THE ACIT RG 7(2), MUMBAI V. M/S. RASHTRIYA CHEMICALS & FETILIZERS, MUMBAI

ITA 3757/MUM/2006

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49306 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-06-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 13-06-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K JALANI
• Assessee Lawyers: D SONGATE
• Keywords: Business income; Opportunity of being heard; Bad and doubtful debts; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI R.S.SYAL, AM AN D SHRI R.S.PADVEKAR, JM ITA NO.3757/MUM/2006 : ASST.YEAR 2002-2003 THE ASSTT.COMMISSIONER OF INCOME-TAX RANGE 7(2) MUMBAI. VS. M/S.RASHTRIYA CHEMICALS & FERTILIZERS LTD. PRIYADARSHNI, EASTERN EXPRESS HIGHWAY SION, MUMBAI 400 022. PAN : AAACR2831H. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.K.JALANI RESPONDENT BY : SHRI D.SONGATE O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 31.03.2006 IN RELATI ON TO THE ASSESSMENT YEAR 2002-2003. IT IS A RECALLE D MATTER INASMUCH AS THE EAR LIER ORDER PASSED BY THE TRIBUNAL HAS BEEN RECALLE D VIDE ITS ORDER DATED 30 TH NOVEMBER, 2010. 2. THE SOLITARY EFFECTIVE GROUND RAI SED IN THIS APPEAL IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DISA LLOWANCE OF RS.41,36,060/- BEING THE EXCESS PROVISION MADE ON ACC OUNT OF WRITE OFF OF ADVANCES AND DEPOSITS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSE E WROTE OFF EXCESS PROVISION FOR DOUBTFUL DEBTS WHICH WERE DI SALLOWED IN EARLIER YEARS. ON BEING CALLED UPON TO FURNISH THE DETAILS, THE ASSESSEE SUBMITTED UNIT-WISE DETAILS OF RECOVERY OF DEBTS, WHICH HAS BEEN REPRODU CED ON PAGE 3 OF THE ASSESSMENT ORDER. IT WAS ARGUED ON BEHALF OF THE ASSESSEE THAT THESE AMOUNTS WERE DOUBTFUL DEBTS RECOVERED DURING THE YEAR AG AINST THE PROVISION MADE AN D DISALLOWED IN EARLIER YEARS. THE ASSESSING OFFICER NOTED FROM ANNEXURE-IV TO THE COMPUTATION OF TOTAL INCOME THAT A FIGURE OF RS.1.43 CRORES WAS DETERMINED BY CONS IDERING THE OPENING BALANCE, PROVISIONS MADE DURING THE YEAR , CLOSING BALANCE AND DEBTS ETC. WRITTEN ITA NO.3757/MUM/2006 M/S.RASHTRIYA CHEMICALS & FERTILIZERS LIMITED. 2 BACK AGAINST THE RESPECTIVE PROVISIONS. AS IN HIS OPINION THE SU M OF RS.41.36 LAKHS WAS NOT OFFERED AS BUSINESS INCOME IN THE PRECEDING YEAR, TH IS AMOUNT WAS LIABLE TO BE DISALLOWED ON WRITING O FF OF THE ADVANCES AND DE POSITS DURING THE YEAR. HE, THEREFORE, MADE ADDITION OF RS.41.36 LAKHS, WHICH CAME TO BE DELETED IN THE FIRST APPEAL. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD IT IS NOTICED THAT THE LEARNED CI T(A) DELETED THE ADDI TION BY OBSERVING THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CA USE TO PLACE THE DOC UMENTS (APPENDIX-I) TO ITS SUBMISSIONS BEFORE THE ASSESSING OF FICER AND HENCE ITS C ASE WAS COVERED BY THE PROVISIONS OF RULE 46A OF THE INCOME-TAX RULES, 1962 AND THERE WAS NO ADDITIONAL GROUND AS REFERRED TO BY THE ASSESSING OFFICER IN HIS LETTER DATED 20.02.2006. THE LEARNED A.R. TRIED TO EXPL AIN THE FIGURES FROM ANNUAL ACCOUNTS AS WELL AS THE COMPUTATION OF IN COME BUT COULD NOT PROPERLY EXPLAIN THE DETAILS. SINCE THE LEARNED CIT(A) HAS DELETED THE ADDITI ON WITHOUT DISCUSSING THE ISSUE ON MERITS, IN OUR CONSIDERED OPINION, THE IMPUGNED ORDE R CANNOT BE SUSTAINED ON THIS ISSUE. IN OUR CONSIDERED OPINION, THE ENDS OF JUSTI CE WOULD MEET ADEQUATELY IF THE IMPUGNED ORDER ON THIS ASPECT IS SET ASIDE AND THE MA TTER IS RESTORED TO THE FILE OF A.O. FOR DECIDING IT AFRESH AS PER LAW AFTER ALLO WING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE, 2011. SD/- SD/- ( R.S.PADVEKAR ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 30 TH JUNE, 2011. DEVDAS*` ITA NO.3757/MUM/2006 M/S.RASHTRIYA CHEMICALS & FERTILIZERS LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - VII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.