Dua Consulting Pvt. Ltd., New Delhi V. JCIT, New Delhi

ITA 2211/DEL/2012

• Counselvise Citation: 221120114 RSA 2012
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 09-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUKHVEER CHAUDHARY
• Keywords: Depreciation; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI RAJPAL YADAV, JM ITA NO. 2211/DEL/2012 ASSESSMENT YEAR : 2008-09 DUA CONSULTING P.LTD. VS. JCIT, RANGE 37, NEW DELH I 301-303, TOLSTOY HOUSE 15, TOLSTOY MARG NEW DELHI 110 001 PAN: AABCD 4871A (APPELLANT) (RESPONDENT) APPELLANT BY:- SH.RAJAN BHATIA, ADV. RESPONDENT BY:- SH.SUKHVEER CHAUDHARY , SR.D.R. O R D E R PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE LD.CIT(A)-XXVIII DATED 29.2.2012 PERTAINING TO ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS. 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON THE FACT S OF THE CASE IN UPHOLDING THE DISALLOWANCE OF 5% OF EXPENSES ON TEL EPHONE, VEHICLE MAINTENANCE, VEHICLE DEPRECIATION AND BUSINESS PROM OTION, TO COVER UP THE ELEMENT OF PERSONAL USE. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN UPHOLDING THE DISALLOWANCE OF SUM OF RS.5,19,487/- OUT OF BAD DEBTS WRITTEN OFF BY THE ASSESSEE. 2. THE ASSESSEE COMPANY IS ENGAGED IN PROVIDING CON SULTANCY SERVICES AND HAS SHOWN INCOME FROM BUSINESS AND INC OME FROM OTHER SOURCES. ITA NO. 2211/DEL/2012 PAGE 2 OF 4 ASSESSMENT YEAR: 2008-09 DUA CONSULTING P.LTD. 3. WE HAVE HEARD MR.RAJAN BHATIA, ADV. FOR THE ASSE SSEE AND SHRI SUKHVEER CHOUDHARY, SR.D.R. ON BEHALF OF THE REVENU E. ON DISALLOWANCE OF 5% OF EXPENSES ON TELEPHONE, VEHICL E MAINTENANCE, VEHICLE DEPRECIATION AND BUSINESS PROMOTION, WE FIN D THAT THE ASSESSEE IS A COMPANY AND THERE CANNOT BE AN ELEMENT OF PERSONA L USE BY THE COMPANY WARRANTING ADHOC DISALLOWANCE. WE HOLD SO RELYING ON THE FOLLOWING CASE LAWS. I. DCIT VS. GUJARAT FILAMENTS LTD. (2000) 108 TAXMA N 287; II. SARASWATI ASSOCIATES P.LTD. VS ITO IN ITA NO. 5 047/DEL/87 DT. 26.6.2002; III. USHA RECTIFIER CORPN.(I) P.LTD. VS IAC (1989) 35 TTJ (DEL) 602; IV. I&I ELECTRICALS (P) LTD. VS ITO (2000) 112 TAXM AN 195; V. SAYAJI IRON & ENGG.CO. VS CIT(2002) 253 ITR 749. IN THE RESULT GROUND NO.1 IS ALLOWED. 4. COMING TO GROUND NO.2 THE ASSESSING OFFICER ALL OWED PART OF THE BAD DEBTS WRITTEN OFF ON THE GROUND THAT THE ASSESS EE HAS NOT BEEN ABLE TO PROVIDE DETAILS OF THE INCOME TAX PARTICULARS, S O AS TO ENABLE HIM TO VERIFY THE VERACITY OF THE CLAIM. THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE DISALLOWANCE OF THE DEBTS W HICH WERE CLAIMED TO BE WRITTEN OFF ON THE GROUND THAT THOSE WERE NOT TA KEN INTO ACCOUNT AS INCOME OF THE ASSESSEE IN THE PREVIOUS YEAR. THE A SSESSEE VIDE ITS REPLY DT. 27.12.2010 HAS PRODUCED EVIDENCE BEFORE THE ASS ESSING OFFICER THAT ALL AMOUNTS WRITTEN OFF HAD BEEN TAKEN AS INCOME IN THE RELEVANT PREVIOUS YEARS. THE AO HAS ACCEPTED THIS EXPLANATI ON OF THE ASSESSEE. WHILE SO, THE COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT ANY BASIS, ITA NO. 2211/DEL/2012 PAGE 3 OF 4 ASSESSMENT YEAR: 2008-09 DUA CONSULTING P.LTD. RECORDED A FINDING THAT THE ASSESSEE HAS NOT ESTABL ISHED THAT THE AMOUNT OF DEBTS WRITTEN OFF WERE TAKEN INTO ACCOUNT AS INC OME IN THE PREVIOUS YEAR. BEFORE US THE ASSESSEE FILED A PAPER BOOK TO DEMONSTRATE THAT ALL THESE AMOUNTS, WHICH WERE WRITTEN OFF, WERE PART O F SUNDRY DEBTORS FOR THE FINANCIAL YEAR ENDING 31.3.2004, 31.3.2005, 31. 3.2006, 31.3.2007 AND 31.3.2008. AUDITED ACCOUNTS WERE ALSO FILED. THE LD.D.R. COULD NOT CONTROVERT THESE SUBMISSIONS OF THE ASSESSEE. THE HONBLE SUPREME COURT IN THE CASE OF T&F LTD. VS. CIT, 323 ITR 397 (SC) HELD THAT THE ASSESSEE NEED NOT ESTABLISH THAT THE DEBT HAS IN FA CT BECOME IRRECOVERABLE AFTER THE AMENDMENT TO S.36(1)(VII) O F THE INCOME TAX ACT, 1961. RESPECTFULLY FOLLOWING THE SAME WE ALLOW THI S GROUND OF THE ASSESSEE. 5. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER,2012. SD/- SD/- (RAJPAL YADAV) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: THE 10 TH DECEMBER, 2012 *MANGA ITA NO. 2211/DEL/2012 PAGE 4 OF 4 ASSESSMENT YEAR: 2008-09 DUA CONSULTING P.LTD. COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR 1. DATE OF DICTATION: 2. DRAFT PLACED BEFORE THE AUTHOR ON: 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON :