Shri Piyushbhai Gordhanbhai Patel, Baroda V. Dy.Commissioner of Income Tax, Circle-1(2), Baroda

ITA 1909/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0947 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 10-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Bad and doubtful debts; Corroborative evidences; Tax effect
• Section: 143(3); 2(14); 43; 37; 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, ABENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NOS.1909 TO 1911/AHD/2018 / ASSTT. YEARS:(2012-2013 TO 2014-15) SHRI PIYUSHBHAI G PATEL, , N.H. NO.08, NEAR DHARA PETROL PUMP, AT VEMALI, VADODARA-390024. PAN: ADZPP9289N VS. D .C I.T. , CIRCLE-1(2), VADODARA. ( APPLICANT ) ( RESPON D ENT ) ASSESSEE BY : SHRI MANISH J. SHAH REVENUE BY : SHRI L.P. JAIN , SR.D. R /DATE OF HEARING : 06/02/2020 /DATE OF PRONOUNCEMENT: 01/06/2020 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEALS HAVEBEEN FILED AT THE INSTANC E OF THE ASSESSEE AGAINST THE SEPARATE ORDERS OF THE LEARNEDCOMMISSIO NER OF INCOME TAX(APPEALS)- 5, VADODARA,OF EVEN 28/06/2018 (IN SHORT LD.CIT(A) ) ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S.143(3)OF THE INCOME TAX ACT, 1961 (HERE-IN- AFTER REFERRED TO AS 'THE ACT') RELEVANT TO THE ASS ESSMENT YEARS2012-2013 TO 2014-15. ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 2 FIRST WE TAKE UP ITA NO.1909/AHD/2018 FOR A.Y. 2012 -13.THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL. 1. ORDER PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW AS WELL AS ON FACTS. 2. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISALLOWING CLAIM OF BAD DEBTS TO THE TUNE OF RS.675359.00. HE OUGHT TO HAVE ALLOWED THE SAME CONSIDERING FACTS OF THE CASE. 3. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THE FACT THAT IN A.Y.2011.12, COMMISSIONER OF INCOME TAX (APPEALS) A LLOWED OUR CLAIM OF BAD DEBTS THOUGH FACTS OF BOTH THE YEARS WERE IDENTICAL. 4. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO CONSIDER THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) OF A.Y.2011.12 ALLOWING MY CLAIM OF BAD DEBTS ON THE IDENTICAL FACTS. 5. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ALLOWING OUR ALTERNATE ARGUMENT THAT IF DEBT WRITTEN OFF IS NOT ALLOWED AS BAD DEBT THEN THE SAME BE ALLOWED AS BUSINESS LOSS U/S 37(1). YOUR HONOUR PETITIONER CRAVES LEAVE TO ADD, ALTER O R AMEND ABOVE GROUNDS OF APPEAL AT OR BEFORE FINAL HEARING OF THE APPEAL. 2. THE ONLY EFFECTIVE ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCES OF BAD DEBT A MOUNTING TO RS. 6,75,359/- DESPITE THE FACT THAT CLAIM OF BAD DEBT FOR THE A.Y . 2011-12 HAS BEEN ALLOWED IN SIMILAR FACT AND CIRCUMSTANCES. 3. BRIEFLY STATED FACT IS THAT THE ASSESSEE IS AN I NDIVIDUAL AND PROPRIETOR OF THE M/S V.G. AUTOMOBILE. