MACKNNON MACKENZIE CO. LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 2733/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8424 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 08-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts
• Section: 143(3)

Judgement Text

I.T.A NO.2733/ MUM/2010 MACKINNON MACKENZIE & CO.LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, F BENCH, MUMBAI. [ CORAM: PRAMOD KUMAR, AM AND R.S.PADVEKAR, JM ] I.T.A NO.2733/ MUM/2010 ASSESSMENT YEAR: 2005-06 MACKINNON MACKENZIE & CO.LTD. .. APPELLANT 4, SHOORJI VALLABHDAS MARG, BALLARD ESTATE, MUMBAI-01. PA NO.AAACM 7394 L VS DCIT, CIRCLE 2(2) ,. RESPONDEN T MUMBAI. APPEARANCES: NONE , FOR THE APPELLANT. ADJOURNMENT APPLICATION DT 23.3.2011 IS REJECTED. A.P.SINGH, FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE HAS CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED, 25 TH JANUARY, 2010, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESS MENT YEAR 2005-06. 2. GROUND NO.1 RELATES TO CONFIRMATION OF BAD DEBTS OF ` .4,30,07,865 UNDER SECTION 36(1)(VII) OF THE INCOME TAX ACT, 1961. I.T.A NO.2733/ MUM/2010 MACKINNON MACKENZIE & CO.LTD 2 3. AT THE TIME OF HEARING, NONE APPEARED FOR THE AS SESSEE. HOWEVER, AN ADJOURNMENT APPLICATION DATED 23.2.2011 WAS PLACED ON RECORD. WE REJECT THE ADJOURNMENT APPLICATION AND PROCEED TO DECIDE THE M ATTER EXPARTE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASI S OF MATERIAL AVAILABLE ON RECORD. 4. EVEN AS LEARNED DEPARTMENTAL REPRESENTATIVE FAIR LY ACCEPTS THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE HONBLE SU PREME COURTS JUDGEMENT IN THE CASE OF TRF LTD VS CIT (323 ITR 397), HE POINTS OU T THAT THE BONAFIDES OF WRITE OFF ARE TO BE NEVERTHELESS EXAMINED. WE ARE, HOWEVER, NOT PERSUADED BY THIS ARGUMENT. AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD (SUPRA), IN ORDER TO CLAIM DEDUCTIO N UNDER SECTION 36(I)(VII), A MERE WRITE OFF OF DEBT IS SUFFICIENT, AND THERE IS NO ONUS ON THE ASSESSEE TO DEMONSTRATE THAT THE DEBT SO WRITTE N OFF HAS ACTUALLY BECOME BAD. THE AUTHORITIES BELOW WERE, THEREFORE, NOT JUSTIFIED IN DECLINING THE DEDUCTION TO THE ASSESSEE. WE, ACCORD INGLY, DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWAN CE OF RS 4,30,07,865 IN RESPECT OF BAD DEBTS. THE ASSESSEE GETS THE RELI EF ACCORDINGLY. 5. GROUND NOS.II AND III ARE ALTERNATIVE GROUNDS TO GROUND NO.1. SINCE WE HAVE ALLOWED GROUND NO.1, THESE GROUNDS AR E RENDERED INFRUCTUOUS. 6. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 23 RD FEBRUARY, 2011 SD/- (R.S.PADVEKAR ) (JUDICIAL MEMBER) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 23 RD FEBRUARY, 2011 PARIDA I.T.A NO.2733/ MUM/2010 MACKINNON MACKENZIE & CO.LTD 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),5, MUMBAI 4. COMMISSIONER OF INCOME TAX, 2 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH F, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI I.T.A NO.2733/ MUM/2010 MACKINNON MACKENZIE & CO.LTD 4