Dy. Commissioner of Income Tax-VI, Lucknow V. M/s. U.P.State Bridge Corporation Ltd., Lucknow

ITA 278/LKW/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3333 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 17-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B P YADAV
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A. NO. 278 /LKW/ 2013 ASSESSMENT YEAR: 2005 - 06 DY.C.I.T. - VI, VS. M/S U.P. STATE BRIDGE CORPN. LUCKNOW. LIMITED, 16, MADAN MOHAN MALVIYA MARG,LUCKNOW. PAN:AAACU3258K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRAVEEN KUMAR, CIT, D.R. RESPONDENT BY : SHRI B. P. YADAV, ADVOCATE DATE OF HEARING : 04 /0 6 /201 3 DATE OF PRO NOUNCEMENT :07/06/2013 ORDER PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF CIT(A) ON A SOLITARY GROUND THAT CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 1,80,60,464/ - MADE BY THE ASSESSING OFFICER BY WAY OF DISALLOWANCE OF CLAIM OF BAD DEBTS. 2. THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF BAD DEBTS ONLY FOR THE REASON THAT THE ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNT TO SUBSTANTIATE HIS CLAIM THAT THE BAD DEBTS HAVE BEEN WRITTEN OFF IN ITS BOOKS OF A CCOUNT. 2 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSION THAT THE ASSESSING OFFICER HAS MADE ADDITION WITHOUT APPLICATION OF MIND. THE WRITING OFF BAD DEBT IS APPARENT FROM SCHEDULE - G AND K OF THE FINANCIAL ACCOUNTS. THE CIT(A) HAS EXAMINED THE SAME AND HAVING CONVINCED THAT THE BAD DEBT WAS ACTUALLY WRITTEN OFF IN SCHEDULE - K OF THE FINANCIAL ACCOUNTS HE DELETED THE ADDITIONS . THE CORRESPONDING ENTRY HAS ALSO BEEN PASSED IN SCHEDULE - G I.E. SUNDRY DEBTORS IN THE FINANCIAL ACCOUNT S WHERE THE DEBTORS WERE REDUCED BY THE AMOUNT OF ` 1,80,60,464/ - INCLUDING THE PROVISIONS SHOWN AS A DIFFERENCE OF ` 1,92,52,605/ - OF THE CURRENT YEAR AND ` 1,92,159/ - OF THE IMMEDIATELY PRECEDING YEAR. THE RELEVANT OBSERVATION OF THE CIT(A) IS EXTRACTED AS UNDER: 4. GROUNDS OF APPEAL NUMBER 2 RELATES TO THE ADDITION OF RS. 1,80,60,464/ - MADE BY THE AO BY WAY OF DISALLOWANCE OF CLAIM OF BAD DEBTS. THE ASSESSEE CLAIMED BA D DEBTS OF RS. 1,80,60,464 / - . THE AO DISALLOWED THE CLAIM AS DOCUMENTARY EVIDENCE WAS NOT FURNISHED. THE APPELLANT HAS FILED WRITTEN SUBMISSIONS WHICH ARE PLACED ON RECORD. IT IS STATED THAT THE AO HAS MADE THE ADDITION WITHOUT APPLICATION OF MIND. IT IS STATED THAT THE WRITING OFF OF BAD DEBTS IS APPARENT FROM SCHEDULE G AND SCHEDULE K OF THE FINANCIAL ACCOUNTS. I HAVE EXAMINED THE FACTS AND CIRCUMSTANCES OF THE CASE. I HAVE EXAMINED THE FINDINGS OF THE ASSESSING OFFICER AND THE SUBMISSIONS OF THE APPELLANT. I FIND THAT THE AMOUNT O F RS. 1,80,60,464/ - IS CLAIMED BY ACTUAL WRITING OFF IN SCHEDULE K OF FINANCIAL ACCOUNTS RELATING TO ADMINISTRATIVE EXPENSES. CORRESPONDING ENTRY HAS BEEN PASSED IN SCHEDULE G RELATING TO SUNDRY DEBTORS IN THE FINANCIAL ACCOUNTS WHERE THE DEBTORS ARE REDUCE D BY THE AMOUNT OF RS. 1,80,60,464/ - INCLUDED IN THE PROVISIONS SHOWN AS A DIFFERENCE OF RS. 1,92,52,605/ - OF THE CURRENT YEAR AND RS. 1,92,159/ - OF THE IMMEDIATELY PRECEDING YEAR. THE CLAIM OF BAD DEBT IS THEREFORE VERIFIABLE 3 AND ALLOWABLE AS PER PROVISIO NS OF THE ACT. THE ADDITION OF RS. 1,80,60,464/ - MADE BY THE AO BY WAY OF DISALLOWANCE OF CLAIM OF BAD DEBTS IS DELETED GIVING RELIEF TO THE APPELLANT. 4. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND PLACED RELIANCE ON THE ORDE R OF THE ASSESSING OFFICER. 5. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT NOW IT HAS BEEN SETTLED POSITION OF LAW THAT ONCE THE BAD DEBT IS WRITTEN OFF IN THE ACCOUNTS, IT HAS TO BE ALLOWED WITHOUT ASCERTAINING THE FACTS WHETHER THE DEBT HAS B ECOME BAD OR NOT. 6. WE HAVE CAREFULLY EXAMINED THE ORDERS OF LOWER AUTHORITIES AND FIND THAT THE ASSESSEE HAS PLACED THE AUDITED BALANCE SHEET AND THE COPY OF ACCOUNTS BEFORE THE LOWER AUTHORITIES IN SCHEDULE - G AND K. THE BAD DEBT WAS ACTUALLY WRITTEN O FF, THEREFORE, THERE IS NO REASON FOR WHICH THE DISALLOWANCE OF BAD DEBT CAN BE MADE. THE CIT(A) HAS PROPERLY EXAMINED THE ISSUE BEFORE ALLOWING THE CLAIM OF THE ASSESSEE. THUS, WE FIND NO INFIRMITY THEREIN AND WE UPHOLD HIS ORDER. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/06/2013 ) SD/. SD/. ( PRAMOD KUMAR) ( SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/06/2013 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR