DCIT RG 1(2), MUMBAI V. NICHE FINANCIAL SERVICES P.LTD, MUMBAI

ITA 2220/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92876 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.2220/MUM/2013 ASSESSMENT YEAR: 2007-08 D.C.I.T.1(2), R. NO.535, 5 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. M/S NICHE FINANCIAL SERVICES PVT. LIMITED, 511, MAKER BHAVAN, NO.-3, 21, NEW MARINE LINES, MUMBAI-400020 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO.AA CCN0485H / REVENUE BY DR. YOGESH KAMAT-DR !' # / ASSESSEE BY SHRI K.GOPAL & MS. NEHA PARANJPE $ % & # ' / DATE OF HEARING : 18/06/2015 & # ' / DATE OF ORDER: 01/07/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 21/11/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, BROADLY DIRECTING THE ASSESSING OFFICER TO DELETE T HE M/S NICHE FINANCIAL SERVICES PVT. LIMITED ITA NO.2220/MUM/2013 2 ADDITION OF RS.15 LAKH MADE ON ACCOUNT OF WRITING O FF BAD DEBTS BY THE ASSESSEE AND THUS ELIGIBLE TO CLAIM BA D DEBTS U/S 36(1)(VII) OF THE INCOME TAX ACT, 1961 (HEREINA FTER THE ACT). 2. DURING HEARING OF THIS APPEAL, THE LD. DR, DR. YOGESH KAMAT, DEFENDED THE CONCLUSION ARRIVED AT IN THE ASSESSMENT ORDER, WHEREAS, SHRI K. GOPAL ALONG WITH MS. NEHA PARANJAPE, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE DULY DISCLOSED THE CLA IM OF BAD DEBTS IN ITS BOOKS OF ACCOUNTS AND THE ASSESSEE IS A NON- BANKING FINANCE COMPANY, REGISTERED WITH R.B.I., IN VOLVED IN THE BUSINESS OF LANDING AND BORROWING ON REGULAR BASIS, THUS, THE ASSESSEE RIGHTLY CLAIMED THE DEDUCTION ON ACCOUNT OF ACTUALLY WRITING OFF THE SAID DEBT AS IS IRRECOVERABLE IN ITS ACCOUNTS. IF THE OBSERVATIO N MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO T HE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MAT ERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RES PECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT AFTER 01/04/1989, IT IS NOT NECESSARY FOR THE ASSES SEE TO ESTABLISH THAT DEBT, IN FACT, HAS BECOME IRRECOVERA BLE, IT IS ENOUGH, IF BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE AS WAS HELD IN T.R.F. LTD. VS CIT 323 ITR 397 (SC), CIT VS AUTO METERS LTD. 292 ITR 3 45 M/S NICHE FINANCIAL SERVICES PVT. LIMITED ITA NO.2220/MUM/2013 3 (DEL.), CIT VS MORGAN SECURITIES AND CREDITS PVT. L TD. 162 TAXMAN 124 (DEL.), SURESH GAGGAL VS ITO (2009) 180 TAXMAN 90 (HP), LAWLYS ENTERPRISES LTD. VS CIT 314 ITR 297 (PAT.), DIT VS OWAN INTERNATIONAL BANK (2009) 1 84 TAXMAN 314 (BOM.). THE FACT OF AMENDMENT TO SECTIO N 36(1)(VII) READ WITH SECTION 36(2) IS ONLY THAT NOW FOR CLAIMING DEDUCTION U/S 36(1)(VII) MERE WRITING OFF DEBT OR PART THEREOF AS IRRECOVERABLE IS A SUBSTANTIAL COMP LIANCE. OUR VIEW IS FURTHER SUPPORTED BY THE DECISION IN CI T VS KOHLI BROTHERS COLOR LAB PVT. LTD. (2010) 186 TAXMA N 62 (ALL.) AND CIT VS SMT. NILOPHER I. SINGH 309 ITR 23 3 (DEL.). IN VIEW OF THE AFOREMENTIONED JUDICIAL PRONOUNCEMEN TS, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD . COMMISSIONER OF INCOME TAX (APPEALS), THUS, THE APP EAL OF THE REVENUE IS DISMISSED. FINALLY, 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 ON18/06/2015. SD/ - (RAJENDRA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ( DATED : 01/07/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT M/S NICHE FINANCIAL SERVICES PVT. LIMITED ITA NO.2220/MUM/2013 4 2. ./,- / THE RESPONDENT. 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