M/s Bharti Bhushan Jindal, Ludhiana V. Addl. CIT, Ludhiana

ITA 277/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80897 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-09-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 11-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Question of law; Bad and doubtful debts
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 277/CHD/2013 ASSESSMENT YEAR: 2005-06 BHARTI BHUSHAN JINDAL, V THE ADDL.CIT, PROP. M/S JINDAL ELECTRIC & RANGE I, MACHINERY CORPORATION, LUDHIANA. C-57, FOCAL POINT, LUDHIANA. PAN: ACVPJ3724B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SI NGH RESPONDENT BY : SHRI J.S. NAGAR DATE OF HEARING : 24.09.2014 DATE OF PRONOUNCEMENT : 24.09.2014 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS)-II LUDHIANA DATED 22.02.2013 FOR ASSES SMENT YEAR 2005-06, CHALLENGING THE ADDITION OF RS. 6,90,000/- . 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSEE IS DERIVING INCOME FROM BUSINESS, CAPITAL GAINS AND OTHER SOURC ES. DURING THE COURSE OF THE SAID CARRYING ON OF THE BUSINESS, CERTAIN AMOUNTS HAD BEEN ADVANCED BY THE ASSESSEE ON INTERE ST AGAINST DULY EXECUTED HUNDI/PROMISSORY NOTES. THE SAID INT EREST WAS BEING OFFERED AS INCOME FROM OTHER SOURCES IN THE HANDS OF THE ASSESSEE FROM YEAR TO YEAR. DURING THE COURSE OF A SSESSMENT PROCEEDINGS, IT WAS SEEN THAT ASSESSEE HAD DEBITED ON ACCOUNT 2 OF LOANS WRITTEN OFF AS IRRECOVERABLE, A SUM OF RS. 6,90,000/- AGAINST THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSEE CONTENDED THAT THE LOSS ON ACCOUNT OF LOANS WRITTEN OFF IS ALLOWABLE AGAINST INTEREST INC OME. THE ASSESSING OFFICER REFERRED TO PROVISIONS OF SECTION 36(2)(I) OF THE IT ACT AND HELD THAT THESE PROVISIONS WERE NOT APPL ICABLE IN ASSESSEE'S CASE AND EVEN THE DEDUCTION IS NOT ALLO WABLE UNDER SECTION 57 OF THE ACT. THE ADDITION WAS ACCORDINGL Y MADE. 3. THE LD. CIT(APPEALS) FOUND THAT THE ISSUE IS COV ERED AGAINST THE ASSESSEE BY ORDER OF ITAT DATED 13.07.2 012 IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2004-05 IN ITA NO. 459/CHD/2011 AND IDENTICAL CLAIM WAS DISALLOWED. T HE ORDER OF THE TRIBUNAL IS REPRODUCED IN THE IMPUGNED ORDER AN D THE LD. CIT(APPEALS) FOLLOWING THE ORDER OF THE TRIBUNAL, D ISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 4. THE ASSESSEE INSTEAD OF ARGUING THE APPEAL, FILE D A DECLARATION UNDER SECTION 158A(1) OF THE IT ACT AND SUBMITTED THAT THE ASSESSEE HAS PREFERRED APPEAL BEFORE HON'B LE HIGH COURT IN PRECEDING ASSESSMENT YEAR 2004-05 AND THE FOLLOWING QUESTION IS PENDING BEFORE HON'BLE PUNJAB & HARYANA HIGH COURT UNDER SECTION 260A OF THE IT ACT : WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ACTION FOR REJECTING THE CLAIM FOR ALLOWA NCE OF BAD DEBTS UNDER SECTION 36(1)(VII) RW 36(2) IS JUSTIFIED AS A REVENUE ITEM AND OR CAPITAL LOSS, WITHOUT CONSIDERING THE STAND OF CHARGING TO TAX THE RECOVERY SO MADE UNDER SECTION 41(1) OF THE ACT ? 5. THE ASSESSEE, THEREFORE, STATED THAT SINCE IDENT ICAL QUESTION IS PENDING IN THE PRESENT APPEAL BEFORE TH E ITAT, CHANDIGARH BENCH IN ASSESSMENT YEAR 2005-06, THEREF ORE IF THE 3 TRIBUNAL AGREES TO APPLY TO THE ABOVE CASE, REFERRE D TO ABOVE, THE FINAL DECISION/QUESTION OF LAW IN THE ASSESSMEN T YEAR UNDER APPEAL, THE ASSESSEE SHALL NOT RAISE THE SAID QUEST ION OF LAW BEFORE HON'BLE HIGH COURT OR BEFORE THE HON'BLE SUP REME COURT OF INDIA. COPY OF THE SAME WAS SUPPLIED TO THE REV ENUE DEPARTMENT FOR FILING THEIR NO OBJECTION. THE AC IT, CIRCLE I, LUDHIANA FILED THE REPLY AND DID NOT DISPUTE THE CO NTENTION OF THE ASSESSEE AND REQUESTED THAT THE APPEAL MAY BE K EPT PENDING TILL THE DECISION OF THE HON'BLE HIGH COURT IN VIEW OF THE DECLARATION FILED ABOVE AND TRIBUNAL MAY TAKE D ECISION ACCORDINGLY. 6. ON GOING THROUGH THE DECLARATION FILED BY ASSESS EE UNDER SECTION 158A(1) OF THE IT ACT ABOVE, IT IS CLEAR TH AT THE ASSESSEE FURNISHED DECLARATION UNDER SECTION 158A IN ACCORDA NCE WITH LAW ON WHICH THE CORRECTNESS OF THE CLAIM OF ASSESS EE IS NOT DISPUTED BY THE ASSESSING OFFICER. WE, THEREFORE, FIND THAT SINCE IDENTICAL QUESTION IS PENDING BEFORE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF THE SAME ASSESSEE , IN ASSESSMENT YEAR 2004-05, WHICH IS ALSO INVOLVED IN THE PRESENT APPEAL, THEREFORE, WE ADMIT THE CLAIM OF ASSESSEE A ND DIRECT THAT THE ISSUE IN APPEAL BEFORE US IS COVERED AGAIN ST THE ASSESSEE BY ORDER OF ITAT IN THE CASE OF THE ASSESS EE FOR ASSESSMENT YEAR 2004-05 AND FINAL DECISION OF THE H IGH COURT IS AWAITED/PENDING IN ASSESSMENT YEAR 2004-05 ON ID ENTICAL ISSUE. ACCORDINGLY, THE APPEAL OF ASSESSEE IS DISP OSED OFF AND WE HOLD THAT THE ISSUE IN APPEAL IS COVERED AGAINST THE ASSESSEE AT PRESENT AND APPEAL OF THE ASSESSEE IS LIABLE TO BE DISMISSED AND IS DISMISSED. WE FURTHER DIRECT THAT WHEN THE DECISION ON 4 THE QUESTION OF LAW IN PRECEDING ASSESSMENT YEAR 20 04-05 ABOVE BECOME FINAL, IT SHALL BE APPLIED TO THE ASSE SSMENT YEAR UNDER APPEAL AND NECESSARY AMENDMENT IN THE ORDERS SHALL BE MADE UNDER SUB-SECTION 4 OF SECTION 158A OF THE IT ACT IN CONFORMITY WITH THE JUDGEMENT OF HON'BLE PUNJAB & H ARYANA HIGH COURT. 7. IN VIEW OF THE ABOVE, WE DISMISS APPEAL OF THE A SSESSEE ACCORDINGLY AND DECIDE THE QUESTION AGAINST THE ASS ESSEE AT PRESENT. 8. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS DIS MISSED IN TERMS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH SEPTEMBER,2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24 TH SEPTEMBER,2014. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH