The DCIT, Circle-2, Surat V. Shri Kashyap R.Chokhawala(HUF), Surat

ITA 3041/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6323 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 08-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PATEL
• Assessee Lawyers: RASESH SHAH
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO.3041/AHD/2010 A. Y.: 2005-06 THE D. C. I. T., CIRCLE-2, ROOM NO.110, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS SHRI KASHYAP RAMESHCHANDRA CHOKHAWALA (HUF), DALIASHERI, NAVAPURA, SURAT PA NO. AACHJ 1910 R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI A. K. PATEL, DR RESPONDENT BY SHRI RASESH SHAH, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II , SURAT DATED 31 ST AUGUST,2010, FOR ASSESSMENT YEAR 2005-06 CHALLENGIN G THE ORDER OF THE LEARNED CIT(A) IN ALLOWING CLAIM OF BAD DEBTS. 2. THE LEARNED CIT(A) NOTED IN THE IMPUGNED ORDER T HAT THE ASSESSEE MADE CLAIM OF BAD DEBTS IN THE PROFIT & LO SS ACCOUNT. THE AO FOUND THAT THE ASSESSEE HAS CLAIMED BAD DEBTS OF RS.34,00,000/- AS AGAINST COMMISSION INCOME OF RS.44,31,818/-. THE ASSESSEE WAS ASKED TO JUSTIFY THE CLAIM OF BAD DEBTS. IT WAS SUB MITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FINANCE AND DISCOUNTING OF CHEQUES AND INSTRUMENTS UNDER THE NAME AND STYLE OF M/S. K. R. CORPORATION AND USED TO GET SUBSTANTIAL DISCOUNTING OF CHEQUES AND ITA NO.3041/AHD/2010 DCIT, CIR-2, SURAT VS SHRI KASHYAP RAMESHCHANDRA CH OKHAWALA (HUF) 2 DRAFTS FROM M/S. SURAJ CORPORATION AND DURING THE Y EAR THE SAID PARTY CAME INTO FINANCIAL DIFFICULTIES AND THE ASSESSEES CHEQUES WHICH HAD BEEN RECEIVED FROM SURAJ CORPORATION WERE RETURNED TO THE TUNE OF RS.97,00,000/- AND THEREFORE, THEY WERE NOT HONORE D. THE ASSESSEE CLAIMED BAD DEBTS OF RS.34,00,000/- IN THE YEAR UND ER CONSIDERATION AND THE BALANCE WAS CLAIMED AS BAD DEBTS IN THE ASS ESSMENT YEAR 2006-07 IN A SUM OF RS.63,00,000/-. IT WAS, THEREFO RE, SUBMITTED THAT THE ISSUE IS SIMILAR WHICH IS CONSIDERED IN THE ASS ESSMENT YEAR 2006- 07. HE REPRODUCED THE FINDING OF THE LEARNED CIT(A) IN ASSESSMENT YEAR 2006-07 AND CONFIRMED THE DISALLOWANCE. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT ADDITION HAS BEEN DE LETED IN THE YEAR 2006-07. THE ORDER OF THE TRIBUNAL IN ITA NO.2800/A HD/2009 DATED 30-04-2010 WAS FILED BEFORE THE LEARNED CIT(A) TO S HOW THAT THE TRIBUNAL HELD THAT IT WAS REVENUE LOSS AND THE ISSU E IS IDENTICAL AS IS CONSIDERED IN THIS YEAR ALSO. THE LEARNED CIT(A) FO UND THAT THE ISSUE IS SAME AS IS CONSIDERED BY THE TRIBUNAL IN ASSESSM ENT YEAR 2006-07 AND ACCORDINGLY DELETED THE ADDITION AND ALLOWED TH E APPEAL OF THE ASSESSEE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2006-07. COPY O F THE ORDER IS PLACED ON RECORD. THE LEARNED DR DID NOT DISPUTE TH E ORDER OF THE TRIBUNAL BUT SUBMITTED THAT THE DEPARTMENT DID NOT ACCEPT THE ORDER OF THE TRIBUNAL AND APPEAL IS PENDING IN THE HIGH COUR T. ITA NO.3041/AHD/2010 DCIT, CIR-2, SURAT VS SHRI KASHYAP RAMESHCHANDRA CH OKHAWALA (HUF) 3 4. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE OF T HE VIEW THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE O RDER OF THE TRIBUNAL DATED 30-04-2010 (SUPRA) IN WHICH IT WAS HELD THAT THE ABOVE BAD DEBT IS A REVENUE LOSS AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE WAS ALLOWED. PART CLAIM WAS MADE IN THE ASSESSMENT YEAR UNDER APPEAL AND PART CLAIM WAS MADE ON THE SAME FACTS IN SUBSEQUENT ASSESSMENT YEAR 2006-07. THEREFORE, FOLLOWING THE O RDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2006-07, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN DELETING THE ADD ITION. WE CONFIRM THE ORDER OF THE LEARNED CIT(A) AND DISMISS THE APP EAL OF THE REVENUE. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 24-06-2011 SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 24-06-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD