M/S Natvarlal Shyamal Das & Co, Ahmedabad V. The Ito Wd-2(1), Ahmedabad

ITA 2552/AHD/2000

• Counselvise Citation: 255220514 RSA 2000
• Duration Of Justice: 10 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 30-11-2011
• Assessment Year: 1987-1988
• Appeal Filed On: 08-12-2000
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWAL SRDR
• Keywords: Bad and doubtful debts

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., !'# $ $ $ $ %% % &, ' ( # BEFORE SHRI G.D.AGARWAL, VICE-PRESIDENT AND SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER $./ I.T.A. NO.2552/AHD/2000 ( * * * * / / / / ASSESSMENT YEAR : 1987-88) M/S.NATWARLAL SHAMALDAS & CO. 980, KHADIA GOLWADNAKA AHMEDABAD / VS. THE INCOME TAX OFFICER WARD-2(1) AHMEDABAD '+ (, $./- $./ PAN/GIR NO. : AABFN 3098G ( +. / // / APPELLANT ) .. ( /0+. / RESPONDENT ) +. 1 ( / APPELLANT BY : SHRI HARDIK VORA, A.R. /0+. 2 1 ( / RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR. D.R. % 3 2 &, / / / / DATE OF HEARING : 30/11/2011 45* 2 &, / DATE OF PRONOUNCEMENT : 30.11.2011 (6 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS)-II, AHMEDABAD DATED 0 4/09/2000. BEFORE US, AT THE OUTSET, LD.AR MR.HARDIK VORA HAS EXPRESSED TO ARGUE ONLY GROUND NO.3; REPRODUCED BELOW:- 3. THE CITA HAS ERRED IN CONFIRMING THE ADDITION O F RS.3,80,159 BEING THE LOSS ARISING BECAUSE OF MISAPPROPRIATION/EMBEZZLEMENT/BAD DEBTS/TRADE/BUSIN ESS LOSS. LOOKING TO THE VOLUMINOUS EVIDENCE FILED BEFORE THE A.O. AND THE ITA NO. 2552/AHD/2000 M/S.NATWARLAL SHAMALDAS & CO. VS. ITO ASST.YEAR - 1987-88 - 2 - CITA, THE CLAIM OF RS.3,80,159 OUGHT TO HAVE BEEN A LLOWED AS A DEDUCTION. 2. THIS CASE HAS A CHEQUERED PAST HISTORY BECAUSE O F THE REASON THAT EARLIER ITAT AHMEDABAD, SMC BENCH VIDE A CONSOLIDAT ED ORDER DATED 31/03/2005 IN THE CASE OF ASSESSEE TITLED AS ITO VS . M/S. NATWARLAL SHAMALDAS & CO. BEARING ITA NO.707/AHD/2000 FOR A. Y.1996-97 AND ANOTHER APPEAL OF M/S.NATWARLAL SHAMALDAS & CO. VS. ITO BEARING ITA NO.512 AND 2552/AHD/2000 FOR A.YS. 1996-97 & 1987- 88 HAS RESTORED THE SAID ISSUE VIDE PARAGRAPH NO. 16; REPRODUCED BE LOW:- 16. THE PRESENT ASSESSMENT YEAR IS 1987-88. THE A MOUNT OF RS.1,15,788/- RELATING TO THREE PARTIES HAS BEEN WR ITTEN OFF BY THE ASSESSEE IN THE ASSESSMENT YEAR 1996-97 AND THEREFO RE, THE CLAIM OF THE ASSESSEE TO THAT EXTENT CANNOT BE ALLOWED IN THE YEAR UNDER CONSIDERATION. THE DISALLOWANCE OF RS.1,15,788/- I S ACCORDINGLY, UPHELD. AS REGARDS THE BALANCE AMOUNT OF RS.2,64,3 70/-, THE EMBEZZLEMENT ITSELF HAS NOT BEEN PROVED BY THE ASSE SSEE AND THERE HAVE BEEN CONFLICTING STATEMENTS OF SHRI TANNA. TH E FIRST ONE RECORDED ON 25-9-1986 WHICH WAS STATED TO HAVE BEEN GIVEN UNDER COERCION AND THE SUBSEQUENT STATEMENT RECORDED BY T HE ASSESSING OFFICER WHEREIN HE HAS ADMITTED THAT HE WAS EMPLOYE D TO COLLECT BLACK MONEY ON BEHALF OF THE ASSESSEE FIRM WHICH WA S DULY REMITTED AND THE STORY OF FRAUD HAS BEEN COOKED UP FOLLOWED BY FILING OF A CIVIL SUIT AGAINST HIM. I HAVE NOT BEEN INFORMED AS TO WHAT HAS HAPPENED TO THE CIVIL SUIT FILED. THERE IS ALSO NO POLICE COMPLAINT LODGED AGAINST HIM NOR THE POLICE HAS ARR ESTED SHRI TANNA FOR ANY SUCH CHARGE. IN THESE CIRCUMSTANCES, IN MY OPINION, IT IS DIFFICULT TO ADMIT THE CLAIM OF THE ASSESSEE. VARIOUS DECISIONS HAVE BEEN REFERRED BY THE LD. COUNSEL OF THE ASSESS EE, BUT IN THE ABSENCE OF ANY PROOF OF EMBEZZLEMENT, THE CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED AT THIS STAGE. IT IS SUBMITTED THAT A CRIMINAL COMPLAINT WAS FILED BY THE ASSESSEE IN 1996 FOR THE RECOVERY OF RS.2,75,848/- I.E. 10 YEARS AFTER THE INCIDENT HAS TAKEN PLACE AND THE YEAR IN WHICH THE CLAIM IS MADE BY THE A. SUCH COMPLAINT, IN ITA NO. 2552/AHD/2000 M/S.NATWARLAL SHAMALDAS & CO. VS. ITO ASST.YEAR - 1987-88 - 3 - MY OPINION, CANNOT HAVE ANY BEARING TO DECIDE THE I SSUE FOR THE YEAR UNDER CONSIDERATION I ACCORDINGLY, UPHOLD THE ORDERS OF THE AUTHORITIES BELOW IN DISALLOWING THE CLAIM OF THE A SSESSEE. 2.1. THAT ORDER OF THE TRIBUNAL WAS CONSIDERED IN A MISCELLANEOUS PETITION BY THE ITAT A BENCH AHMEDABAD IN MA NOS.336,337/AHD/2006 (IN ITA NOS.512 & 2522/AHD/200 0 FOR A.YS.1996-97 & 1997-98 RESPECTIVELY) DATED 30/09/20 11 THROUGH WHICH THAT FACTUAL FINDING IN RESPECT OF THE CRIMINAL COM PLAINT FILED IN THE COURT OF CHIEF JUDICIAL MAGISTRATE WAS RECORDED AND HELD THAT IN CRIMINAL CASE NO.1076/86 THE DATE WAS 08/10/1986. THE RELEVANT P ORTION WHILE RECALLING THE AFOREMENTIONED ORDER OF THE TRIBUNAL IS REPRODUCED BELOW:- 9. WE HAVE CONSIDERED RIVAL SUBMISSION, PERUSED TH E MATERIAL ON RECORD AND HAVE GONE THROUGH THE JUDGEMNTS CITED BY THE LD. D.R. FIRST WE DECIDE THE FACTUAL ASPECT. ON PAG E 9 OF THE IMPUGNED ORDER, IT IS OBSERVED BY THE TRIBUNAL THAT THE CRIMINAL COMPLAINT WAS FILED BY THE ASSESSEE IN 1996 FOR THE RECOVERY OF RS.2,75,848/- I.E. TEN YEARS AFTER THE INCIDENT HAD TAKEN PLACE AND THE YEAR IN WHICH THE CLAIM WAS MADE BY THE ASSESSE E. THE TRIBUNAL DECISION IS MAINLY ON THIS BASIS THAT SUCH COMPLAINT CANNOT HAVE ANY BEARING TO DECIDE THE ISSUE IN DISP UTE. IN THE PAPER BOOK FILED DURING THE COURSE OF HEARING OF AP PEAL, ON PAGES 51-57 IS THE COPY OF CRIMINAL COMPLAINT FILED IN TH E COURT OF CHIEF JUDICIAL MAGISTRATE OF RAJKOT HAVING CRIMINAL CASE NO.1076/86 WHICH IS DATED 08.10.1986 AND ON PAGES 76-78 IS THE COPY OF POLICE PARTICULARS REGARDING INTERVIEW AND RECORDING OF ST ATEMENTS ETC ON 20.09.1986. IN THE LIGHT OF THESE DOCUMENTS, WE FI ND THAT THERE IS AN APPARENT MISTAKE IN THE TRIBUNAL ORDER TO SAY TH AT THE POLICE COMPLAINT WAS FILED BY THE ASSESSEE AFTER TEN YEARS FROM THE DATE WHEN THE INCIDENT HAS TAKEN PLACE BECAUSE AS PER TH ESE DOCUMENTS AVAILABLE IN THE PAPER BOOK, POLICE COMPLAINT WAS F ILED BY THE ASSESSEE IN THE YEAR 1986 ITSELF I.E. THE YEAR IN W HICH THE INCIDENT HAS TAKEN PLACE. HENCE, THERE IS FORCE IN THIS CO NTENTION OF THE ASSESSEE THAT THERE IS AN APPARENT MISTAKE IN THE TRIBUNAL ORDER ITA NO. 2552/AHD/2000 M/S.NATWARLAL SHAMALDAS & CO. VS. ITO ASST.YEAR - 1987-88 - 4 - WHILE DECIDING GROUND NO.3 IN THE APPEAL OF THE ASS ESSEE FOR THE ASSESSMENT YEAR 1987-88 ITA NO.2552/AHD/2000. SINCE, THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL ON THE BASIS OF ASSUMING THE WRONG FACTS, WE FEEL THAT THIS ISSUE SHOULD BE DECIDED AFRESH BY THE TRIBUNAL AFTER HEARING BOTH THE SIDES AND HENCE , FOR THIS LIMITED PURPOSE, WE RECALL THE TRIBUNAL ORDER IN RESPECT OF ITA NO.2552/AHD/2000 FOR DECIDING GROUND NO.3 AFRESH. THE REGISTRY IS DIRECTED TO FIX THE APPEAL FOR HEARING IN DUE CO URSE OF TIME AFTER ISSUING NOTICES TO BOTH THE SIDES. 3. HEARD BOTH SIDES. VIDE A PAPER BOOK-II, THE APP ELLANT HAS PLACED ON RECORD AN ORDER OF THE COURT DATED 9/12/1998. T HIS JUDGEMENT OF THE CIVIL JUDGE (C.D.), RAJKOT WAS PASSED AFTER THE IMP UGNED ASSESSMENT ORDER U/S.143(3) OF THE ACT DATED 31/01/1990. IT HAS ALSO BEEN POINTED OUT THAT THE FIRST APPELLATE AUTHORITY HAS AFFIRMED THE ADDITION PRIMARILY ON THE GROUND THAT THE LEGAL PROCEEDINGS WERE NOT C ONCLUDED. SINCE A JUDGEMENT OF THE RESPECTED COURT IS PLACED ON RECOR D AND ADMITTEDLY THAT JUDGEMENT WAS PRONOUNCED AFTER THE COMPLETION OF TH E ASSESSMENT THEREFORE PARTIES APPEARING BEFORE US HAVE FAIRLY E XPRESSED TO RESTORE THIS ISSUE BACK TO THE ASSESSMENT STAGE SO THAT THE ISSU E CAN BE DECIDED IN THE LIGHT OF THE SAID VERDICT OF THE COURT AND ANY OTHE R INVESTIGATION AS DEEM FIT. IN VIEW OF THIS AND CONSIDERING THE SUGGESTI ON OF BOTH THE SIDES, WE HEREBY RESTORE THIS ISSUE BACK TO THE FILE OF THE A O SO THAT HE CAN DECIDE AFRESH THE ADMISSIBILITY OF THE CLAIM. WE ALSO DIR ECT THE ASSESSEE TO FULLY CO-OPERATE FOR AN EARLY DISPOSAL OF THIS MATTER FOU ND TO BE PENDING SINCE LONG. ITA NO. 2552/AHD/2000 M/S.NATWARLAL SHAMALDAS & CO. VS. ITO ASST.YEAR - 1987-88 - 5 - 4. REST OF THE GROUNDS STOOD ALREADY DECIDED VIDE O RDER OF THE TRIBUNAL CITED-SUPRA DATED 31/03/2005. THIS APPE AL OF THE ASSESSEE MAY THEREFORE BE TREATED AS ALLOWED FOR STATISTICAL PUR POSES ONLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE MA Y BE TREATED AS PARTLY ALLOWED BUT FOR STATISTICAL PURPOSES. SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHRAWA T ) VICE PRESIDENT JUDI CIAL MEMBER AHMEDABAD; DATED 30 /11/ 2011 7.. , . ../ T.C. NAIR, SR. PS (6 2 /&8 (8*& (6 2 /&8 (8*& (6 2 /&8 (8*& (6 2 /&8 (8*&/ COPY OF THE ORDER FORWARDED TO : 1. +. / THE APPELLANT 2. /0+. / THE RESPONDENT. 3. $$ & %9 / CONCERNED CIT 4. %9() / THE CIT(A)-II, AHMEDABAD 5. 8<= /& , , / DR, ITAT, AHMEDABAD 6. = >3 / GUARD FILE. (6 % (6 % (6 % (6 % / BY ORDER, 08& /& //TRUE COPY// ! !! !/ // / $ $ $ $ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION.. 30.11.11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30.11.11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 30.11.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.11.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER