ITO 4(3)(4), MUMBAI V. M/S. SUVINO EXPORTS PVT.LTD., MUMBAI

ITA 2926/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1537 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 31-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 07-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L K AGRAWAL
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI R.S.PADVEKAR, JM ITA NO.2926/MUM/2009 : ASST.YEAR 2005-2006 THE INCOME TAX OFFICER WARD 4(3)(4) MUMBAI. VS. M/S.SUVINO EXPORTS PRIVATE LIMITED 32 NARAYAN NIWAS, 3 RD FLOOR 149/151 DADISETH AGIARY LANE MUMBAI 400 002. PA NO.AAACS7206F. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI L.K.AGRAWAL RESPONDENT BY : SHRI M.SUBRAMANIAN O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 16.3.2009 IN RELATION TO THE ASSESSMENT YEAR 2005-2006. 2. THE ONLY ISSUE RAISED THROUGH VARIOUS GROUND IS AGAINST THE DELETION OF ADDITION ON ACCOUNT OF BAD DEBTS. BRIEFLY STATED TH E FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED BAD DEBT OF RS.47,05,020. ON BEING CALLED UPON TO SUBSTANTIATE THE GENUINENESS OF THE BAD DEBTS, THE ASSESSEE SUBM ITTED VIDE ITS REPLY DATED 16.3.2007 THAT THE BAD DEBTS WERE IN RELATION TO TH E EXPORT OF SALT MADE IN BAGS / BULK TO THE CUSTOMERS IN PHILIPPINES. SINCE THE ASS ESSEE WAS UNABLE TO RECOVER THIS SUM FROM THE CUSTOMERS IN SPITE OF VARIOUS FOLLOW U P ACTIONS, IT WAS STATED THAT NO CHOICE WAS LEFT BUT TO WRITE IT OFF AS BAD DEBTS. T HE ASSESSING OFFICER MADE THE ADDITION ON THE GROUND THAT THE ASSESSEE HAD NOT ES TABLISHED AS TO HOW THE DEBT HAS BECOME BAD. THE LEARNED CIT(A), RELYING ON THE SPE CIAL BENCH ORDER IN THE CASE OF DCIT VS. OMAN INTERNATIONAL BANK SAOG [(2006) 100 I TD 285 (MUM.) (SB)],. DELETED THE ADDITION, AGAINST WHICH THE REVENUE HAS COME UP IN APPEAL BEFORE US. ITA NO.2926/MUM/2009 M/S.SUVINO EXPORTS PRIVATE LIMITED. 2 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE SPECIAL BENCH ORDER PASSED IN THE CASE OF OMAN INTERNATIONAL BANK SAOG, RELIED ON BY THE LD. CIT(A), NOW STANDS APPROVED B Y THE HONBLE BOMBAY HIGH COURT IN DCIT VS. OMAN INTERNATIONAL BANK SAOG [(2009) 313 ITR 128 (BOM.)]. MORE RECENTLY, THE HONBLE SUPREME COURT IN T.R.F.LTD. VS. CIT [(2010) 323 ITR 397 (SC)] HAS HELD THAT AFTER 1.4.1989 THE ASSESSEE IS NOT REQUIRED TO ESTABLISH THAT THE DEBT HAS, IN FACT, BECOME BAD IN THE PREVIOUS YEAR BUT SIMPLE WRITE OFF OF TRADING DEBT IS SUFFICIENT FOR ALLOWING DEDUCTION U/S.36(1)(VII). ADVERTING TO THE FACTS OF THE INSTANT CASE, WE FIND THAT THE ASSESSEE CLAIMED DEDUCTION OF BAD DEBTS BY WRITING IT OFF IN THE BOOKS OF ACCOUNT. FURTHER IT IS NOT THE CASE OF THE REVENUE THAT THE CONDITIONS OF SECTION 36(2) WERE NOT SATISFIED. IN VIEW OF THE AFORE NOTED PRECEDEN TS, IT IS CLEAR THAT THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THIS ADDITION. WE, THEREFORE, UPHOLD THE VIEW OF THE LD. FIRST APPELLATE AUTHORITY ON THIS SCORE. 4. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 4 TH DAY OF JUNE, 2010. SD/- SD/- ( R.S.PADVEKAR ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 4 TH JUNE, 2010 . DEVDAS* ITA NO.2926/MUM/2009 M/S.SUVINO EXPORTS PRIVATE LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A)-XV, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.