SMITH & SHARKS PROJECTS INDIA PVT. LTD., MUMBAI V. ITO 9(3)2, MUMBAI

ITA 300/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71637 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 15-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 12-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts
• Section: 40A(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BE NCH, MUMBAI .. , . ... , BEFORE SHRI P.M. JAGTAP, AM AND DR S.T.M.PAVALAN , JM ITA NO.300 /MUM/2011 ( / ASSESSMENT YEAR : 2007-08) SMITH & SHARKS PROJECTS PVT.LTD. 1/201, SONAL LINK HEAVY INDL. ESTATE, LINK RD. MALAD(W). MUMBAI 400064 / VS. ITO 9(3)2 MUMBAI ! ' . / PAN : AABCS6733L (APPLICANT) .. RESPONDENT ) ASSESSEE B Y : SHRI G.DAYAL DEPARTMENT B Y : SHRI PITAMBAR DAS (DR) # $ % / DATE OF HEARING : 15-10-2013 &'() $ % / DATE OF PRONOUNCEMENT : 31 -10 -2013 *+ / O R D E R PER P.M. JAGTAP, A.M . : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LEARNED CIT(A) 20. MUMBAI DATED 16.11.2010 WHEREBY HE UPHEL D THE ORDER PASSED BY THE AO U/S. 154 REJECTING THE RECTIFICATION APPLICATION FILED BY THE ASSESSEE ON THE ISSUE OF BAD DEBTS. 2. IN THIS CASE, THE ASSESSMENT WAS COMPLETED BY TH E AO VIDE ORDER DATED 23.10.2009 MAKING ADDITION OF RS.14,82,000 BY WAY O F DISALLOWANCE OF ASSESSEES CLAIM FOR DEDUCTION ON ACCOUNT OF BAD DE BTS. THEREAFTER, THE ASSESSEE MOVED AN APPLICATION U/S. 154 SEEKING RECTIFICATIO N OF THE SAID ORDER ON THE ISSUE OF BAD DEBTS. THE ASSESSING OFFICER, HOWEVER, REJEC TED THE SAID APPLICATION SEEKING RECTIFICATION ON THE ISSUE OF BAD DEBTS AFT ER HAVING FOUND THAT THE ASSESSEE ITA NO.300/M UM/2011 SMITH & SHARKS PROJECTS 2 HAD NOT WRITTEN OFF THE CONCERNED DEBTS CLAIMED TO BE BAD AS IRRECOVERABLE IN ITS BOOKS OF ACCOUNT. ON APPEAL, THE LEARNED CIT(A) UPH ELD THE ORDER PASSED BY THE AO U/S. 154 REJECTING THE RECTIFICATION SOUGHT BY T HE ASSESSEE ON THE ISSUE OF BAD DEBTS HOLDING THAT THE RELEVANT FACT SHOWING THAT T HE BAD DEBTS WERE ACTUALLY WRITTEN OFF BY THE ASSESSEE AS IRRECOVERABLE IN ITS BOOKS OF ACCOUNT BEING NOT AVAILABLE ON THE RECORD, THE ISSUE OF BAD DEBTS REQ UIRED INVESTIGATION INTO NEW FACTS WHICH WAS BEYOND THE SCOPE OF SECTION 154. AG GRIEVED BY THE ORDER OF THE LEARNED CIT(A) THE ASSESSEE HAS RAISED THIS ISSUE I N THE PRESENT APPEAL FILED BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. AS FOUND BY THE AO AS WELL AS BY THE LEARNED CIT(A), THERE WAS NOTHING BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE RELEVANT DEBTS CLAIMED AS BAD WERE ACTUALLY WRITTEN OFF IN ITS BOOKS OF ACCOUNT AS REQUIRED TO CLAIM THE DEDUCTION OF ACCOUNT OF BAD D EBTS U/S. 36(1)(VII) AND LEARNED COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO REPUT E OR CONTROVERT THIS FINDING OF FACT RECORDED BY THE AUTHORITIES BELOW. MOREOVER, A S RIGHTLY HELD BY THE LEARNED CIT(A), ADJUDICATION OF THIS ISSUE REQUIRED INVESTI GATION INTO NEW FACTS WHICH WERE NOT AVAILABLE ON RECORD AT THE TIME OF ASSESSM ENT WHICH IS BEYOND THE SCOPE OF RECTIFICATION U/S. 154. THERE WAS THUS NO MERIT IN THE RECTIFICATION APPLICATION FILED BY THE ASSESSEE U/S. 154 ON THE ISSUE OF BAD DEBTS AND THE SAME, IN OUR OPINION, WAS RIGHTLY REJECTED BY THE AO. IN THAT VI EW OF THE MATTER, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT(A) HOLDI NG THE ORDER PASSED BY THE AO U/S. 154 REJECTING THE APPLICATION FILED BY THE ASSESSEE SEEKING RECTIFICATION ON THE ISSUE OF BAD DEBTS. THE SAME IS THEREFORE UPHEL D DISMISSING THE APPEAL OF THE ASSESSEE ON THIS ISSUE. 4. THE OTHER ISSUE RAISED BY THE ASSESSEE IN THIS A PPEAL RELATING TO DISALLOWANCE OF RS.42,354/- MADE U/S. 40A(3) OF TH E INCOME TAX ACT 1961 IS NOT ITA NO.300/M UM/2011 SMITH & SHARKS PROJECTS 3 PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US. THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. 5. IN THE RESULT, THE APPEAL BY THE ASSESS EE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2013 . *+ $ &'() # , - '. 31.10.2013 ' $ SD/- SD/- (S.T.M.PAVALAN) ( P.M. JAGTAP ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER # '9 MUMBAI ; - ' DATED .../ A.K.PATEL , PS 31.10.2013 ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. : !; / THE APPELLANT 2. <=!; / THE RESPONDENT. 3. *% * # > (:) / THE CIT(A)- MUMBAI CONCERNED 4. *% * # > / CIT MUMBAI CONCERNED 5. AB < CD , *% : :CD%) , # '9 / DR, ITAT, MUMBAI D BENCH 6. E F / GUARD FILE. ! ( / BY ORDER, = A < //TRUE COPY// )/(* + ( DY./ASSTT. REGISTRAR) , # '9 / ITAT, MUMBAI