DCIT (OSD) RG 8(1), MUMBAI V. CONTROL PRINT (INDIA) LTD, MUMBAI

ITA 2005/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3605 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 24-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K AGARWALDR

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.2005/MUM/2014 ASSESSMENT YEAR: 2006-07 DCIT(OSD), RANGE-8(1), ROOM NO.260A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S CONTROL PRINT (INDIA) LTD. C-106, HIND SAURASHTRA INDUSTRIAL ESTATE, M.V. ROAD, MAROL NAKA, ANDHERI (EAST), MUMBAI-400059 ( / REVENUE) ( ! ' /ASSESSEE) PAN. NO . AAACC5378C / REVENUE BY SHRI V.K. AGARWAL-DR ! ' / ASSESSEE BY SHRI SHAILESH S SHAH # $ % ' & / DATE OF HEA RING : 17/05/2016 % ' & / DATE OF ORDER: 17/05/2016 ITA NO.2005/MUM/2014 M/S CONTROL PRINT (INDIA) LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 23/12/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THE PRESENT APPEAL IS WITH RE SPECT TO DELETING THE DISALLOWANCE OF RS.2,95,74,783/-, BY T HE LD. COMMISSIONER OF INCOME TAX (APPEAL), BEING LOAN/ADV ANCES WRITTEN OFF IGNORING THE FACT THAT THE ASSESSEE COM PANY WAS NOT IN THE BUSINESS OF MONEY LENDING, HENCE, WRITE OFF OF LOAN/ADVANCES, IS CAPITAL LOSS, WITHOUT APPRECIATIN G THE FACT THAT THE ASSESSEE DID NOT SATISFY THE CONDITIONS SP ECIFIED IN SECTION 36(1)(VII) R.W.S. 36(2) OF THE INCOME TAX A CT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING, THE LD. DR, SHRI V.K. AGARWAL, ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUN D RAISED. ON THE OTHER HAND, SHRI SHAILESH S. SHAH, LD. COUNS EL FOR THE ASSESSEE, DEFENDED THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DECLARED TOTAL INCOME OF ITA NO.2005/MUM/2014 M/S CONTROL PRINT (INDIA) LTD. 3 RS.3,69,77,014/-, WHICH WERE PROCESSED U/S 143(1) O F THE ACT. THEREAFTER, NOTICE U/S 143(2) OF THE ACT WAS ISSUED , AS THE CASE WAS SELECTED FOR SCRUTINY. THE LD. ASSESSING OFFIC ER PROCEEDED TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE AT RS.6,86,07,840/-. DURING ASSESSMENT PROCEEDINGS, I T WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS WRITTEN OFF BAD DEBT OF RS.17,45,036/- AND RS. 2,95,74,783/ -. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE IMPU GNED AMOUNT MAY NOT BE DISALLOWED. THE ASSESSEE EXPLAIN ED THAT SINCE THE PRINCIPLE AMOUNT OF LOAN WAS NOT RECOVERA BLE, THEREFORE, THE SAME HAS BEEN WRITTEN OFF IN THE BOO KS. HOWEVER, THE LD. ASSESSING OFFICER MADE THE DISALLO WANCE. 2.2. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INC OME TAX (APPEAL), THE FACTUAL MATRIX ALONG WITH CASES R ELIED UPON AND ALSO THE REMAND REPORT FROM THE ASSESSING OFFIC ER WERE CONSIDERED AND FINALLY THE ADDITION WAS DELETED. 2.3. THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEF ORE THIS TRIBUNAL. WE FIND THAT THE LD. ASSESSING OFFIC ER DISALLOWED WRITE OFF FOR TWO REASONS, FIRSTLY THAT MONEY LENDI NG WAS NOT THE MAIN BUSINESS ACTIVITY OF THE ASSESSEE AND SECO NDLY THE ITA NO.2005/MUM/2014 M/S CONTROL PRINT (INDIA) LTD. 4 ASSESSEE WAS NOT HAVING MONEY LENDING LICENSE/PERMI SSION TO CARRY OUT THE MONEY LENDING WORK. IT IS NOTED THAT FOR ASSESSMENT YEAR 2003-04, IDENTICAL ISSUE AROSE BEFO RE THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF (ITA NO.1386/MUM/2007), WHEREIN, THE ISSUE WAS DECIDED I N THE FAVOUR OF THE ASSESSEE. THE LD. COMMISSIONER OF INC OME TAX (APPEAL) HAS FOLLOWED THE AFORESAID DECISION OF THE TRIBUNAL. KEEPING IN VIEW, THE PRINCIPLE OF JUDICIAL DISCIPLI NE AND IN THE ABSENCE OF ANY CONTRARY DECISION, WE FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. THE REVENUE HAS NOT PRODUCED ANY CONTRARY DECISION IN RESPECT T O THE DECISION OF THE TRIBUNAL FOR ASSESSMENT YEAR 2003-0 4 IN THE CASE OF ASSESSEE. THE CASE OF THE ASSESSEE IS SQUAR ELY COVERED THE DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS M/S BANK OF BARODA FOR A.Y. 2005-06 (ITA NO.2927/MUM/2011 ETC.) ORDER DATED 25/07/2014. THE FOLLOWING CASES ALSO SUPPORTS THE CASE OF THE ASSESSEE. I) SOUTH INDIAN BANK V/S CIT, 262 ITR 579 (KAR.); II) DCIT V/S CATHOLIC SYRIAN BANK LTD., 267 ITR 52, ITAT COCHIN SPECIAL BENCH; ITA NO.2005/MUM/2014 M/S CONTROL PRINT (INDIA) LTD. 5 III) STATE BANK OF BIKANER & JAIPUR V/S DCIT, [2001 [ 74 ITD 203 (JAIPUR BENCH); IV) BANK OF BARODA V/S JCIT, ITAT B BENCH, MUMBAI , FOR A.Y. 199697, 199798 AND 200001; V) TRF LTD. V/S CIT, 323 ITR 397 (SC) AND VIJAYA BA NK V/S CIT (SC) 323 ITR 167. 2.3. EVEN OTHERWISE, IN VIEW OF THE AMENDMENT IN THE TAXATION LAWS WITH EFFECT FROM 01 ST APRIL, 1989, THE REQUIREMENT OF DEMONSTRATING THAT THE DEBTS HAS BECOME BAD HAS BEEN DISPENSED WITH AND ONLY REQUIREMENT REMAINS THAT IT SHOULD BE WRITTEN OFF IN BOOKS OF ACCOUNTS OF THE ASSESS EE, WHICH HAS BEEN FURTHER CLARIFIED BY CBDT CIRCULAR NO.551 DATED 23/01/1990. OUR VIEW FIND SUPPORT FROM THE RATIO LA ID DOWN IN CIT VS BRILLIANT TUTORIALS PVT. LTD. 292 ITR 399 (MAD.), CIT VS MORGAN SECURITIES AND CREDITS PVT. LTD. (210 CTR 336)(DEL.), DCIT VS OMAN INTERNATIONAL BANK SAOG. (313 ITR 128) (BOM.), CIT VS STAR CHEMICALS (BOM.) PVT. LTD. 220 CTR 319 (BOM.), CIT VS GLOBAL CAPITAL LTD. 201 TAXATION 210 (DEL.), CIT VS M/S EXCEL FASHION PVT. LTD. (201 TAXATION 216)(DEL), CI T VS AUTO METERS LTD. 292 ITR 345 (DEL.). SO FAR AS, THE RELI ANCE UPON THE DECISION IN KASHMIR TRADING COMPANY VS DCIT AND AHAMADABAD ELECTRICITY COMPANY LTD. (SUPRA), THE DE CISION ITA NO.2005/MUM/2014 M/S CONTROL PRINT (INDIA) LTD. 6 FROM HONBLE RAJASTHAN HIGH COURT AND GUJARAT HIGH COURT ARE CONCERNED, THE HONBLE APEX COURT, LATER ON, I N T.R.F. LTD. VS CIT 323 ITR 397 (SC), CONSIDERING THE PROVISION OF SECT ION 36(1)(VII), PRIOR TO APRIL, 1, 1989 AND POST AMENDM ENT HELD THAT IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABL ISH THAT THE DEBT, IN FACT, HAS BECOME IRRECOVERABLE. MERE WRITT EN OFF IN ITS ACCOUNTS IS ENOUGH, THUS, FOLLOWING THE AFORESAID D ECISION FROM HONBLE APEX COURT, WE FIND NO INFIRMITY IN THE CON CLUSION DRAWN BY THE COMMISSIONER OF INCOME TAX (APPEAL), T HUS, THE APPEAL OF THE REVENUE IS DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 17/05/2016. SD/- SD/- ( RAJENDRA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ( DATED : 17/05/2016 F{X~{T? P.S/. .. % ( $&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. ITA NO.2005/MUM/2014 M/S CONTROL PRINT (INDIA) LTD. 7 3. 0 0 # 1' ( *+ ) / THE CIT, MUMBAI. 4. 0 0 # 1' / CIT(A)- , MUMBAI 5. 34 .' , 0 *+& * 5 , # $ / DR, ITAT, MUMBAI 6. 6 7$ / GUARD FILE. / BY ORDER, /3+' .' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI