBT. A GOOD DEBT CANNOT BE ALLOWED TO BE GIVEN COLOUR OF BAD DEBT. T HEREFORE, WE DO NOT SEE ANY REASON TO DISTURB THE FINDING OF THE LOWER AUTHORIT IES. THE GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/08/20 17. SD/- SD/- FOE FLAG ;KNO DQY HKKJR (VIKRAM SINGH YADAV) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24/08/2017. DAS/ 9 ITA NO. 187/JP/2015 M/S. MATSYA AUTOMOBILES LTD. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. MATSYA AUTOMOBILES LTD., ALWAR. 2. IZR;FKHZ@ THE RESPONDENT- THE JCIT RANGE-1, ALWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO.187/JP/2015} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR