EPIC ALLOY STEEL PRIVATE LTD., Raigarh(C.G) V. THE DY.CIT-1(1), BILASPUR(CG)

ITA 29/BIL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8947 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHEETAL VERMA
• Assessee Lawyers: S R RAO
• Keywords: Bad and doubtful debts

Judgement Text

1 ITA NO.29/RPR/2015 ASSESSMENT YEAR : 2010-2011 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.29/RPR/2015 ASSESSMENT YEAR : 2010-2011 EPIC ALLOYS STEEL PVT LTD., 132D, O. .P. JINDAL INDUSTRIAL PARK, PUNJIPATHRA, RAIGARH VS. DCIT-1(1), MAHIMA COMPLEX, VYPAR VIHAR, BILASPUR PAN/GIR NO.AABCE 2865 P (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.R.RAO, AR REVENUE BY : MRS SHEETAL VERMA, DR DATE OF HEARING : 18/01/ 2018 DATE OF PRONOUNCEMENT : 19 /01/ 2018 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDE R OF THE CIT(A)- BILASPUR DATED 25.9.2014 FOR THE ASSESSMENT YEAR 2010-20 11. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CI T(A) ERRED IN CONFIRMING THE ADDITION MADE AGAINST BAD DEBTS WRITTE N OFF U/S.36(1)(VII) OF 2 ITA NO.29/RPR/2015 ASSESSMENT YEAR : 2010-2011 THE I.T.ACT, 1961 TO THE EXTENT OF RS.1,98,472/- ON T HE GROUND THAT LEDGER ACCOUNT OR OTHER EVIDENCE OF ACTUAL WRITING OFF BAD DEB T WAS NOT FILED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PR IVATE LIMITED COMPANY FILED THE RETURN OF INCOME ON 14.10.2010 SHOWI NG TOTAL INCOME OF RS.24,08,330/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCR UTINY. ACCORDINGLY, NOTICE UNDER SECTION 143(2) OF THE I.T.ACT, 1961 WAS ISSUED AND SERVED UPON THE ASSESSEE. IN COMPLIANCE TO THE NOTICES ISSUED , LD A.R. APPEARED AND PRODUCED BOOKS OF ACCOUNT AND THEY HAVE BE EN TEST CHECKED. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE COMPANY IS ENG AGED IN THE MANUFACTURING OF MS INGOT AND TRADING IN PIG IRON, MINERALS, ORES & SCRAP. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CLAIMED DEDU CTION OF RS.7,06,731/- AS SUNDRY BALANCES WRITTEN OFF. THE ASSESSE E COULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT THE DEBTORS WERE FINA NCIALLY NOT IN A POSITION TO MAKE PAYMENTS AND ALSO THERE IS NO INFORMAT ION ABOUT REFUSAL OF PAYMENT. SINCE THE ASSESSEE COULD NOT PRODUCE THAT THE SU NDRY DEBTORS ARE ACTUALLY WRITTEN OFF, THE ASSESSING OFFICER WAS OF THE VI EW THAT THE ASSESSEE CANNOT CLAIM DEDUCTION. THEREFORE, HE MADE ADDITION O F RS.7,06,731/- ALONGWITH OTHER ADDITIONS AND ASSESSED THE INCOME AT RS.3 2,86,330/-. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 3 ITA NO.29/RPR/2015 ASSESSMENT YEAR : 2010-2011 5. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT AN AM OUNT OF RS.7,06,731/- WAS WRITTEN OFF UNDER THE HEAD SUNDRY B ALANCE WRITTEN OFF. IT WAS SUBMITTED THAT SINCE THE AMOUNT WAS NOT RECOVERED FROM THE PARTIES, THE AMOUNT WAS WRITTEN OFF AS IRRECOVERABLE IN THE ACCO UNT OF THE ASSESSEE. HE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TRF LTD VS CIT, 323 ITR 397 (SC). THE CIT(A) CONSIDERED THE SUB MISSIONS OF THE ASSESSEE AND THE FINDINGS OF THE ASSESSING OFFICER AND OBSERV ED THAT AS REGARDS TO RS.5,08,259/-, WRITTEN OFF AS BAD DEBT IN THE CASE OF NITESH UDYOG LIMITED IS AN ADMISSIBLE AMOUNT, HOWEVER, THERE IS NO DISPUTE TO THE FACT THAT THE LEDGER ACCOUNTS AND OTHER EVIDENCE OF ACTUAL WR ITING OFF OF THE VARIOUS SUNDRY DEBTORS HAVE NOT BEEN FILED IN REGARD T O BALANCE AMOUNT OF RS.1,98,472/-. THEREFORE, HE CONFIRMED THE ADDITION OF RS.1,98,472/-. 6. BEFORE US, LD A.R. SUBMITTED THAT THE CIT(A) ERRE D IN GRANTING PARTIAL RELIEF IN RESPECT OF THE BAD DEBTS IRRESPECTIVE OF THE F ACT THAT THE ASSESSEE HAS WRITTEN OFF THE AMOUNT IN THE BOOKS OF ACCOUNT. LD D.R. SUPPORTED THE ORDER OF THE CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT THE AMOUNTS HAVE BEEN WRITTEN OFF IN THE PREVIOUS YEAR. T HE DISPUTE IS CONFINED TO THE QUESTION WHETHER THE ASSESSEE HAS BROUGHT ON RECORD REASONABLE 4 ITA NO.29/RPR/2015 ASSESSMENT YEAR : 2010-2011 EVIDENCE TO SUBSTANTIATE THAT THE AMOUNT WRITTEN OFF H AS ACTUALLY BECOME BAD AND INCAPABLE OF BEING RECOVERED FROM THE DEBTORS CONCERNED. ON THESE FACTS AND PARTICULARLY IN VIEW OF THE HONBLE SUPREME COURT JUDGEMENT IN THE CASE TRF LTD (SUPRA), WHEREIN, THE HONBLE SUPREME C OURT HAS HELD THAT A MERE WRITE OFF OF THE DEBT IS ENOUGH TO CLAIM DEDUCTI ON AS BAD DEBT AND THAT THE ASSESSE IS REQUIRED TO ESTABLISH THAT AMOUNTS HAVE ACT UALLY BECOME BAD, THE ASSESSE MUST SUCCEED IN HIS CLAIM. HENCE, IN VIEW OF THE DECISION IN THE CASE OF TRF (SUPRA), WE UPHOLD THE GRIEVANCE OF THE ASSES SEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF RS.1,98,47 2/- AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 19 /01/2018. SD/- SD/- (N.S SAINI) ( PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIALMEMBER RAIPUR; DATED 19 /01/2018 B.K.PARIDA, SPS 5 ITA NO.29/RPR/2015 ASSESSMENT YEAR : 2010-2011 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, RAIPUR 1. THE APPELLANT : EPIC ALLOYS STEEL PVT LTD.,, 132D, O. .P. JINDAL INDUSTRIAL PARK, PUNJIPATHRA, RAIGARH 2. THE RESPONDENT. DCIT-1(1), MAHIMA COMPLEX, VYPAR VIHAR, BILASPUR 3. THE CIT(A)-BILASPUR 4. PR.CIT-BILASPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. //TRUE COPY//