ACIT 19(3), MUMBAI V. VIKRAM SHARAD PHADNIS, MUMBAI

ITA 2687/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75182 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 02-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 20-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KARNA THAKER
• Keywords: Bad and doubtful debts; Tax effect
• Section: 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F , BENCH MUMBAI BEFORE SHRI I.P.BANSAL & SHRI D.KARUNAKARA RAO, AM ITA NO. 2687 / MUM/20 1 2 ( ASSESSMENT YEAR S : 200 6 - 0 7 ) ACIT 19(3), MUMBAI - 12 VS. VIKRAM SHARAD PHADNIS, PROP THE DESIGN STUDIO 204, ASHNA APARTMENTS, OPP. RAHEJA COLLEGE, ST. MARTIN ROAD, BANDRA (WEST), MUMBAI - 400 050 PAN/GIR NO. : A A FPP 4629 K ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR . RAVI PRAKASH /ASSESSEE BY : MR. KARNA THAKER DATE OF HEARING : 2 ND JANUARY , 201 4 DATE OF PRONOUNCEMENT : 2 ND JANUARY , 201 4 O R D E R PER I.P.BANSAL ( J .M.) : THIS APPEAL IS FILED BY THE REVENUE AND IS DIRECTED AGAINST THE ORDER DATED 31 - 1 - 2012 , PASSED BY THE LEARNED CIT (A) - 30 , MUMBAI FOR THE ASSESSMENT YEAR 200 6 - 0 7 . 2 . THE REVENUE IN ITS APPEAL HAS RAISED THE FOLLOWING GROUNDS: - ( 1 ) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF BAD DEBTS AMOUNTING TO RS.6,04, 228/ - UNDER THE PROVISION OF SECTION 36(1)(VII) OF THE I.T ACT 1961 AFTER HOLDING THAT THESE ARE NOT BAD DEBTS BUT DISCOUNT/CANCELLATION OF ORDER IGNORING THE FACTS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FAILED TO SUBSTANTIATE AND ESTABLISH THAT THE BAD D EBTS IS ITA NO. 2687 /20 1 2 2 ACTUALLY DISCOUNT ON SALE OR CANCELLATION OF ORDER ON ACCOUNT OF REJECTION OF MERCHANDISE. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,05,070 / - ON ACCOUNT OF DEEMED D IVIDEND U/S. 2(22)(E) OF THE I.T ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HAS RIGHTLY INVOKING THE PROVISION OF SECTION 2(22)(E) OF THE I. T. ACT AS THE ASSESSEE WAS HOLDING MORE THAN 20% OF THE TOTAL SHAREHOLDING OF THE COMPANY MIS, VI KRAM PHADNIS CLOTHING PVT. LTD., HAVING ACCUMULATED RESERVE AND THE ASSESSEE HAD RECEIVED LOAN FROM THE SAID COMPANY. (3) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET SIDE AND THAT OF THE AO BE RESTORED. 3 . IT IS SEE N FROM THE GROUNDS OF APPEAL RAISED BY THE REVENUE THAT DELETIONS OF ADDITIONS AGITATED BY THE REVENUE IS AN AGGREGATED SUM OF RS. 8,09,298/ - , ON WHICH TAX EFFECT IS LESS THAN RS. 3 LAKHS. T HEREFORE, THE APPEAL OF THE DEPARTMENT IS NOT MAINTAINABLE AS PROVID ED UNDER SECTION 268A(1) OF THE ACT. ACCORDINGLY, WE DISMISS THE APPEAL OF THE DEPARTMENT IN LIMINE. 4 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND JANU ARY . 201 4 . 2 ND JAN,2014 SD/ - SD/ - ( ) ( D.KARUNAKARA RAO ) ( ) ( I.P.BANSAL ) / ACCOUNTANT MEMBER / JUDICIALMEMBER MUMBAI ; DATED 02 / 01/2014 /PKM , PS ITA NO. 2687 /20 1 2 3 COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI . 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// ITA NO. 2687 /20 1 2 4 DATE INITIAL 1. DRAFT DICTATED ON 2 - 1 - 14 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 2 - 1 - 14 (DICTATION PAD HAS BEEN ENCLOSED ALONG WITH THIS ORIGINAL FILE) SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.