EBEN TADE IMPEX (P) LTD, MUMBAI V. ASST CIT 8(1), MUMBAI

ITA 3669/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9319 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 23-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROOPAK KUMAR
• Keywords: Bad and doubtful debts

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI .. , BEFORE SHRI R.K.GUPTA, JM ./ ITA NO.3669/MUM/2012 ( ! ! ! ! '#! '#! '#! '#! / ASSESSMENT YEAR :2006-2007) M/S EBEN TADE IMPEX (P) LTD., 103, SAGAR MANSION, 40, BHULABHAI DESAI RD., MUMBAI-400 026. VS. ACIT-8(1), MUMBAI. $ % ./ &' ./ PAN/GIR NO. : AAACE 9741 R ( $( / APPELLANT ) .. ( )*$( / RESPONDENT ) !+, - -- - . . . . /ASSESSEE BY : MR. SUNIL NAHTA &' - -- - . . . . /REVENUE BY : MR. ROOPAK KUMAR ' - ,/% / DATE OF HEARING : 21 ST NOV., 2012 01# - ,/% / DATE OF PRONOUNCEMENT : 23 RD NOV.,2012 2 2 2 2 / O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 7-12- 2010 OF LEANED CIT(A)-16, MUMBAI RELATING TO THE AS SESSMENT YEAR 2006-07. 2. THE FIRST GROUND AGAINST PASSING THE EX-PARTE ORDER, WAS NOT PRESSED, THEREFORE, THE SAME IS DISMISSED AS NOT PR ESSED. 3. THE REMAINING ISSUE IS AGAINST CONFIRMING THE DISA LLOWANCE OF RS.1,76,88,344/-, BEING BAD DEBTS WRITTEN OFF, CLAI MED AS DEDUCTION UNDER SECTION 36(1)(VII) OF THE ACT. ITA NO.3669/2012 2 4 . THE LEARNED COUNSEL OF THE ASSESSEE, WHO APPEARED BEFORE THE TRIBUNAL, STATED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF T.R.F. LTD. VS. CIT, REPORTED IN [2010] 323 ITR 397 (SC) , COPY OF THE SAME HAS ALSO BEEN FILED. 5. ON THE OTHER HAND, LEARNED DR PLACED RELIANCE ON T HE ORDER OF THE CIT(A). 6 . AFTER CONSIDERING THE SUBMISSIONS AND PERUSING TH E MATERIAL ON RECORD, I NOTED THAT THE TOTAL INCOME OF THE ASSESS EE WAS ASSESSED AT RS.4,37,659/- AFTER DISALLOWING THE CLAIM OF BAD DE BTS OF RS.1,76,88,344/-. THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER BY OBSERVING THAT ON PERUSAL OF THE ASSESSEES SUB MISSION, IT IS SEEN THAT THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENC E IN RESPECT OF THE CLAIM OF THE WORTHLESSNESS OF THE BAD DEBTS. ALSO, THE ASSESSEE SIMPLY RELIED ON THE PROVISIONS OF LAW. APART FROM MAKING LEGAL SUBMISSION, THE ASSESSEE DID NOT FURNISH ANY EVIDENCE OF ANY TYPE I N SUPPORT F ITS CLAIM THAT BAD DEBTS WAS OFFERED TO TAX IN EARLIER YEARS, EFFORTS WERE MADE TO RECOVER IT AND MOST IMPORTANTLY, THAT IT WAS ACTUAL LY WRITTEN OFF IN THE BOOKS OF ACCOUNTS. WHILE HOLDING SO, THE ASSESSING OFFICER HAS ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS. CALCUTTA AGENCY LTD., REPORTED IN 19 ITR 191; IN THE CASE OF CIT VS. TRANSPORT CORPORATION OF INDIA LTD., REPORTED IN 25 6 ITR 701 AND ALSO IN THE CASE OF CIT VS. IMPERIAL CHEMICAL INDUSTRIES (I) P LTD., REPORTED IN 74 ITR 17 . RELIANCE HAS ALSO BEEN PLACED IN THE CASE OF SOUTH INDIA SURGICAL CO. LTD. VS. ACIT, REPORTED IN 201 CTR 289 AS ITA NO.3669/2012 3 WELL AS IN THE CASE OF AHMEDABAD ELECTRICITY CO. LTD., REPORTED IN 262 ITR 97 ON ACCOUNT OF BAD DEBT. ACCORDINGLY, THE CLAIM OF THE ASSESSEE WAS DISALLOWED BY THE ASSESSING OFFICER. 7 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A ), WHO ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 8 . AFTER CONSIDERING THE ORDER OF THE ASSESSING OFFI CER AS WELL AS THE ORDER OF THE CIT(A) AND THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF T.R.F. LTD. (SUPRA) , I AM OF THE VIEW THAT THE ISSUE SHOULD GO BACK TO THE FILE OF THE ASSESSING OFFICER. I NOTED THAT THOUGH THERE IS NO NEED TO PROVE THAT DEBT HAS BECOME BAD IN VIEW OF T HE LATEST DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF T.R.F. LTD. (SUPRA) , BUT OTHER CONDITIONS HAVE TO BE FULFILLED AS TO WHETHER THESE AMOUNTS HAVE BEEN OFFERED FOR TAX IN PAST OR THEY HAVE BEEN WRIT TEN OFF IN THE BOOKS OF ACCOUNTS OR NOT. THE ASSESSING OFFICER HAS CLEARLY MENTIONED IN HIS ORDER AT PAGE 4 THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE OF ANY TYPE IN SUPPORT OF ITS CLAIM THAT BAD DEBT HAS BEEN OFFERED TO TAX IN EARLIER YEARS AND MOST IMPORTANTLY THAT IT WAS ACTU ALLY WRITTEN OFF IN THE BOOKS OF ACCOUNTS. THESE CONDITIONS HAVE TO BE FULF ILLED AND THEREAFTER ONLY THE CLAIM OF BAD DEBTS CAN BE CONSIDERED FOR A LLOWING OR DISALLOWING. SINCE, BOTH THESE ASPECTS REMAINED UNA NSWERED, THEREFORE, TO MEET THE END OF JUSTICE, I RESTORE TH E MATTER TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE ISSUE AFRESH A ND ALSO CONSIDER THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF T.R.F. LTD. (SUPRA) , WHICH IS THE LATEST ONE ON THE ISSUE. THE ASSESSI NG OFFICER IS ITA NO.3669/2012 4 ALSO DIRECTED TO ALLOW SUFFICIENT OPPORTUNITIES TO PROVE THAT THE AMOUNTS OF BAD DEBTS CLAIMED, HAS BEEN OFFERED FOR TAXATION AND HAS BEEN ACTUALLY WRITTEN OFF IN THE YEAR IN WHICH THE CLAIM HAS BEEN MADE. IT IS A MATTER OF FACT THAT THE APPEAL BY THE CIT(A) WAS DE CIDED EX-PARTE , THEREFORE, THERE MAY BE SUFFICIENT REASON IN NOT FI LING THE DETAILS REGARDING FULFILLING THE CONDITIONS FOR CLAIMING BA D DEBTS. I ORDER ACCORDINGLY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. + ,3 !+, - 4- 567 2 '8, - &, 9: ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF NOV.2012. 2 - 01# % ; < 3 23RD NOV.,2012 1 - SD/- ( . . ) (R.K.GUPTA) / JUDICIAL MEMBER MUMBAI ; < DATED : 23 RD NOV./ 2012 . ). . /PKM , . / PS 2 2 2 2 - -- - ),= ),= ),= ),= >=#, >=#, >=#, >=#, / COPY OF THE ORDER FORWARDED TO : 1. $( / THE APPELLANT 2. )*$( / THE RESPONDENT. 3. ? ( ) / THE CIT(A)-X, MUMBAI. 4. ? / CIT 5. ='@ ), , , / DR, ITAT, MUMBAI 6. A! B / GUARD FILE. *=, ), //TRUE COPY// 2 2 2 2 / BY ORDER, 5 55 5 / 9 9 9 9 & & & & ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI