Mr. Roshan S. Vernekar., Belgaum V. Income Tax Officer, Ward-1(1), Belgaum

ITA 228/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93584 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-07-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANAND SHANKAR MARATHE LD
• Assessee Lawyers: S R KOKATE I T P
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NOS. 227 & 228/PNJ/2014 : (A.YS 2007 - 08 & 2008 - 09) ROSHAN S. VERNEKAR 165, MAULI MANTRALAYA, HINDWADI, BELGAUM ( APPELLANT) PAN : AAHPV2059H VS. INCOME TAX OFFICER, WARD - 1(1), BELGAUM (RESPONDENT) ASSESSEE BY : S.R. KOKATE, ITP REVENUE BY : ANAND SHANKAR MARATHE, LD. DR DATE OF HEARING : 13/07/2015 DATE OF PRONOUNCEMENT : 13 /07/2015 O R D E R PER GEORGE MATHAN : 1. ITA NO. 227/PNJ/2014 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), BELGAUM IN ITA NO. 517/BGM/2010 - 11 DT. 6.2.2014 FOR A.Y 2007 - 08 AGAINST CONFIRMATION OF PENALTY LEVIED U/S 271(1 )(C) OF THE ACT. ITA NO. 228/PNJ/2014 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), BELGAUM IN ITA NO. 302/BGM/2012 - 13 DT. 1.5.2014 FOR A.Y 2008 - 09. SHRI S.R. KOKATE, ITP REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI ANAND SHAN KAR MARATHE, LD. DR REPRESENTED ON BEHALF OF THE REVENUE. ITA NO. 227/PNJ/2014 : 2. THIS APPEAL FILED BY THE ASSESSEE IS DELAYED BY 45 DAYS. THE ASSESSEE HAS FILED NECESSARY AFFIDAVIT SPECIFYING THAT THE ASSESSEES FATHER WAS UNWELL 2 ITA NOS. 227 & 228/PNJ/2014 (A.YS : 2007 - 08 & 2008 - 09) AND AS THE ONLY SON, ASSESSEE HAD TO ATTEND TO HIS MEDICAL AFFAIRS AND THE SAME CAUSED DELAY OF 45 DAYS. THE LD. DR DID NOT OBJECT TO THE CONDONATION OF THE DELAY. CONSEQUENTLY, THE DELAY IN FILING THE APPEAL IS CONDONED AND THE APPEAL DISPOSED OFF ON MERITS. 3. IT WAS SUB MITTED BY THE LD. AR THAT THE LD. CIT(A) HAD CONFIRMED THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN RESPECT OF TWO OF THE ADDITIONS VIZ. AN AMOUNT OF RS. 1,54,000/ - SHOWN AS RECEIPT FROM LABOURERS OF THE ASSESSEE WHICH WAS CREDITED TO THE CAPITAL ACCOUNT OF THE ASSESSEE AND AN AMOUNT OF LOAN OF RS. 1,50,000/ - RECEIVED FROM SMT. T. LEELAVATI, SISTER OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF THE TRANSACTIONS. IN RESPECT OF THE AMOUNT RECEIVED FROM THE LABOURERS, IT WAS SUBMITTED THAT THEY WERE NOT LABOURERS PER SE BUT WERE JEWELLERY ARTISANS. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS IN JEWELLERY BUSINESS AND AS A SECURITY DEPOSIT AGAINST THE GOLD GIVEN TO THE ARTISANS, AN AMOUNT OF RS. 50,000/ - WAS TAKEN FROM THE VARIOUS ARTISANS AND THIS WAS CREDITED TO THE CAPITAL ACCOUNT OF THE ASSESSEE. IT WAS THE SUBMISSION THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT BELIEVED BY THE AO AND THE ADDITION MADE. IT WAS THE SUBMISSION THAT IN RESPECT OF THE AMOUNT REC EIVED FROM THE SISTER, SMT. T. LEELAVATI, THE ASSESSEE HAD BEEN ASKED TO PRODUCE THE BANK PASSBOOK OF THE SAID SMT. T. LEELAVATI AND AS THE ASSESSEE COULD NOT PRODUCE THE BANK PASSBOOK, THE ADDITION HAD BEEN CONFIRMED. IT WAS THE SUBMISSION THAT THE PENAL TY AS LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT(A) MAY BE DELETED. 4. IN REPLY, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ON A SPECIFIC QUERY FROM THE BENCH AS TO WHETHER THE ASSESSEE WAS IN A POSITION TO PRODUCE THE BANK 3 ITA NOS. 227 & 228/PNJ/2014 (A.YS : 2007 - 08 & 2008 - 09) PASSBOOK IN CASE OF THE ASSESSEES SISTER, SMT. T. LEELAVATI, IT WAS THE SUBMISSION BY THE LD. AR THAT THE ASSESSEE WAS UNABLE TO PRODUCE THE BANK PASSBOOK AT PRESENT. AS IT IS NOTICED THAT THE ASSESSEE EVEN TILL DAT E HAS NOT BEEN ABLE TO PRODUCE THE BANK PASSBOOK IN RESPECT OF THE ASSESSEES SISTER, SMT. T. LEELAVATI, THE PENALTY IN RESPECT OF THE ADDITION REPRESENTING RS. 1,50,000/ - STANDS CONFIRMED. 6. IN RESPECT OF THE ADDITION REPRESENTING THE DEPOSITS TAKEN FRO M THE LABOURERS, MORE SO, THE JEWELLERY ARTISANS, IT IS NOTICED THAT THE EXPLANATION GIVEN BY THE ASSESSEE HAS NOT BEEN SHOWN TO BE FALSE OR THAT THE SAID EXPLANATION IS NOT A PLAUSIBLE EXPLANATION. THIS BEING SO, WE ARE OF THE VIEW THAT THE PENALTY IN RE SPECT OF THE SAID ADDITION IS NOT SUSTAINABLE. CONSEQUENTLY, WE DELETE THE SAME. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 22 8 /PNJ/2014 : 8. IN THE SAID APPEAL, IT WAS SUBMITTED BY THE LD. AR THAT THE ONLY ISSUE WAS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF BAD DEBTS AS MADE BY THE AO. IT WAS THE SUBMISSION THAT THE ASSESSEE HAS WRITTEN OFF THE BAD DEBTS AND THE SAME HAS ALSO BEEN RECOGN ISED BY THE AO. IT WAS THE SUBMISSION THAT THE CLAIM OF THE ASSESSEE WAS LIABLE TO BE ALLOWED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF TRF LTD. REPORTED IN 323 ITR 397. IN RESPECT OF GROUND NOS. 1 TO 3 OF THE ASSESSEES APPEAL, THE LD. AR DID NOT PRESS THE SAME. 9. IN REPLY, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO AND LD. CIT(A). 4 ITA NOS. 227 & 228/PNJ/2014 (A.YS : 2007 - 08 & 2008 - 09) 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE ASSESSEE HAS NOT PRESSED GROUND NOS. 1 TO 3 OF THE ASSESSEES AP PEAL, THE SAME STANDS DISMISSED. 11. IN RESPECT OF THE 4 TH GROUND WHICH IS AGAINST THE ACTION OF LD. CIT(A) IN NOT ALLOWING THE CLAIM OF BAD DEBTS, AS IT IS NOTICED THAT THE AO, IN THE ASSESSMENT ORDER, HAS RECOGNISED THAT THE ASSESSEE HAS WRITTEN OFF THE BAD DEBS IN RESPECT OF M/S. BELGAUM JEWELLERS, DUBAI TO AN EXTENT OF RS. 9,02,940/ - AND IT IS NOTICED THAT THE ASSESSMENT YEAR INVOLVED IS A.Y 2008 - 09, IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF T . R . F LTD. REFERRED TO SUPRA WHEREI N IT HAS BEEN HELD THAT LAW AFTER 1.4.1989 ASSESSEE ONLY HAS TO ESTABLISH THAT THE DEBT HAS BEEN WRITTEN OFF WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION OF THE BAD DEBT. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 1 3 . IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 /07/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 1 3 /07/ 201 5 *SSL* 5 ITA NOS. 227 & 228/PNJ/2014 (A.YS : 2007 - 08 & 2008 - 09) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 6 ITA NOS. 227 & 228/PNJ/2014 (A.YS : 2007 - 08 & 2008 - 09) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 13/07/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 13/07/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 4 /07/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 4 /07/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 4 /07/2015 SR.PS 6. DATE OF PRONOUNCEMENT 13/07/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 1 4 /07/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER