ITO 22(1)-1, NAVI MUMBAI V. DEEPAK A SHAH, MUMBAI

ITA 1930/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7485 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 11-03-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 30-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA RAMKRISHNAN
• Assessee Lawyers: PRAVIN N SHAH
• Keywords: Reassessment proceedings; Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1930/MUM/2009 (ASSESSMENT YEAR: 2000-01) INCOME TAX OFFICER 22(1)-1 SHRI DEEPAK A. SHAH 4TH FLOOR, TOWER NO. 6 21 LIL NIWAS, DERASAR LANE VASHI RLY STN. COMPLEX VS. GHATKPOAR (E), MUMBAI 400077 VASHI, NAVI MUMBAI PAN - AAFPS 7609 M APPELLANT RESPONDENT APPELLANT BY: SMT. CHANDRA RAMKRISHNAN RESPONDENT BY: SHRI PRAVIN N. SHAH O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE CIT(A)-XXII, MUMBAI DATED 10.11.2008. 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION OF RS. 19,03,241/- MADE BY THE A.O. ON ACCOUNT OF CLAIM OF BAD DEBT WITHOUT APPRECIATING THE FACT THAT INSPITE OF GIVING SEVERAL OPPORTUNITI ES, THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF THE CLAIM OF BAD DEBT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEES REPRESENTATIVE HIMSELF HAD EXPRESSED HIS INABILITY TO SUBMIT THE R EQUISITE DETAILS AND THEREFORE DOCUMENTS WERE ACCEPTED IN CONTRAVENT ION OF RULE- 46A. 3. BRIEFLY STATED, ASSESSMENT IN THIS CASE WAS ORIGINA LLY COMPLETED UNDER SECTION 144 OF THE I.T. ACT AND THE ORDER WAS CONFI RMED BY THE CIT(A), BUT SET ASIDE TO THE A.O. BY THE ITAT D BENCH, MUMBAI VID E ORDER IN ITA NO. 817/MUM/2004 DATED 24.05.2006. ONE OF THE ISSUES CO NTESTED IN ALL THE PROCEEDINGS WAS WRITE OFF OF BAD DEBT CLAIM OF RS.1 9,03,251/- PERTAINING TO VARIOUS DEBTS IN THE BOOKS OF ACCOUNT OF ABG CORPOR ATION, WHICH IS ONE OF THE THREE PROPRIETARY CONCERNS OWNED BY THE ASSESSE E. THE A.O. IN ITA NO. 1930/MUM/2009 SHRI DEEPAK A. SHAH 2 REASSESSMENT PROCEEDINGS DID NOT ACCEPT THE CLAIM O F BAD DEBT ON THE PRETEXT THAT INSPITE OF GIVING SUFFICIENT OPPORTUNI TIES THE ASSESSEE FAILED TO PRODUCE THE NECESSARY EVIDENCES THAT THE DEBTS HAVE BECOME BAD. IT WAS ASSESSEES CONTENTION THAT THE BOOKS OF ACCOUNTS WE RE ORIGINALLY DAMAGED IN THE EARTH QUAKE IN AHEMDABAD AND FOR THAT REASON TH E MATTER WAS RESTORED BACK TO THE A.O. TO GIVE ENOUGH OPPORTUNITY AND DEC IDE ISSUE AFRESH. IT WAS ASSESSEES CONTENTION THAT THE A.O. HAS NOT CONSIDE RED THE VARIOUS LETTERS FILED ON DIFFERENT DATES AND THE LEARNED CIT(A) EXA MINED THE ISSUE EXHAUSTIVELY IN PARA 7.5, CONSIDERED THE PROVISIONS OF LAW IN PARA 7.6 AND ALLOWED THE CLAIM OF THE ASSESSEE, HENCE THE PRESEN T APPEAL. 4. AS FAR AS THE MERITS AND LEGAL PRINCIPLES ARE CONC ERNED THE ISSUE IS NOW CRYSTALLISED BY THE DECISION OF THE HON'BLE BOM BAY HIGH COURT IN THE CASE OF DCIT VS. OMAN INTERNATIONAL BANK 313 ITR 12 8 AND CIT VS. STAR CHEMICALS (BOMBAY) LTD. 313 ITR 126. THE SAME PRINC IPLE WAS UPHELD BY THE HON'BLE SUPREME COURT IN THE CASE OF TRF LTD. V S. CIT (CIVIL APPEAL 5293 OF 2003 DT.09-02-10) WHEREIN THE HON'BLE SUPREME CO URT HAS HELD THAT BAD DEBT NEED NOT BE PROVED TO BE IRRECOVERABLE UNDER S ECTION 36(1)(VII) AND IT IS SUFFICIENT IF THEY WERE WRITTEN OFF IN THE BOOKS OF ACCOUNT AS IRRECOVERABLE. THE FACTS AS STATED BY THE CIT(A) INDICATE THAT THE ASSESSEE HAS WRITTEN OFF THE AMOUNT AND ACCORDINGLY THERE IS NO NEED TO CONS IDER GROUND NO. 1. 5. WITH REFERENCE TO GROUND NO. 2 THE CIT(A) HAS ANALY SED THE FINDINGS BY THE A.O. AND THE NON-FURNISHING OF DETAILS BY THE A SSESSEE BEFORE THE A.O. THE ASSESSEE HAS FURNISHED COPY OF THE LEDGER ACCOU NT OF M/S. ABG CORPORATION BEFORE THE CIT(A) IN THE FIRST ROUND OF APPEAL. IT IS ALSO ON RECORD THAT THE LEARNED CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE, FILED EARLIER ON THE SAME GROUND, AS THE LEARNED A.R. OF THE ASSE SSEE COULD NOT EXPLAIN WHETHER THE DEBT CLAIM HAVE BECOME BAD OR NOT. IN T HE RE-ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED COPY OF THE LEDGER ACCOUNT TO THE AO AND THE SAME WERE PRODUCED BEFORE THE CIT(A). SI NCE THE COPY OF THE LEDGER ACCOUNT WAS ALREADY ON RECORD AT THE TIME OF PROCEEDINGS IN THE FIRST ROUND AND THEY WERE FURNISHED BEFORE THE A.O. ALSO, WE DO NOT SEE HOW PROVISIONS RULE 46-A HAVE BEEN VIOLATED. THERE IS N OTHING ON RECORD TO ITA NO. 1930/MUM/2009 SHRI DEEPAK A. SHAH 3 INDICATE THAT THESE ARE FRESH DOCUMENTS. ACCORDINGL Y, THERE IS NO MERIT IN THE GROUND OF THE REVENUE. SINCE THE MATTERS ARE CO NSIDERED IN THE REASSESSMENT PROCEEDINGS AND ASSESSEE AND CIT(A) HA VE RELIED ON THE DOCUMENTS FURNISHED IN THE FIRST ROUND OF ASSESSMEN T PROCEEDINGS THE REVENUE GROUND 2 IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH 2010. SD/- SD/- (R.K. GUPTA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 19 TH MARCH 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXII, MUMBAI 4. THE CIT XXII, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.