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION CLAIMED DEDUCTION OF BAD DEBT FOR RS. 39,16,563/-. DURING A SSESSMENT PROCEEDING THE ASSESSEE CLAIMED THAT THE DEBTOR BELONGS TO F.Y. 19 99-00 TO 2008-09. FOR THIS PURPOSE THE ASSESSEESUBMITTED NAME WISE AND YEAR WI SE DETAIL ALONG WITH AUDITED BALANCE SHEET EACH YEAR AND LEDGER ACCOUNT EXCEPT F OR THE F.Y. 1999-2000 & 2000-2001. ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 3 3.1 ACCORDINGLY THE AO HELD THAT THE ASSESSEE FAILE D TO PROVE THAT THE BAD DEBT PERTAINING TO A.Y. 1999-2000 AND 2000-2001FOR RS. 6 ,75,359/- HAS BEEN OFFERED TO TAX IN EARLIER YEAR. THUS THE AO DISALLOWED THE SAM E AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE L EARNED CIT (A). 4. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTE D THAT BAD DEBT CLAIMED BY HIM PERTAINING TO F.Y 1999-2000 & 2000-2001 ARE GENUINE AND BONA-FIDE AS THE SAME HAS BEEN SHOWN IN THE AUDITED ACCOUNT. THE ASSESSEE HAS ALSO FILLED CORROBORATIVE EVIDENCES SUCH AS NAME AND YEAR WISE DETAIL OF BAD DEBTS, LIST OF DEBTOR OF RESPECTIVE YEAR FROM AUDITED ACCOUNTS CON TAINING NAME OF SUCH DEBTOR. FURTHER THE SAME HAS BEEN ACCEPTED BY THE AO WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT, FOR THE A.Y. 2006- 07 AND 2007-08. THE ASSESSEE ALSO SUBMITTED THAT SIMILAR DEDUCTION FOR THE A.Y. 2011-12 HAS BEEN ALLOWED THE LEARNED CIT (A). THEREFORE IT CANNOT BE SAID THAT T HE ASSESSEE HAS NOT PROVIDED EVIDENCES WITH REGARD TO SUCH BAD DEBT. HOWEVER THE COPIES OF THE LEDGERS HAVE NOT BEEN PROVIDED BECAUSE IT IS NOT AVAILABLE WITH ASSESSEE BECAUSE OF LAPSE OF CONSIDERABLE PERIOD OF TIME. IN THESE FACTS & CIRCU MSTANCES THE EVIDENCE SHOULD BE VIEWED AS PER CIRCUMSTANTIAL HUMAN PROBABILITY T HEORY AS HELD BY THE HONBLE APEX COURT IN THE CASE OF SUMATIDAYAL VS. CIT REPOR TED IN 214 ITR 801. 4.1 THE ASSESSEE FURTHER CONTENDED THAT IF THE SAME IS NOT ALLOWED AS BAD DEBT THEN THE SAME SHOULD BE ALLOWED AS BUSINESS EXPENSE S UNDER SECTION 37 OF THE ACT. THE ASSESSEE IN THIS REGARD PLACED HIS RELIANC E ON THE JUDGMENT OF HONBLE KARNATKA HIGH COURT IN CASE OF TRAVANCORE TEA ESTAT E CO. LTD VS. CIT 197 ITR 528 AND ORDER OF KOLKATA ITAT IN CASE OF DCIT VS. M/S L INDE INDIA LTD. ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 4 4.2 THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMI SSION OF THE ASSESSEE AND ASSESSMENT ORDER CONFIRMED THE ORDER OF THE AO BY O BSERVING AS UNDER: 4.2.1 THE LD. AR HAS ARGUED THAT THE AO CANNOT ASK FOR DETAILS BEYOND 6 YEARS U/S. 149 AND EVEN U/S. 153A, RETURNS ARE TO BE FILED ONLY FO R 6 YEARS. THESE ARGUMENTS ARE BASELESS BECAUSE THE AO ON HIS OWN HAD NOT DEMANDED ANY DETA ILS. IN FACT, IT IS THE APPELLANT WHO HAS CLAIMED BAD DEBTS FOR THE PERIOD BEYOND SIX YEA RS AND HENCE BURDEN IS CAST UPON HIM TO JUSTIFY HIS CLAIM. MOREOVER, THERE IS NO PROVISI ON UNDER THE ACT FOR WAIVER OF CONDITIONS MENTIONED U/S. 36(2) IN OLD CASES. IN THE CASE OF CIT VS. LALWOOLLEN& SILK MILLS (P) LTD. (2011) 333 ITR 254 (P&H), IT HAS BEEN CLEARLY HELD THAT FORCLAIMING DEDUCTION U/S. 36(L)(VII), CONDITIONS OF SECTION 36(2) MUST B E SATISFIED I.E ASSESSEE OUGHT TO HAVE DEPICTED THAT THE DEBT UNDER REFERENCE WAS SHOWN AS INCOME D URING EARLIER YEARS, 4.2.2 THE LD. AR HAS ALSO FILED ANOTHER REPLY IN TH E DAK ON 27.06.2018 STATING THAT THE FAVOURABLE ORDER OF CIT(A) IN AY 2011-12 HAS BEEN U PHELD BY THE HON'BLE ITAT VIDE ORDER DATED 14.09.2017 CONTAINED IN ITA NO.3114/AHD/2Q14 AND HENCE APPEAL SHOULD BE ALLOWED IN THIS YEAR ALSO. THIS ARGUMENT IS NOT ACC EPTABLE BECAUSE THE ORDER OF CIT(A) CANNOT BE CONSIDERED AS A BINDING PRECEDENT. MOREOV ER, THE CONDITIONS OF S.36(L)(VII) R.W.S 36(2) HAVE TO BE SATISFIED IN EACH ASSESSMENT YEAR INDEPENDENTLY OF ANY OTHER YEAR. THE HON'BLE ITAT HAS SIMPLY DISMISSED THE APPEAL OF REV ENUE ON ACCOUNT OF LOW TAX EFFECT WITHOUT DECIDING THE ISSUE ON MERITS & HENCE THE SA ME CAN HAVE NO EFFECT OH THE PRESENT APPELLATE PROCEEDINGS. 4.2.3 THE LD. AR HAS ALSO MADE ALTERNATIVE ARGUMENT S THAT THE BAD DEBTS WRITTEN OFF MAY BE ALLOWED AS BUSINESS LOSS. IN THIS REGARD, IT IS TO BE STATED THAT FOR CLAIMING BUSINESS LOSS, THE APPELLANT HAS TO FIRSTLY PROVE THAT THE T RANSACTIONS IN QUESTION WERE PERTAINING TO THE TRADING TRANSACTIONS CARRIED OUT IN ORDINARY CO URSE OF BUSINESS AND SECONDLY, HE HAS TO ALSO ESTABLISH THAT SUCH DEBTS HAVE ACTUALLY BECOME BAD AND ALSO ARE NOT RECOVERABLE. THIRDLY, HE HAS TO ALSO ESTABLISH EFFORTS MADE TO R ECOVER SUCH DEBTS. MERE WRITING OFF ENTRIES IN BOOKS OF A/C IS NOT SUFFICIENT FOR CLAIM ING BUSINESS LOSS. UNDISPUTEDLY, ABOVE CONDITIONS ARE NOT SATISFIED AS NO DOCUMENTARY EVID ENCES HAVE BEEN FURNISHED EXCEPT A LIST OF PERSONS WITH AMOUNT WRITTEN OFF. 4.2.4 THUS, IN VIEW OF THE ABOVE FACTUAL & LEGAL PO SITION, I HOLD THAT AO HAS RIGHTLY DISALLOWED PART OF THE BAD DEBTS AMOUNTING TO RS.6, 75,359/-. HENCE, DISALLOWANCE MADE IS CONFIRMED AND GROUND NO.2 IS DISMISSED. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNN ING FROM PAGES 1 TO 109 AND SUBMITTED THAT THE ASSESSEE IS UNABLE TO PRODUC E THE LEDGER ACCOUNTS OF THE PARTIES PERTAINING TO THE FINANCIAL YEARS 1999-2000 AND 2000-2001 DUE TO THE FACT THAT THESE WERE RELATING TO THE OLD PERIOD. THEREFO RE THE ASSESSEE WAS UNABLE TO JUSTIFY THE YEAR IN WHICH SUCH AMOUNT OF BAD DEBTS WAS OFFERED TO TAX BASED ON THE DOCUMENTARY EVIDENCE. HOWEVER, THE LEARNED AR C ONTENDED THAT THE ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 5 ASSESSEES BOOKS OF ACCOUNTS FOR THE ASSESSMENT YEA RS 1999-2000 AND 2000-2001 WERE DULY AUDITED AND SUCH BAD DEBTS CLASSIFIED UND ER THE HEAD SUNDRY DEBTORS WHICH EVIDENCES THAT THE IMPUGNED BAD DEBTS WAS OFF ERED TO TAX IN THE RELEVANT ASSESSMENT YEARS. 6. ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPP ORTED THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS CLAIMED THE BAD DEBTS AMOUNTING TO RS. 39,16,563/- UNDER SECTION 36(1)(VIIA) OF THE ACT BUT FAILED TO FILE THE EVIDENCES TO PROVE W ITH RESPECT TO THE BAD DEBTS AMOUNTING TO RS. 6,75,359/- PERTAINING TO F.Y. 199 9-00 AND 2000-01 WHETHER THESE WERE OFFERED TO TAX IN THE EARLIER YEARS AS M ANDATED UNDER SECTION 36(2) OF THE ACT. THEREFORE THE CLAIM OF THE ASSESSEE FOR RS . 6,75,359/- WAS DENIED BY THE AO WHICH WAS SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT (A). 7.1 ADMITTEDLY, THE ONUS LIES ON THE ASSESSEE TO PR OVE THAT HE HAS OFFERED THE BAD DEBTS CLAIMED BY HIM AS INCOME IN THE INCOME TA X RETURN. BUT THE ASSESSEE IN THE CASE ON HAND HAS FAILED TO DO SO. HOWEVER, WE N OTE THAT THE ASSESSEE HAS CLASSIFIED THE IMPUGNED BAD DEBTS AS SUNDRY DEBTORS IN HIS AUDITED BALANCE SHEET WHICH IS PLACED ON PAGES 10 TO 17 OF THE PAPER BOOK . THE SAME AMOUNT WAS SHOWN UNDER THE HEAD SUNDRY DEBTORS IN ALL THE ASSE SSMENT YEARS TILL THE ASSESSMENT YEAR UNDER CONSIDERATION IN WHICH THE AS SESSEE HAS WRITTEN OFF SUCH SUNDRY DEBTORS AS BAD DEBTS. AS PER THE ACCOUNTING PRACTICE SUNDRY DEBTORS REPRESENTS THE SALES MADE BY THE ASSESSEE. THUS IT IS TRANSPIRED THAT BAD DEBTS WRITTEN OF REPRESENTS THE SALES MADE BY THE ASSESSE E IN THE F.Y. 1999-2000 AND 2000-2001 WHICH WAS OFFERED TO TAX. THOUGH, IN THE PRESENT FACTS AND CIRCUMSTANCES, THE ASSESSEE DOES NOT HAVE ANY DIREC T EVIDENCE IN SUPPORT OF HIS CONTENTION THAT THESE BAD DEBTS WERE OFFERED TO TAX IN THE RESPECTIVE ASSESSMENT YEARS, BUT THE CIRCUMSTANTIAL EVIDENCES IN THE FORM OF AUDITED FINANCIAL STATEMENTS ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 6 CANNOT BE NEGLECTED WHEREIN THE ASSESSEE HAS CLASSI FIED SUCH BAD DEBTS AS THE DEBTORS. IN THIS CONNECTION WE DRAW SUPPORT AND GUI DANCE FROM THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SUMATIDAYA L VS. CIT REPORTED IN 214 ITR 801 WHEREIN IT WAS HELD AS UNDER: IT IS, NO DOUBT, TRUE THAT IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME, THE BURDEN LIES ON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION AND IF A RECEIPT IS IN THE NATURE OF INCO ME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN EXEMPTION PROVI DED BY THE ACT LIES UPON THE ASSESSEE. BUT IN VIEW OF SECTION 68, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR, THE SAME MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACTORY. IN SUCH CASE THERE IS PRIMA FACIE EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY, AND IF HE FAILS TO REBUT THE SAME, THE SAID EVIDENCE BEING UNREBUTTED, CAN BE USED AGAINST HIM BY HOLDING THAT IT IS A RECEIPT OF AN INCOME NATURE. WHILE CONSIDERING THE EXPLANAT ION OF THE ASSESSEE, THE DEPARTMENT CANNOT, HOWEVER, ACT UNREASONABLY. IN THE INSTANT CASE, THE AMOUNT WAS CREDITED IN CAP ITAL ACCOUNT IN THE BOOKS OF THE APPELLANT. THE APPELLANT HAD OFFERED HER EXPLANATIO N ABOUT THE SAID RECEIPTS BEING HER WINNINGS FROM RACES. THE SAID EXPLANATION HAD B EEN CONSIDERED IN THE LIGHT OF THE SWORN STATEMENT OF THE APPELLANT AND OTHER MATE RIAL ON RECORD THE ITO AND THE AAC HAD NOT ACCEPTED THE EXPLANATION OFFERED BY THE APPELLANT. THE TWO MEMBERS CONSTITUTING THE MAJORITY IN THE SETTLEMENT COMMISSION HAD ALSO TAKEN THE SAME VIEW. THERE WAS NO DISPUTE THAT THE AMOUNT S WERE RECEIVED BY THE APPELLANT FROM VARIOUS RACE CLUBS ON THE BASIS OF W INNING TICKETS PRESENTED BY HER. WHAT WAS DISPUTED WAS THAT THEY WERE REALLY THE WIN NINGS OF THE APPELLANT FROM THE RACES. THIS RAISED THE QUESTION WHETHER THE APP ARENT COULD BE CONSIDERED AS REAL. APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT THE REAL AND THAT THE TAXING AUTHORITIES ARE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES. THE CHAIRMAN OF THE SETTLEMENT COMMISSION, IN HIS DISSENTING OPINIO N, HAD LAID EMPHASIS ON THE FACT THAT THE APPELLANT HAD PRODUCED EVIDENCE IN SU PPORT OF THE CREDITS IN THE FORM OF CERTIFICATES FROM THE RACING CLUBS GIVING PARTIC ULARS OF THE CROSSED CHEQUES FOR PAYMENT OF THE AMOUNTS FOR WINNING OF JACKPOTS, ETC . THE CHAIRMAN HAD REJECTED THE CONTENTION REGARDING LACK OF EXPERTISE IN RESPE CT OF THE APPELLANT AND HAD OBSERVED THAT THE EXPERTISE WAS THE LAST THING THAT WAS NECESSARY FOR A GAME OF CHANCE AND ANYBODY HAD TO GO AND CALL FOR FIVE NUMB ERS IN COUNTER AND OBTAIN A JACKPOT TICKET AND THAT BOOKS CONTAINING INFORMATIO N ARE AVAILABLE WHICH ARE QUITE CHEAP. THIS WAS A SUPERFICIAL APPROACH TO THE PROBL EM. THE MATTER HAD TO BE CONSIDERED IN THE LIGHT OF HUMAN PROBABILITIES. 7.2 FURTHERMORE, WE ARE ALSO NOT OBLIVION TO THE FA CT THAT THE ASSESSEE HAS SHOWN SUCH BAD DEBTS AS DEBTORS IN THE ASSESSMENT Y EARS 2006-07 AND 2007-08 WHICH WAS SUBJECT TO THE ASSESSMENT UNDER SECTION 1 43 (3) OF THE ACT AND THE REVENUE HAS ACCEPTED THE SAME. FURTHER THE LEARNED CIT (A) HAD ALLOWED THE CLAIM OF BAD DEBT FOR A.Y. 2011-12 WITH REGARD TO D EBT PERTAINING TO SIMILAR PERIOD. ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 7 IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE CIRC UMSTANTIAL EVIDENCES, WE HOLD THAT SUCH BAD DEBTS WERE OFFERED TO TAX. ACCOR DINGLY THE ASSESSEE IS ENTITLED FOR THE DEDUCTION UNDER SECTION 36 OF THE ACT. HENC E THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . COMING TO THE ITA NO. 1910/AHD/2018 FOR A.Y. 2013-1 4. 8. FIRST ISSUE RAISED BY THE ASSESSEE IS THAT THE L EARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCES OF BAD DEBT AMOUNTING TO RS. 6,59,939/- DESPITE THE FACT THAT CLAIM OF BAD DEBT FOR THE A.Y. 2013-14 HA S BEEN ALLOWED IN SIMILAR FACT AND CIRCUMSTANCES. 9. THE IDENTICAL ISSUE HAS ALREADY BEEN DECIDED BY US IN FAVOUR OF ASSESSEE IN ITA NO. 1909/AHD/2018 VIDE PARAGRAPH NO.7 OF THIS O RDER. RESPECTFULLY FOLLOWING THE SAME THIS GROUND OF APPEAL OF THE ASSESSEE IS A LSO ALLOWED. 10. THE ADDITIONAL GROUND OF APPEAL RAISED BY THE A SSESSEE VIDE LETTER DATED 06/02/2020 IS THAT THE LEARNED CIT (A) ERRED IN CON FIRMING THE ORDER OF THE AO BY HOLDING THAT THE LAND SOLD BY THE ASSESSEE IS NOT T HE AGRICULTURAL LAND. 11. THE ISSUE RAISED BY THE ASSESSEE IN THE ADDITIO NAL GROUND OF APPEAL IS LEGAL IN NATURE WHICH CAN BE ADMITTED AT ANY STAGE DURING THE PROCEEDINGS IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CA SE OF NTPC LTD VS.CIT REPORTED IN 229 ITR 383. ACCORDINGLY, WE ADMIT THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE AND PROCEED TO ADJUDICATE TH E SAME. 12. IT IS THE SETTLED LAW THAT THERE CANNOT BE ANY KIND OF INCOME TAX ON THE SALE OF THE AGRICULTURAL LAND. AS SUCH THE INCOME OF THE ASSESSEE IS EXEMPTED FROM THE ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 8 TAX ON THE SALE OF THE AGRICULTURAL LAND. HOWEVER T HE ONUS IS ON THE ASSESSEE TO PROVE THAT THE LAND IS AGRICULTURAL IN NATURE WITHI N THE MEANING OF THE PROVISIONS OF SECTION 2(14) OF THE ACT. HOWEVER WE FIND THAT THE NECESSARY DETAILS ARE NOT ARISING FROM THE ORDER OF THE AUTHORITIES BELOW. AC CORDINGLY, WE RESTORE THE IMPUGNED ISSUE TO THE FILE OF THE AO FOR FRESH ADJU DICATION AS PER THE PROVISIONS OF LAW. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1911/AHD/2018 FOR A.Y. 2014-15. 14. THE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT T HE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCES OF BAD DEBT AMOUNTING TO RS. 4,13,212/- DESPITE THE FACT THAT CLAIM OF BAD DEBT FOR THE A.Y. 2014-15 HA S BEEN ALLOWED IN SIMILAR FACTS AND CIRCUMSTANCES. 15. THE IDENTICAL ISSUE HAS ALREADY BEEN DECIDED BY US IN FAVOUR OF ASSESSEE IN ITA NO. 1909/AHD/2018 VIDE PARAGRAPH NO.7 OF THIS O RDER. RESPECTFULLY, FOLLOWING THE SAME THIS GROUND OF APPEAL OF THE ASSESSEE IS A LLOWED. 16. BEFORE WE PART WITH THE ISSUES/APPEALS AS DISCU SSED ABOVE, IT IS PERTINENT TO NOTE THAT THE CLAUSE OF RULE 34 OF THE APPELLATE TRIBUNAL RULES 1963 REQUIRES THE BENCH TO MAKE ENDEAVOUR TO PRONOUNCE THE ORDER WITH IN 60 DAYS FROM THE CONCLUSION OF THE HEARING. HOWEVER THE PERIOD OF 60 DAYS CAN BE EXTENDED UNDER EXCEPTIONAL CIRCUMSTANCES BUT THE SAME SHOULD NOT O RDINARILY BE FURTHER EXTENDED BEYOND ANOTHER 30 DAYS. IN SIMPLE WORDS THE TOTAL T IME AVAILABLE TO THE BENCH IS OF 90 DAYS UPON THE CONCLUSION OF THE HEARING. ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 9 17. HOWEVER, DURING THE PREVAILING CIRCUMSTANCES WH ERE THE ENTIRE WORLD IS FACING THE UNPRECEDENTED CHALLENGE OF COVID 2019 OU TBREAK, RESULTING THE LOCKDOWN IN THE COUNTRY, THE ORDERS THOUGH SUBSTANT IALLY PREPARED BUT COULD NOT BE PRONOUNCED FOR THE UNAVOIDABLE REASONS WITHIN TH E MAXIMUM PERIOD OF 90 DAYS. IN SUCH CIRCUMSTANCES WE FIND THAT THE HONBL E MUMBAI TRIBUNAL IN THE CASE OF JSW LIMITED VS DEPUTY COMMISSIONER OF INCOME TAX IN ITA NO. 6103/MUM/2018 VIDE ORDER DATED 14-5-2020 EXTENDED THE TIME FOR PRONOUNCING THE ORDER WITHIN 90 DAYS OF TIME BY OBS ERVING AS UNDER: 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SI TUATION IN THE COUNTRY. ON 24TH MARCH, 2020, HONBLE PRIME MINISTER OF INDIA TOOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 DAYS, TO PREVENT THE SPREAD OF COV ID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDED FROM TIME TO TIME. AS A MATTER OF FACT , EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLA TE TRIBUNAL AT MUMBAI WAS SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOWN BY THE M AHARASHTRA GOVERNMENT, AND ON ACCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHECKING SPREAD OF COVID 19. THE EPIDEMIC SITUATION IN MUMBAI BEING GR AVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CAS E, THERE WAS UNPRECEDENTED DISRUPTION OF JUDICIAL WOK ALL OVER THE COUNTRY. AS A MATTER OF FACT, IT HAS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSING DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HONBLE SUPREME COURT OF INDIA, IN AN UNPRECED ENTED ORDER IN THE HISTORY OF INDIA AND VIDE ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXTENDED THE LIMITATION TO EXCLUDE NOT ONLY THIS LOCKDOWN PERIOD BUT ALSO A FEW MORE DAYS PRIOR TO, AND AFTER, THE LOCKDOWN BY OBSERVING THAT IN CASE THE LIMITATION HAS EXPIRED AFTER 15.03.2020 THEN THE PERIOD FROM 15.03.2020 TILL THE DATE ON WH ICH THE LOCKDOWN IS LIFTED IN THE JURISDICTIONAL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SHALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER THE LIFTING OF LOCKDOWN . HONBLE BOMBAY HIGH COURT, IN AN ORDER DATED 15TH APRIL 2020, HAS, BESI DES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED THAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COU RT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SH ALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY , AND ALSO OBSERVED THAT ARRANGEMENT CONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SH ALL CONTINUE FURTHER TILL 15TH JUNE 2020 . IT HAS BEEN AN UNPRECEDENTED SITUATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTIFICATION D ATED 19 TH FEBRUARY 2020, TAKEN THE STAND THAT, THE CORONAVIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AND FMC (I.E. FORCE MAJEURE CLAUSE) MAYBE INVOKED, WHEREVER CONSIDERED APPROPRI ATE, FOLLOWING THE DUE PROCEDURE. THE TERM FORCE MAJEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS THE POSITION, AND IT IS OFFICIALLY SO NOTIFIED BY THE GOVERNMENT OF INDIA AND THE COVID-19 EPIDEMIC HAS BEEN NOTIFIED AS A DI SASTER UNDER THE NATIONAL DISASTER MANAGEMENT ACT, 2005, AND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURING WHICH LOCKDOWN WAS IN FORCE CAN BE ANYTHING BUT AN ORDINARY PERIOD. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE O F THE CONSIDERED VIEW THAT RATHER THAN TAKING A PEDANTIC VIEW OF THE RULE REQUIRING PRONOU NCEMENT OF ORDERS WITHIN 90 DAYS, ITA NOS.1909 TO 1911AHD/2018 ASSTT. YEARS 2012-13 TO 2014-15 10 DISREGARDING THE IMPORTANT FACT THAT THE ENTIRE COU NTRY WAS IN LOCKDOWN, WE SHOULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDING AT LEAST THE PERIOD DURING WHICH THE LOCKDOWN WAS IN FORCE. WE MUST FACTOR GROUND REALIT IES IN MIND WHILE INTERPRETING THE TIME LIMIT FOR THE PRONOUNCEMENT OF THE ORDER. LAW IS NOT BROODING OMNIPOTENCE IN THE SKY. IT IS A PRAGMATIC TOOL OF THE SOCIAL ORDER. TH E TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMATISM, AND THAT IS HOW THE LAW IS REQ UIRED TO INTERPRETED. THE INTERPRETATION SO ASSIGNED BY US IS NOT ONLY IN CON SONANCE WITH THE LETTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TI ME WHEN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPREC EDENTED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UNDOUBT EDLY, IN THE CASE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)] , HONBLE BOMBAY HIGH COURT DID NOT APPROVE AN ORDER BEING PASSED BY THE TRIBUNAL BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATION HONBLE BOMBAY HIGH COURT ITSELF HAS, VID E JUDGMENT DATED 15 TH APRIL 2020, HELD THAT DIRECTED WHILE CALCULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME- BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY . THE EXTRAORDINARY STEPS TAKEN SUOMOTUBY HONBLE JURISDI CTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOC KDOWN CANNOT BE TREATED AS AN ORDINARY PERIOD DURING WHICH THE NORMAL TIME LIMITS ARE TO REMAIN IN FORCE. IN OUR CONSIDERED VIEW, EVEN WITHOUT THE WORDS ORDINARILY , IN THE LIGHT OF THE ABOVE ANALYSIS OF THE LEGAL POSITION, THE PERIOD DURING W HICH LOCKOUT WAS IN FORCE IS TO EXCLUDED FOR THE PURPOSE OF TIME LIMITS SET OUT IN RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 90-DAY TIME-LIMIT FOR PRONOUNCEMENT OF ORDERS, INHERENT IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDERS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THERE IS NO, AND THERE CANNOT BE ANY, BAR ON THE DISCRETION OF THE B ENCHES TO REFIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG BET WEEN THE POINT OF TIME WHEN THE HEARING IS CONCLUDED AND THE POINT OF TIME WHEN THE ORDER THEREON IS BEING FINALIZED, BUT THEN, IN OUR CONSIDERED VIEW, NO SUCH EXERCISE WAS REQUIRED TO BE CARRIED OUT ON THE FACTS OF THIS CASE. 11. TO SUM UP, THE APPEAL OF THE ASSESSEE IS ALLOWE D, AND APPEAL OF THE ASSESSING OFFICER IS DISMISSED. ORDER PRONOUNCED UNDER RULE 3 4(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON TH E NOTICE BOARD. CONSIDERING THE ABOVE, WE EXPRESS TO PRONOUNCE THE ORDER BEYOND THE PERIOD OF 90 DAYS. ACCORDINGLY, WE PROCEED TO PRONOUNCE THE O RDER AS ON DATE. 18. IN THE COMBINED RESULT, ITA NOS. 1909 & 1911/AH D/2018 ARE ALLOWED AND ITA NO. 1910/AHD/2018 IS PARTLY ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 01/06/2020 AT AH MEDABAD. SD/- SD/- (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER