The ITO, Ward-3(4), Ahmedabad V. M/s. Milap Enterprise, Ahmedabad

ITA 2771/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2326 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-01-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 29-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI MUKUL SHRAWAT,JM & SHRI A N PAHUJA,AM ITA NO.2771/AHD/2010 (ASSESSMENT YEAR:-2007-08) INCOME-TAX OFFICER, WARD- 3(4), AHMEDABAD V/S M/S MILAP ENTERPRISE 9, METRO PLAZA, NEAR DINBAI TOWER, LAL DARWAJA, AHMEDABAD PAN: AAMFM 0145 N [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI RAJDEEP SINGH, DR ASSESSEE BY:- NONE O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 27- 07-2010 OF THE LD. CIT(APPEALS)-VII, AHMEDABAD, RAI SES THE FOLLOWING GROUNDS:- 1 THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELE TING THE DISALLOWANCES MADE BY THE AO OF RS.1,22,483/- AND RS.3,51,100/- O N ACCOUNT OF BAD DEBTS. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO SIN CE THE ASSESSEE HAS FAILED TO DISCLOSE HIS TRUE INCOME. 2. AT THE OUTSET, NONE APPEARED ON BEHALF OF THE AS SESSEE. CONSIDERING THE NATURE OF ISSUE INVOLVED, WE DECIDE D TO DISPOSE OF THE APPEAL AFTER HEARING THE LEARNED DEPARTMENTAL R EPRESENTATIVE. 3. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT THE E-RETURN DECLARING INCOME OF RS.3,15,790/- FILED ON 30-11-2 007 BY THE ASSESSEE, RUNNING A RELIANCE WEB STORE, AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REF ERRED TO AS THE ACT], WAS SELECTED FOR SCRUTINY WITH THE ISSUE OF A NOTICE U/S 143(2) OF THE ACT ON 26-09-2008.DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER[AO IN SHORT] NOT ICED THAT THE ITA NO.2771/AHD/2010 2 ASSESSEE, INTER ALIA, CLAIMED DEDUCTION FOR BAD D EBTS FOR GOODS SUPPLIED TO DEALERS FOR SALES PROMOTION-RS. 122483 /- & FOR SALES PROMOTION FOR RELIANCE SCHEMES-RS. 351100/-.TO A Q UERY BY THE AO, THE ASSESSEE FURNISHED A LIST OF CUSTOMERS AS DETAI LED IN PARA 3.3 OF THE ASSESSMENT ORDER AND EXPLAINED THAT AFTER SAL E OF GOODS, PART PAYMENT HAS BEEN RECEIVED AND BALANCE WAS WRITTEN O FF AS BAD DEBT BY THE ASSESSEE. LIKEWISE , PAYMENT OF RS. 3,51,100 FOR THE GOODS SOLD TO ONE SHRI PANKAJBHAI COLD NOT BE RECOVERED AND THEREFORE, WRITTEN OFF . HOWEVER, THE AO DOUBTED THE GENUINENESS OF THE DOCU MENTS PRODUCED BEFORE HIM AND THEREFORE, DISALLOWED THE CLAIM FOR DEDUCTI ON OF THE AFORESAID AMOUNT AS BAD DEBT DURING THE YEAR. 4. ON APPEAL, THE LD. CIT(A) ALLOWED THE CLAIM IN THE LIGHT OF DECISION OF THE HONBLE APEX COURT IN TRF LIMITED VS. CIT 323 ITR 3 97 (SC). 5. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LEARNED D R MERELY SUPPORTED THE FINDINGS OF THE AO. 6. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE F ACTS OF THE CASE AS ALSO THE DECISION RELIED UPON BY THE LD. CI T(A). WE FIND THAT THE HON'BLE SUPREME COURT IN THE CASE OF TRF LIMITE D(SUPRA) WHILE ADJUDICATING A SIMILAR CLAIM CONCLUDED AS UNDER: THIS POSITION IN LAW IS WELL-SETTLED. AFTER 1ST APRIL,1989 IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DE BT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRI TTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE... 6.1. IN THE LIGHT OF VIEW TAKEN BY THE HONBLE APE X COURT IN THEIR AFORESAID DECISION IN TRF LTD.(SUPRA) AND INDISPUTA BLY DEBTS HAVING BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNTS, APPAREN TLY THE AMOUNT OF RS.1,22,483/- & RS.3,51,100/- WRITTEN OFF IN THE B OOKS ARE ADMISSIBLE DEDUCTION IN TERMS OF PROVISIONS OF SEC. 36(1)(VII) R.W.S. 36(2) OF THE ACT. THEREFORE, GROUND NO.1 IS DISMISSED. ITA NO.2771/AHD/2010 3 7. GROUND NO.2 BEING GENERAL IN NATURE ,DOES NOT R EQUIRE ANY SEPARATE ADJUDICATION AND IS,THEREFORE,DISMISSED. 8. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 13 -01-2011 SD/- SD/- (MUKUL SHRAWAT) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 13-01-2011 COPY OF THE ORDER FORWARDED TO: 1. M/S MILAP ENTERPRISE, 9, METRO PLAZA, NEAR DINBA I TOWER, LAL DARWAJA, AHMEDABAD 2. THE ITO, WARD-3(4), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-VII, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD