Citi Financial Retail Serrvices (I) Ltd., CHENNAI V. ACIT, CHENNAI

ITA 2752/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86330 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Opportunity of being heard; Bad and doubtful debts; Competent authority

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . ' #$ , % & BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ./ ITA NO.2752/MDS/2014 % $ ($ / ASSESSMENT YEAR : 2006-07 M/S CITI FINANCIAL RETAIL SERVICES (I) LTD. [NOW MERGED WITH CITICORP FINANCE (INDIA) LIMITED], 117, RADHAKRISHNAN SALAI, MYLAPORE, CHENNAI - 600 004. PAN :AAACN 2379 N V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(3), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI V.S. JAYAKUMAR, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI N. MADHAVAN, JCIT ' . 0 / DATE OF HEARING : 24.02.2015 1( . 0 / DATE OF PRONOUNCEMENT: 05.03.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I , CHENNAI, DATED 28.07.2014 RELEVANT TO THE ASSESSMENT YEAR 20 06-07. 2 I.T.A. NO. 2752/MDS/2014 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FINANCING. THE ASSESSEE HAS MADE A CLA IM OF BAD DEBTS WRITTEN OFF TO THE TUNE OF ` 12,20,10,010/- AND ALSO HAS CLAIMED ACCRUAL OF INTEREST. THE A.O. HAS DISALLOW ED BOTH THE CLAIMS OF THE ASSESSEE. THE LD. CIT(APPEALS) BY FO LLOWING THE ORDER OF THE TRIBUNAL IN THE ASSESSEE'S OWN CASE FO R ASSESSMENT YEAR 2005-06, HAS CONFIRMED THE ORDER OF THE A.O. 3. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER IN APPEAL BEFORE THE TRIBUNAL. AT THE TIME OF HEARING , THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUES INVOLVED IN THIS APPEAL HAD BEEN CONSIDERED BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S CITI FINANCIAL RETAIL SERVICES INDIA LT D. & M/S CITY CORP FINANCE (INDIA) LTD. V. ACIT IN T.C.(A).NOS.1136 OF 2009, 399 OF 2009, 184 OF 2014 AND 737 OF 2014 DATED 22.09.2014 WHEREIN THE HON'BLE JURISDICTIONAL HIGH COURT HAS SENT THE MATT ER BACK TO A.O. TO CONSIDER IN ACCORDANCE WITH LAW. THE LD. COUNSEL S UBMITTED THAT THE ASSESSEES CASE IS SIMILAR TO THAT OF THE CASE REMITTED BY THE HON'BLE JURISDICTIONAL HIGH COURT. HE PLEADED THAT BY FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT, THE ASSESSEES CASE MAY BE REMITTED BACK TO A.O. TO CONSIDER THE I SSUES AFRESH. 3 I.T.A. NO. 2752/MDS/2014 4. ON THE OTHER HAND, LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH SIDES AND PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE HAS MADE CLAIMS BEFORE THE A.O. REGARDING BAD DEBTS AND ALSO ACCRUAL OF INTEREST. THE A.O. HAS DENIED THE CLAIMS OF THE ASSESSEE AND THE LD. CIT(APPEALS) CONFIRMED THE SAME BY FOLLOWING TH E ORDER OF THE TRIBUNAL IN ASSESSEE'S OWN CASE. AS SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THESE ISSUES HAVE TO BE REMITTED TO A.O. IN THE LIGHT OF THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S CITI FINANCIAL RETAIL SERVICES INDIA LT D. & M/S CITY CORP FINANCE (INDIA) LTD. V. ACIT (SUPRA), WHEREIN THE H ON'BLE JURISDICTIONAL HIGH COURT HAS REMITTED THE ISSUES B ACK TO THE A.O. VIDE PARAGRAPHS 15, 16 AND 17 WHICH ARE EXTRACTED A S UNDER:- 15. IN VIEW OF THE LAW LAID DOWN IN THE CASE OF (TR F LTD. VS COMMISSIONER OF INCOME TAX) REPORTED IN (2010) 3 23 ITR 397 WE HAVE NO HESITATION TO HOLD THAT BAD DEBTS IF WRITTEN OFF, ON THE ACCOUNTS OF THE ASSESSEE AND APPROPRIAT ELY CLAIMED BEFORE THE COMPETENT AUTHORITY, THE AUTHORI TIES ARE BOUND TO CONSIDER THE SAME IN THE LIGHT OF THE DECI SION OF THE HON'BLE SUPREME COURT. 16. THE ISSUE AS TO WHETHER THE CLAIM OF THE ASSES SEE SEEKING ALLOWANCE FOR DEBTS WRITTEN OFF AS IRRECOVE RABLE, IRRESPECTIVE OF WHETHER THEY ARE WRITTEN OFF AFTER 180 DAYS OR AFTER 120 DAYS AS PER THE CHANGED MANAGEMENT POLICY IN RESPECT OF EACH ASSESSMENT YEAR NEEDS TO BE TESTED IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT. TO THAT EXTENT WE HOLD THAT THE DECISION OF THE ORIGINAL AU THORITY, 4 I.T.A. NO. 2752/MDS/2014 COMMISSIONER OF INCOME TAX (APPEALS) AND THAT OF TH E INCOME TAX TRIBUNAL REQUIRES RECONSIDERATION. 17. IN ORDER TO CUT SHORT THE LITIGATION TAKING CU E FROM THE PLEA OF MR. T. RAVIKUMAR, LEARNED COUNSEL APPEARING FOR THE DEPARTMENT, WE ARE INCLINED TO SET ASIDE THE ORDER AND REMIT THE MATTER TO THE COMMISSIONER OF INCOME TAX (APPEA LS) TO RECONSIDER THE ASSESSMENT PROCEEDINGS, AS THE FIRST APPELLATE AUTHORITY WHO IS ENTITLED TO CONSIDER THE ASSESSMENT ORDER AS CONTINUATION OF ORIGINAL PROCEE DINGS. 6. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND REMIT THE ISSUES BACK TO THE FILE OF THE A.O. TO DECIDE THE ISSUES AFRESH IN ACCORDANCE WITH LAW KEE PING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF M/S CITI FINANCIAL RETAIL SERVICES INDIA LTD. & M/S CIT Y CORP FINANCE (INDIA) LTD. V. ACIT (SUPRA) INTO CONSIDERATION AND AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 5 TH OF MARCH, 2015 AT CHENNAI. SD/- SD/- ( . ) ( . ' #$ ) (A. MOHAN ALANKAMONY) (V. DURGA RAO) /ACCOUNTANT MEMBER % /JUDICIAL MEMBER /CHENNAI, > /DATED, THE 5 TH MARCH, 2015. KRI. 5 I.T.A. NO. 2752/MDS/2014 ? . ,%0@A BA(0 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. ' C0 () /CIT(A)-I, CHENNAI 4. ' C0 /CIT, CHENNAI-1, CHENNAI 5. A E# ,%0% /DR 6. #$ F /GF.