SKBG Investment Pvt. Ltd., Kolkata V. ITO, Ward-5(1), Kolkata, Kolkata

ITA 1900/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9309 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 29-09-2016
• Court: TRIBUNAL
• Department Lawyers: SAURAV KUMAR ADLCIT
• Keywords: Additional evidence; Bad and doubtful debts
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, JM, & DR. A.L.SA INI, AM ./ ITA NO.1900/KOL/2016 ( / ASSESSMENT YEAR :2006-2007) SKBG INVESTMENT PVT. LTD C/O RKRR & ASSOCIATES, 5C, MERLIN LINKS, 166B S.P.MUKHERJEE ROAD, 5 TH FLOOR, KOLKATA-700026 VS. ITO, WARD-5(1), AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 ./ ./PAN/GIR NO. : AAFCS 4798 B ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI RAMESH KUMAR PATODIA /REVENUE BY : SHRI SAURAV KUMAR, ADL-CIT / DATE OF HEARING : 16/02/2017 /DATE OF PRONOUNCEMENT 03/03/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO THE ASSESSMENT YEAR 2006-2007, IS DIRECTED AGAINST THE ORDER PASSE D BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLKATA, IN APPEAL NO.791/CIT(A)-2/14-15, DATED 29.07.2016, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER U/S.144 OF TH E INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS THE ACT), DATED 31.12.2008. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY U/S.143(3) OF THE AC T AND THE AO HAS COMPLETED THE ASSESSMENT U/S. 144 OF THE ACT BY MAK ING ADDITION ON ACCOUNT OF INTEREST RECEIVED FROM RADHA FURNISHING OF RS.3,15,177/-. ITA NO.1900/KOL/2016 SKBG INVESTMENT PVT. LTD. 2 3. NOT BEING SATISFIED WITH THE ORDER PASSED BY TH E AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO HAS CONFIRME D THE ORDER PASSED BY THE AO OBSERVING THE FOLLOWINGS :- I HAVE CONSIDERED THE REMAND REPORT OF THE AO AS M ENTIONED ABOVE. KEEPING IN VIEW OF THE ABOVE, THE AO IS DIRE CTED TO DELETE THE ADDITION MADE ON ACCOUNT OF INTEREST INCOME AND THIS GROUND OF APPEAL IS ALLOWED. AS REGARDS TO DISALLOWANCE OF THE LOSS, I HAVE CONS IDERED THE GROUND OF APPEAL AND SUBMISSIONS OF THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT AS WELL AS THE ASSESSMENT ORDER FR AMED IN THE LIGHT OF THE MATERIALS AVAILABLE ON RECORD BEFORE THE ASS ESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. I HAVE COME TO T HE CONCLUSION THAT THE GROUND OF APPEAL AS RAISED BY THE AR OF TH E ASSESSEE IS NOT ARISES OUT OF THE IMPUGNED ASSESSMENT ORDER. IN VIE W OF THE ABOVE, THE GROUND OF APPEAL AS RAISED BY THE AR OF THE ASS ESSEE RELATING TO LOSS IS REJECTED. THIS GROUND OF APPEAL IS DISMI SSED. IN THE RESULT, THE APPEAL OF THE APPELLANT IS PARTL Y ALLOWED. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED BY NO T CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFI CER IN FULL AND SUCH ACTION OF THE LD CIT(A) IS ARBITRARY, UNJU STIFIED, UNWARRANTED AND ILLEGAL. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NO T ALLOWING THE ENTIRE EXPENSES CLAIMED AT RS 5,21,883/- AND RE STRICTING THE SAME TO RS. 3,17,728/-BEING THE INTEREST INCOME DUR ING THE YEAR AND SUCH ACTION OF THE LD CIT(APPEALS) IS ARBITRARY , UNJUSTIFIED UNWARRANTED AND ILLEGAL. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN AR RIVING AT A FINDING THAT THE GROUND OF APPEAL REGARDING THE EXP ENSES CLAIMED DOESN'T ARISE OUT OF THE ASSESSMENT ORDER A ND SUCH FINDING IS ARBITRARY, UNJUSTIFIED AND UNWARRANTED A ND ILLEGAL. 4. FOR THAT THE APPELLANT CRAVES INDULGENCE TO ADD , AMEND, ALTER AND/ OR MODIFY THE GROUNDS ON OR BEFORE THE HEARING OF THE APPEAL. ITA NO.1900/KOL/2016 SKBG INVESTMENT PVT. LTD. 3 5. ALTHOUGH IN THIS APPEAL, THE ASSESSE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT AT THE TIME OF HEARING THE SOLITARY GRIE VENCE OF THE ASSESSE HAS BEEN CONFINED TO THE ISSUE THAT ASSESSE CLAIMED EXP ENSES AT RS. 5,21,883/- BUT LD CIT (A) HAS RESTRICTED UP TO RS. 3,17,728/- 5.1 LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THA T THE LD. CIT(A) DID NOT ALLOW THE ENTIRE EXPENSES CLAIMED BY THE AS SESSEE AT RS.5,21,883/-. THE LD CIT (A) ALLOWED ONLY RS. 3,17 ,728/- OUT OF TOTAL EXPENDITURE AT RS. 5,21,883/-, WHICH IS UNJUSTIFIED . THE LD. AR FOR THE ASSESSEE FURTHER POINTED OUT THAT THE ASSESSEE HAS SHOWN INTEREST INCOME AT RS.3,17,728/- AND HE HAS CLAIMED THE EXPE NDITURE TO THE TUNE OF RS.5,21,883/-. THE EXPENSES OF RS.5,21,883/- INC LUDES RS.5 LAKHS AS BAD DEBTS, WHICH HAS BEEN SHOWN BY THE ASSESSEE AS IRRECOVERABLE AMOUNT FROM RADHA FURNISHINGS. THE BAD DEBTS OF RS. 5 LAKHS WHICH HAS BEEN SHOWN IN ASSESSMENT YEAR 2006-07, HAS BEEN REC OVERED BY THE ASSESSEE IN ASSESSMENT YEAR 2009-2010 AND THE ASSES SEE HAS SHOWN RS.5 LAKHS AS AN INCOME IN THE ASSESSMENT YEAR 2009 -2010 AND PAID THE INCOME TAX THEREON, I.E. THE AMOUNT OF RS.5 LAKHS W HICH HAS BEEN CLAIMED BY THE ASSESSEE AS A BAD DEBT EXPENSES HAS BEEN REC OVERED BY THE ASSESSEE SUBSEQUENTLY IN ASSESSMENT YEAR 2009-2010 AND THE ASSESSEE HAS OFFERED RS. 5 LAKHS FOR THE PURPOSE OF TAXATION AND PAID THE INCOME TAX THEREON. THEREFORE, IF RS.5 LAKHS IS NOT ALLOWE D AS BAD DEBT IN THE ASSESSMENT YEAR 2006-07 THEN IT WOULD AMOUNT TO DOU BLE TAXATION, WHICH IS NOT JUSTIFIABLE. THE ASSESSEE HAS SUBMITTED WRIT TEN SUBMISSIONS BEFORE THE LD. CIT(A) AND REQUESTED TO CONSIDER THE EXPEND ITURE OF RS.5,21,883/-, BUT LD. CIT(A) DID NOT CONSIDER IT AT ALL. ITA NO.1900/KOL/2016 SKBG INVESTMENT PVT. LTD. 4 5.2. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS AGREED THAT SINCE THE ASSESSEE HAS OFFERED RS.5 LAKHS FOR TAXATION PURPOS E IN THE ASSESSMENT YEAR 2009-2010, THEREFORE, BAD DEBTS CLAIMED BY THE ASSESSEE AT RS.5 LAKHS IN THE ASSESSMENT YEAR 2006-07 SHOULD BE ALLO WED. 5.3. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSE SSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. AS LD. AR FOR THE ASSESSEE HAS FAIRLY STATED THAT RS.5,21,883/- IS A EXPENDITURE CLAIMED BY THE ASSESSEE IN HIS PROFIT AND LOSS ACCOUNT WHICH HAS NOT BEEN ALLOWED BY THE AO/CIT(A). THE EXPENDITURE OF RS.5,21,883/- PERTAINS TO THE ASSESS MENT YEAR 2006-07 WHERE THE ASSESSEE HAS SHOWN THE INTEREST INCOME AT RS.3,17,728/-. THE AMOUNT OF EXPENDITURE OF RS.5,21,883/- INCLUDES RS. 5 LAKHS WHICH WAS SHOWN BY THE ASSESSEE AS BAD DEBTS FOR ASSESSMENT Y EAR 2006-07. LATER ON, THE SAID BAD DEBTS OF RS.5 LAKHS HAS BEEN RECOV ERED BY THE ASSESSEE IN ASSESSMENT YEAR 2009-2010 AND THE ASSESSEE HAS O FFERED THE SAME FOR TAXATION AND PAID THE TAXES THEREON. THEREFORE, CONSIDERING THE FACTUAL POSITION, THE BAD DEBTS CLAIMED BY THE ASSESSEE IN ASSESSMENT YEAR 2006-07 AT RS.5,00,000/- SHOULD BE ALLOWED ( WHICH IS INCLUDED IN RS,5,21,883/-), OTHERWISE, IT WOULD TANTAMOUNT TO D OUBLE TAXATION. ACCORDINGLY, WE ALLOW THE APPEAL OF THE ASSESSEE. S INCE THE ASSESSEE HAS SUBMITTED BEFORE US SOME ADDITIONAL EVIDENCES L IKE, THE PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2009-2010, COMPUTA TION OF TOTAL INCOME ITA NO.1900/KOL/2016 SKBG INVESTMENT PVT. LTD. 5 FOR A.Y.2009-10, AND INCOME TAX RETURN ETC. THEREFO RE, WE, DIRECT THE AO TO VERIFY THE INCOME TAX RETURN, BALANCE SHEET AND PRO FIT AND LOSS ACCOUNT OF THE ASSESSE FOR A.Y.2009-10 AND ALLOW THE CLAIM OF RS.5 LAKHS, CLAIMED BY THE ASSESSEE AS BAD DEBTS. IF THE AO FINDS THAT THE ASSESSEE HAS OFFERED RS.5 LAKHS FOR TAXATION IN A.Y.2009-10, (THE SUBSEQ UENT RECOVERED AMOUNT OF BAD DEBTS), THEN HE SHOULD ALLOW THE RELI EF TO THE ASSESSEE. ACCORDINGLY, WE ALLOW THIS APPEAL FOR STATISTICAL P URPOSES. 5.4. IN THE RESULT, APPEAL FILED BY THE ASSESSE, IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 03/03 /2017. S D/ - (S.S.VISWANETHRA RAVI) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 03/03/2017 & ()* /PRAKASH MISHRA ,SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) & ' , / ITAT, KOLKATA 1. / THE APPELLANT-SKBG INVESTMENT PVT. LTD. 2. / THE RESPONDENT.-ITO WARD-5(1), KOLKATA 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//