Indian Furniture Products Ltd., Goa V. The Asst. Comm. Of Income-Tax. Circle-2, Margao., Margao

ITA 294/PAN/2014

• Counselvise Citation: 29424114 RSA 2014
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 26-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B BALA KRISHNA LD
• Assessee Lawyers: ELSON SEQUEIRA
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA N O . 294 /PNJ/201 4 : (A.Y 2007 - 08 ) M/S. INDIAN FURNITURE PRODUCTS LTD., JAI KISAAN BHAVAN, ZUARINAGAR, SOUTH GOA, GOA. ( APPELLANT) PAN : AAACZ1715A VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE - 2, MARGAO, GOA (RESPONDENT) ASSESSEE BY : ELSON SEQUEIRA, CA REVENUE BY : B. BALAKRISHNA , LD. DR DATE OF HEARING : 0 9 / 0 2 /201 5 DATE OF ORDER : 0 9 / 0 2 /201 5 O R D E R PER P.K. BANSAL : 1. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DT. 15.5.2014 FOR A.Y 2007 - 08. 2. SINCE GROUND NO. 3 WAS NOT PRESSED, THEREFORE, THE SAME STANDS DISMISSED AS NOT PRESSED. 3. GROUND NO. 1 IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 4. GROUND NOS. 2 & 3 RELATE TO SUSTENANCE OF THE DISALLOWANCE OF RS.16,51,602/ - BY THE CIT(A) IN RESPECT OF PROVISION FOR DOUBTFUL DEBTS. 5. WE HEARD THE RIVAL SUBMIS SIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT THE ASSESSEE HAS DEBITED PROVISION FOR DOUBTFUL DEBTS AMOUNTING TO 2 ITA NO. 294/PNJ/2014 (A.Y : 2007 - 08) RS.16,51,602/ - DURING THE YEAR. THE AO DISALLOWED THE SAME BY APPLYING EXPLANATION TO SEC. 36(1)( VII). WHEN THE MATTER WENT BEFORE THE CIT(A), BEFORE THE CIT(A) THE ASSESSEE CONTENDED THAT THE DEBTS HAD BEEN WRITTEN OFF IN A.Y 2010 - 11 AND THEREFORE THESE SHOULD BE ALLOWED AS DEDUCTION. CIT(A) DISMISSED THE GROUND. BEFORE US ALSO, THE LD. AR CONTENDED THAT THE PROVISION HAS CRYSTALLI ZED AND WRITTEN OFF IN THE BOOKS OF THE ASSESSEE IN THE A.Y 2010 - 11 AND THEREFORE THE PROVISION FOR DOUBTFUL DEBTS SHOULD BE ALLOWED. FROM READING THE PROVISIONS OF SEC. 36(1)(VII) IT IS APPARENT THAT SUBJECT TO THE PROVISIONS OF SUB - SECTION (2) THE AMOUN T OF ANY BAD DEBT OR ANY PART THEREOF HAS TO BE ALLOWED IN THE YEAR IN WHICH THE BAD DEBT HAS BEEN WRITTEN OFF BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. EXPLANATION TO THIS SECTION CLEARLY STATES THAT FOR THE PURPOSE OF SUB - CLAUSE (VII) ANY BAD DEBT OR PA RT THEREOF WRITTEN OFF AS IRREVOCABLE IN THE ACCOUNTS OF THE ASSESSEE SHALL NOT INCLUDE ANY PROVISION FOR BAD AND DOUBTFUL DEBTS MADE IN THE ACCOUNTS OF THE ASSESSEE. THIS IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS MADE PROVISION FOR BAD AND DOUBTFUL DEB TS DURING THE IMPUGNED ASSESSMENT YEAR. THEREFORE, THE PROVISION CANNOT BE ALLOWED AS DEDUCTION U/S 36(1)(VII) AS BAD DEBTS HAS NOT BEEN WRITTEN OFF DURING THE YEAR. WE, THEREFORE, CONFIRM THE ORDER OF CIT(A) SUSTAINING THE DISALLOWANCE AS THERE IS NO IL LEGALITY OR INFIRMITY IN THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 0 9 /0 2 /2015 . S D / - (D.T.GARASIA) JUDICIAL MEMBER S D / - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 0 9 /02/ 201 5 *SSL* 3 ITA NO. 294/PNJ/2014 (A.Y : 2007 - 08) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER ,