ACIT, Corporate Circle-1(2), Bhubaneswar V. M/s. Western Electricity Supply Company of Orissa Limited, Bhubaneswar

ITA 221/CTK/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4363 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts

Judgement Text

2 ITA NO. 221/CTK/2017 ASSESSMENT YEAR : 2011 - 2012 CONSIDERING THE SUBMISSION OF LD DEPARTMENTAL REPRESENTATIVE AND MATERIALS AVAILABLE ON RECORD. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES INCOME FROM DISTR IBUTION OF ELECTRICITY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON PERUSAL OF NOTE 8 OF AUDITORS REPORT, THE ASSESSING OFFICER NOTICED THAT CONTINGENT LIABILITY OF RS.1,18 ,17,136/ - PAID TO M/S. K.S.TECHNO ENTERPRISES HAS BEEN CREATED AGAINST CREDITORS AND SERVICE PROVIDERS . THE ASSESSING OFFICER DISALLOWED THE CONTINGENT LIABILITY AGAINST THE CREDITORS AND SERVICE PROVIDERS AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5 . ON APPEAL, THE CIT(A) DELETED THE ADDITION OBSERVING THAT IT IS ACTUALLY THE WRITE OFF OF BAD DEBT. 6 . BEFORE US, LD D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER . 7 . WE HAVE HEARD THE SUBMISSIONS OF LD D.R , PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE SOLE DISPUTE IN THIS APPEAL IS WITH RESPECT TO DELETION OF ADDITION OF RS.1,18,17,136/ - IN RESPECT OF PROVISION FOR DOUBTFUL DEBTS. THE CONTENTION OF LD D.R. THAT THE CIT(A) HAS ERRED IN DELETING THE PROVISION OF CONTINGENT LIABILITY IRRESPECTIVE OF THE FACT THAT IN ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER BASED ON THE AUDITORS REPORT FOUND THAT THE ASSESSEE HAS CREATED A PROVISION TOWARDS THE CREDITORS AND SERVICE PROVIDERS AND ALSO SUCH PROVISION BEING U N ASCERTAINED LIABILITY CANNOT BE ALLOWABL E UNDER THE 4 ITA NO. 221/CTK/2017 ASSESSMENT YEAR : 2011 - 2012 LTD (SUPRA) AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 3 1 / 01 /201 8 . S D / - S D / - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 3 1 / 01 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : ACIT, CORPORATE CIRCLE - 1(2), BHUBANESWAR. 2. THE RESPONDENT. WESTERN ELECTRICITY SUPPLY CO. OF ORISSA LTD., N - 1/22, IRC VILLAGE, NAYAPALI, BHUBANESWAR. 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//