Susanta Kumar Jena, Ganjam V. ITO, Phulbani Ward, Phulbani

ITA 207/CTK/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7564 (ITAT-CUTTACK)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 23-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: D K SHETH
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.220/CTK/2016 ASSESSMENT YEAR : 2008 - 2009 DCIT, CIRCLE - 1(1), CUTTACK VS. SRI SUNDEEP HARIDAS, PROP. M/S. SUNDARDAS D.HUNSRAJ, COLLEGE SQUARE, CUTTACK PAN/GIR NO. AADPH 5404 N (APPELLANT ) .. ( RESPONDENT ) C.O.NO.18/CTK/2016 (ARISING OUT OF ITA NO.220/CTK/2016) ASSESSMENT YEAR :2008 - 2009 SRI SUNDEEP HARIDAS, PROP. M/S. SUNDARDAS D.HUNSRAJ, COLLEGE SQUARE, CUTTACK VS. DCIT, CIRCLE - 1(1), CUTTACK PAN/GIR NO. AADPH 5404 N CROSS OBJECTOR .. ( RESPONDENT ) ASSESSEE BY : SHRI D.K.SHETH REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 10 /11 / 2016 DATE OF PRONOUNCEMENT : 10 /11 / 2016 2 ITA NO.220/CTK/2016 C.O.NO.18/CTK/2016 ASSESSMENT YEAR :2008 - 2009 O R D E R THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - CUTTACK, DATED 17.3.2016 , FOR THE ASSESSMENT YEAR 2008 - 2009. 2. THE SOLE GRIEVANCE OF THE REVENUE IN ITS APPEAL IS THAT THE LD CIT(A) ERRED IN DELETING TH E BAD DEBTS WRITTEN OFF DURING THE FINANCIAL YEAR 2007 - 08 OF RS.4,69,262/ - ON THE GROUND THAT THE ASSESSEE HAD WRITTEN OFF THE BAD DEBTS ONLY IN ITS BOOKS OF ACCOUNT WHEN THE ASSESSEE HAS FAILED TO ESTABLISH FROM WHOM THE AMOUNTS WERE TO BE COLLECTED AND W HETHER SUCH BAD DEBTS HAVE BEEN TAKEN INTO ACCOUNT IN COMPUTING THE ASSESSABLE INCOME IN THE PREVIOUS YEAR. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED A SUM OF RS.4,69,262/ - TO THE P&L ACCOUNT ON ACCOUNT OF BAD DEBT. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH DETAILS REGARDING THE RECOVERY MEASURES UNDERTAKEN AND THE DOCUMENTS IN RESPECT OF STEPS TAKEN TO RECOVER THE DEBTS. THE ASSESSEE FAILED TO PRODUCE EVIDENCES OF RESPECTIVE PARTIES FROM WHOM THE AMOUNTS WERE TO BE COLLECTED. THEREFORE, THE ASSESSING OFFICER DISALLOWED THE BAD DEBTS CLAIM OF RS.4,69,262/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 3 ITA NO.220/CTK/2016 C.O.NO.18/CTK/2016 ASSESSMENT YEAR :2008 - 2009 4. BEFORE THE LD CIT(A), THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOTED THAT FACT THAT THE BAD DEBTS WERE WRITTEN OFF BY THE ASSESSEE AND GAVE THE REASON FOR DISALLOWING THE SAME BECAUSE OF NON - FURNISHING OF THE DOCUMENTS EVIDENCING STEPS TAKEN BY THE ASSESSEE FOR RECOVERY OF THE DEBTS. LD CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED THE DISALLOWANCE OBSERVING THAT THE APPELLANT HAD WRITTEN OFF THE AMOUNT IN THE BOOKS OF ACCOUNT AND THIS ACTION OF THE APPELLANT IS ENOUGH FOR ALLOWING THE CLAIM OF ALL DEBTS. BEING AGGRIEVED THE SAID ORDER OF THE LD CIT(A), THE REVENUE IS IN APPEAL BEFORE ME. 5. LD D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER. 6. ON THE OTHER HAND, LD A.R. OF THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF T . R .F LTD VS CIT (323 ITR 397) , WHEREIN, IT HAS BEEN HELD THAT AFTER AMENDMENT OF SECTION 36(1)(VII) W.E.F. APRIL 1, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE . HENCE, IT WAS HIS SUBMISSION THAT THE LD CIT (A) WAS JUSTIFIED IN VACATING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 7. I FIND THAT IN THE INSTANT CASE, IT IS NOT IN DISPUTE T HAT THE BAD DEBT OF RS.4,69,262/ - HAS BEEN WRITTEN OFF BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AS STATED BY THE LD CIT( A) IN HIS ORDER. I ALSO FIND THAT THE 4 ITA NO.220/CTK/2016 C.O.NO.18/CTK/2016 ASSESSMENT YEAR :2008 - 2009 DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE EVIDENCE REGARDING RECOVERY MEASURES UNDERTAKEN FOR THE DEBTS. I FIND THAT THE ORDER OF LD CIT(A) IS SUPPORTED BY THE O RDER OF HONBLE SUPREME COURT IN THE CASE OF T.R.F. LTD (SUPRA). I, THEREFORE, CONFIRM THE ORDER OF THE LD CIT(A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 8. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE DID NOT PRESS THE CROSS OBJECTION FILED A ND HAS MADE AN ENDORSEMENT TO THIS EFFECT IN THE GROUNDS OF APPEAL APPENDED TO FORM NO.36 FILED BEFORE THE TRIBUNAL. THEREFORE, THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE AND CROS S OB JECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. O RDER PRONOUNCE D IN THE OPEN COURT ON 10 /11 /2016 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 10 /11 /2016 B.K.PARIDA, SPS 5 ITA NO.220/CTK/2016 C.O.NO.18/CTK/2016 ASSESSMENT YEAR :2008 - 2009 COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT: DCIT, CIRCLE - 1(1), CUTTACK 2. THE RESPONDENT. /ASSESSEE: SRI SUNDEEP HARIDAS, PROP. M/S. SUNDARDAS D.HUNSRAJ, COLLEGE SQUARE, CUTTACK 3. THE CIT(A) , CUTTACK 4. CIT , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//