Shri Manan S.Shah, Ahmedabad V. The Dy.CIT.,Circle-10, Ahmedabad

ITA 3251/AHD/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6422 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 04-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JANGID
• Assessee Lawyers: VIIJAY RANJAN
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI D.K.TYAGI, HONBLE JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, HONBLE ACCOUNTANT MEMBER ITA NO.3251/AHD/2009 ASSESSMENT YEAR:2006-07 DATE OF HEARING:25.5.11 DRAFTED:25.5.11 SHRI MANAN S SHAH, 95, MANEKBAUG SOCIETY, AMBAWADI, AHMEDABAD PAN NO.AIQPS6582H V/S . DCIT, CIRCLE-10, 1 ST FLOOR, NARAYAN CHAMBERS, ASHRAM ROAD, AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI VIIJAY RANJAN, AR RESPONDENT BY:- SHRI J.P. JANGID, SR DR O R D E R PER D.K.TYAGI, JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME- TAX(APPEALS)-XVI, AHMEDABAD IN APPEAL NO.CIT(A)XVI/ DCIT.10/ 0124/2008-09 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE DEPARTMENTAL AUTHORITIES HAVE ERRED IN REJECTING THE ASSESSEES CLAIM FOR DEDUCTION FOR BAD DEBTS IN A SUM OF RS.8,15,717/- 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF TEXTILE CAPITAL AND IT S SPARE PARTS. DURING THE YEAR UNDER APPEAL, ASSESSEE HAS WRITTEN OFF ACCOUNTS OF NINE P ARTIES OF SURAT AMOUNTING TO RS.8,15,717/- AS IRRECOVERABLE. THIS CLAIM OF BAD D EBT OF RS.8,15,717/- WAS DISALLOWED BY ASSESSING OFFICER ON THE GROUND THAT ASSESSEE HAS FAILED TO SHOW THAT DEBT HAD BECAME BAD AS ON 31-03-2006. THIS ACTION O F THE AO WAS CONFIRMED BY LD. ITA NO.3251/AHD/2009 A.Y. 2006-07 SH MANANA S SHAH V. DCIT CIR-10 ABD PAGE 2 CIT(APPEALS). AGGRIEVED BY THIS ORDER OF LOWER AUTH ORITIES, NOW ASSESSEE IS IN APPEAL BEFORE US. 4. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE RE NO DISPUTE THAT THE AMOUNT OF RS.8,15,717/- HAS BEEN WRITTEN OFF BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT AS HAD DEBT. THEREFORE THE ISSUE IS NOW COVERED BY THE DEC ISION OF HONBLE SUPREME COURT IN THE CASE OF T.R.F. LIMITED V. CIT (2010) 323 ITR 397 (SC), WHEREIN FOLLOWING WAS HELD:- AFTER THE AMENDMENT OF SECTION 36(1)(VII) OF THE I NCOME-TAX ACT, 1961, WITH EFFECT FROM APRIL 1, 1989, IN ORDER TO OBTAIN A DED UCTION IN RELATION TO BAD DEBTS, IT IS SNOT NECESSARY FOR THE ASSESSEE TO EST ABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECOVERABLE: IT IS ENOUGH IF THE BAD D EBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. IN VIEW OF THE ABOVE THE ADDITION MADE BY ASSESSING OFFICER AND SUSTAINED BY LD. CIT(A) IS HEREBY DELETED. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 25/05/2011 SD/- SD/- (D.C.AGRAWAL) (D.K. TYAGI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 25/05/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- XVI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD