Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 9163 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 4 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-06-2016
Appeal Filed By
Assessee
Bench Allotted
D
Assessment Year
2006-2007
Appeal Filed On
09-02-2015
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.341/MDS/2015 / ASSESSMENT YEAR : 2006-07 M/S TOLL (INDIA) LOGISTICS (P) LTD NO.9A, PUZHAL AMBATTUR ROAD 1 ST STREET, PUZHAL CHENNAI 600 066 VS . THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE III(2) CHENNAI [PAN AAACS 8152 Q ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI SRIRAM SESHADRI, & SHRI ASHOK SHAH, CAS /RESPONDENT BY : DR. MILIND MADHUKAR BHUSARI, CIT / DATE OF HEARING : 24 - 05 - 2016 ! / DATE OF PRONOUNCEMENT : 09 - 0 6 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, CHEN NAI, DATED 22.10.2014 AND PERTAINS TO ASSESSMENT YEAR 2006-0 7. 2. SHRI SRIRAM SESHADRI, LD. REPRESENTATIVE FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE PURCHASED MACHINERIES AND USED THE SAME FOR THE PURPOSE OF BUSINESS. ACCORDING TO THE LD. REPRESENTATIVE, ITA NO. 341/15 :- 2 -: DUE TO FIRE ACCIDENT IN THE PREMISES OF THE ASSESS EE, MAJOR PORTION OF THE INVOICES WERE DESTROYED AND IT COULD NOT BE TRA CEABLE. THE ASSESSEE CLAIMED DEPRECIATION ON THE FIXED ASSETS W HICH WERE USED FOR THE PURPOSE OF BUSINESS. THE ASSESSING OFFICER DIS ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE COUL D NOT PRODUCE ALL THE INVOICES FOR THE PURCHASE OF MACHINERIES. ACCO RDING TO THE LD. REPRESENTATIVE, DUE TO FIRE ACCIDENT, MAJORITY OF T HE DOCUMENTS WERE DESTROYED, THEREFORE, THE ASSESSEE HAS PRODUCED BE FORE THE ASSESSING OFFICER PARTIAL DOCUMENTS WHICH WERE AVAILABLE WITH THE ASSESSEE. WHEN SIMILAR MATTER CAME UP BEFORE THIS TRIBUNAL IN ASSESSMENT YEAR 2007-08, THIS TRIBUNAL AFTER CONSIDERING THE FIRE A CCIDENT WHICH TOOK PLACE ON 15.7.2007, FOUND THAT THE ASSESSEE HAS PR ODUCED 78% OF THE VOUCHERS BEFORE THE ASSESSING OFFICER, THEREFORE, T HE ASSESSEE WAS ENTITLED FOR DEPRECIATION AS CLAIMED. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS FILED 90% OF THE RELEVANT VOUCHER S, THEREFORE, IN VIEW OF THE ORDER OF THIS TRIBUNAL FOR ASSESSMENT Y EAR 2007-08, THE ASSESSEE IS ENTITLED FOR DEPRECIATION FOR THE YEAR UNDER CONSIDERATION ALSO. 3. REFERRING TO THE CLAIM OF BAD DEBTS, THE LD. REPRES ENTATIVE SUBMITTED THAT THE ASSESSEE WRITTEN OFF BAD DEBTS TO THE EXTENT OF ` 7,28,40,820/-. HOWEVER, THE SAME WAS NOT CLAIMED I N THE RETURN OF INCOME. THE ASSESSEE CLAIMED THE SAME DURING THE COURSE OF ITA NO. 341/15 :- 3 -: ASSESSMENT PROCEEDINGS BY WAY OF A LETTER. THE ASS ESSING OFFICER BY PLACING RELIANCE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD VS CIT, 284 ITR 323, DISALLOWED THE CLAIM OF THE ASSESSEE. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) IN RESPECT OF THE BAD DEBTS CLAIMED. THE ASSESSEE HAS ALSO F ILED A APPLICATION U/S 264 OF THE ACT BEFORE THE CIT. THE CIT REJECT ED THE APPLICATION OF THE ASSESSEE FILED U/S 264 OF THE ACT ON THE GROU ND THAT THE ASSESSEE HAS ALREADY FILED APPEAL BEFORE THE CIT(A) . THE CIT(A) ALSO REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND T HAT THE ASSESSEE HAS FILED AN APPLICATION U/S 264 OF THE ACT BEFORE THE CIT. BOTH THE AUTHORITIES BELOW HAVE NOT ADJUDICATED THE ISSUE ON MERIT. THEREFORE, THE LD. REPRESENTATIVE SUBMITTED THAT THIS TRIBUNAL CAN ENTERTAIN ADDITIONAL GROUND. THE JUDGMENT OF THE APEX COURT IN GOETZE INDIA LTD (SUPRA) WILL NOT IMPINGE THE POWER OF THIS TRIB UNAL. THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSE SSING OFFICER FOR RECONSIDERATION. 4. ON THE CONTRARY, DR. MILIND MADHUKAR BHUSARI, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASS ESSEE HAS NOT FILED THE VOUCHERS FOR PURCHASE OF MACHINERIES. FO R THE PURPOSE OF CLAIMING DEPRECIATION, THE ASSESSEE HAS TO ESTABLI SH THAT THE ASSETS WERE IN FACT PURCHASED AND USED FOR BUSINESS OF THE ASSESSEE. SINCE THE ASSESSEE COULD NOT PRODUCE PROPER VOUCHERS TO SUBSTANTIATE THE ITA NO. 341/15 :- 4 -: PURCHASE OF MACHINERIES, THE CIT(A) HAS RIGHTLY CON FIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 5. REFERRING TO THE BAD DEBT, THE LD. DR SUBMITTED THA T THE ASSESSEE HAS NOT CLAIMED ANY BAD DEBT IN THE RETURN OF INCOME. THE ASSESSEE CLAIMED BAD DEBTS BY WAY OF A LETTER BEFO RE THE ASSESSING OFFICER, THEREFORE, IT WAS NOT CONSIDERED. THEREFO RE, THE CIT(A) HAS RIGHTLY FOUND THAT THE ASSESSEE CANNOT RAISE THIS ISSUE BY WAY OF A LETTER. MOREOVER, THE ASSESSEE HAS APPROACHED THE CIT U/S 264 OF THE ACT IN RESPECT OF THE BAD DEBTS. THEREFORE, TH E SAME ISSUE CANNOT BE RAISED BEFORE THE CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADM ITTEDLY, THE ASSESSEE COULD NOT PRODUCE THE RELEVANT VOUCHERS FO R SUBSTANTIATING THE PURCHASE OF MACHINERIES FOR WHICH DEPRECIATION WAS CLAIMED. THE FACT THAT THERE WAS A FIRE ACCIDENT WHICH TOOK PLAC E IN THE PREMISES OF THE ASSESSEE ON 15.7.2007 IS NOT IN DISPUTE. IN F ACT, THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08 ACC EPTED THE CLAIM OF THE ASSESSEE. THE ASSESSEE HAS FILED ONLY 78% OF THE BILLS FOR PURCHASE OF MACHINERIES FOR THE ASSESSMENT YEAR 200 7-08. THIS TRIBUNAL, AFTER CONSIDERING THE FACT OF FIRE ACCIDE NT FOUND THAT THE ASSESSEE IS ENTITLED FOR DEPRECIATION ON THE FIXED ASSETS. FOR THE YEAR ITA NO. 341/15 :- 5 -: UNDER CONSIDERATION, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS PRODUCED 90% OF THE VOUCHERS. IN VIEW OF THE FIRE ACCIDENT WHICH TOOK PLACE ON 15.7.2007, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE ASSESSEE IS REALLY HANDICAPPED IN PRODUCI NG THE NECESSARY VOUCHERS FOR CLAIMING DEPRECIATION. SINCE THE DOCU MENTS WERE DESTROYED BY FIRE, THE ASSESSEE CANNOT BE BLAMED. AS RIGHTLY OBSERVED BY THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2 007-08, THE REVENUE HAS NOT DISPUTED THE CORRESPONDING CASH OUT FLOW FOR PURCHASE OF ASSETS ON WHICH DEPRECIATION WAS CLAIMED. IN VI EW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ENTITLED FOR DEPRECIATION ON THE FIXED ASSETS. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO ALLOW DEPRECIATION AS CLAIMED BY THE ASSESSEE. 7. THE NEXT ISSUE IS WITH REGARD TO CLAIM OF BAD DEBTS . ADMITTEDLY, THE ASSESSEE HAS NOT CLAIMED BAD DEBTS IN THE RETURN OF INCOME. THE ASSESSING OFFICER DISALLOWED THE CLAI M OF THE ASSESSEE ON THE BASIS OF THE JUDGMENT OF THE APEX COURT IN T HE CASE OF GOETZE INDIA LTD.(SUPRA). WE HAVE CAREFULLY GONE THROUGH JUDGMENT OF THE APEX COURT IN THE CASE OF GOETZE INDIA LTD (SUPRA). THE APEX COURT IN CATEGORICAL TERMS OBSERVED THAT THE ISSUE IN THAT C ASE WAS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NOT IMPINGE ON THE POWER OF THE TRIBUNAL IN ADMITTING ADDITIONAL EVIDE NCE. THE POWER OF ITA NO. 341/15 :- 6 -: THIS TRIBUNAL IN ADMITTING ADDITIONAL GROUND IS ALS O CONSIDERED BY THE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO . LTD VS CIT, 229 ITR 383, AND FOUND THAT THE TRIBUNAL CAN ALWAYS ENT ERTAIN ADDITIONAL GROUND. SINCE THE BAD DEBTS WHICH ARE CLAIMED TO B E WRITTEN OFF IN THE BOOKS OF ACCOUNT IS AN ALLOWABLE CLAIM DURING THE C OURSE OF COMPUTING TAXABLE INCOME, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OF FICER. THE ASSESSEE HAS ALSO FILED AN APPLICATION BEFORE THE C IT U/S 264 OF THE ACT. THE CIT REJECTED THE APPLICATION OF THE ASSE SSEE ON THE GROUND THAT THE ASSESSEE HAS ALREADY FILED AN APPEAL BEFO RE THE CIT(A). WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SEC. 264 OF THE ACT. FOR THE PURPOSE OF AVAILING THE REMEDY U/S 264 OF THE A CT, THE ASSESSEE HAS TO WAIVE THE REMEDY PROVIDED BEFORE THE CIT(A). IN THIS CASE, ADMITTEDLY, THE ASSESSEE HAS NOT WAIVED THE REMEDY . IN FACT, AN APPEAL WAS FILED BEFORE THE CIT(A). THEREFORE, THE APPLICATION U/S 264 IS NOT MAINTAINABLE. THE CIT(A) ALSO HAS NOT ENTER TAINED THE APPEAL ON MERIT ON THE GROUND THAT THE ASSESSEE HAS ALREA DY APPROACHED THE CIT U/S 264. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT SINCE THE CIT REJECTED THE APPLICATION ON THE GROUND THAT THE ASSESSEE HAS ALREADY FILED AN APPEAL BEFORE THE CIT(A), HE OUGHT TO HAVE DISPOSED OF THE SAME ON MERIT. SINCE THE ASSESSING OFFICER OR CIT(A) HAS NOT CONSIDERED THE CLAIM OF BAD DEBTS, THIS TRIBUNAL I S OF THE CONSIDERED ITA NO. 341/15 :- 7 -: OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTH ORITIES ARE SET ASIDE AND THE CLAIM OF BAD DEBT IS REMITTED BACK TO THE F ILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER TH E ISSUE IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD AND THEREAFTER DEC IDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPOR TUNITY TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JUNE, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 9 TH JUNE, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF
