NANAVATI SONS PVT LTD, MUMBAI V. ACIT(OSD) CIRCLE 2(2), MUMBAI

ITA 3781/MUM/2010

• Counselvise Citation: 378119914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: PANKAJ K JAIN
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AN D SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 3781/MUM./2010 (ASSESSMENT YEAR : 2006-07 ) NANAVATI SONS PVT. LTD. 6 TH FLOOR, NANAVATI MAHALAYA 18, HOMI MODY STREET, FORT MUMBAI 400 023 PAN AABCN0966E .. APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-2(2), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... RESPONDENT ASSESSEE BY : MR. PANKAJ K. JAIN REVENUE BY : MR. P.C. MAURYA DATE OF HEARING 16.8.2011 DATE OF ORDER 26.08.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE ASSESSEE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 5 TH FEBRUARY 2010, PASSED BY THE COMMISSIONER (APPEALS)-V, MUMBAI, FOR ASSESSMENT YEAR 2006-07. 2. GROUND NO.1 RAISED BY THE ASSESSEE IS ON THE ISSUE OF DISALLOWANCE OF ` 6,74,867 UNDER SECTION 14A OF THE INCOME TAX ACT, 1 961 (FOR SHORT THE NANAVATI SONS PVT. LTD. ITA NO.3781/M/2010 2 ACT ) AND GROUNDS NO.2, IS ON THE ISSUE OF DISALLOWANCE OF CLAIM OF ` 15,162, MADE UNDER SECTION 36(1)(VII) R/W SECTION 36(2) OF THE ACT. 3. WE HAVE HEARD LEARNED COUNSEL, MR.PANKAJ JAIN, APPE ARING ON BEHALF OF THE ASSESSEE AND LEARNED DEPARTMENTAL REPRESENTATIV E, MR. P.C. MOURA, APPEARING ON BEHALF OF THE REVENUE. ON A CAREFUL CO NSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAPERS ON RECORD, AS WELL AS THE CASE LAWS CITED BEFORE US, WE HOLD AS F OLLOWS:- 4. INSOFAR AS GROUNDS NO.1 IS CONCERNED, WE FIND THAT THE COMMISSIONER (APPEALS) FOLLOWED MUMBAI SPECIAL BENCH DECISION OF THE TRIBUNAL RENDERED IN ITO V/S DAGA CAPITAL MANAGEMENT P. LTD., (2008) 119 TTJ (MUM.) 289 (SB). THE HON'BLE JURISDICTIONAL HIGH COURT IN GODR EJ & BOYCE MFG. CO. LTD. V/S DCIT, (2010), 328 ITR 081 (BOM.), HAS PARTLY RE VERSED THE DECISION OF MUMBAI SPECIAL BENCH OF THE TRIBUNAL IN DAGA CAPITA L MANAGEMENT P. LTD. (SUPRA). UNDER THESE CIRCUMSTANCES, WE DEEM IT APPR OPRIATE TO RESTORE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR DEN OVO ADJUDICATION IN THE LIGHT OF THE PROPOSITIONS LAID DOWN BY THE HONBLE JURISD ICTIONAL HIGH COURT IN GODREJ & BOYCE MFG. CO. LTD. (SUPRA). CONSEQUENTLY, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 5. GROUNDS NO.2, WHICH IS A CLAIM FOR BAD DEBT, THE AS SESSEE CLAIMS THAT IT HAD WRITTEN-OFF SUNDRY CREDIT BALANCES, AS THERE WE RE NO MORE RECOVERABLE. 6. THE CASE OF THE ASSESSING OFFICER IS THAT, THE ASSE SSEE HAS NOT SATISFIED THE CONDITIONS OF SECTION 36(2). ON A QUERY FROM TH E BENCH, THE LEARNED COUNSEL SUBMITS THAT NO FURTHER EVIDENCE CAN BE ADV ANCED TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE THAT PROVISIONS OF SECTIO N 36(2) ARE SATISFIED. IT WAS SUBMITTED THAT THE VERY FACT THAT THESE ARE TRA DE DEBTORS DEMONSTRATE THAT THEY WERE ROUTED THROUGH PROFIT & LOSS ACCOUNT . UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THA T THE DISALLOWANCE HAS TO BE UPHELD FOR THE REASON THAT THE ASSESSEE FAILED T O FURNISH NECESSARY DETAILS EITHER BEFORE THE COMMISSIONER (APPEALS) OR BEFORE THE ASSESSING OFFICER TO NANAVATI SONS PVT. LTD. ITA NO.3781/M/2010 3 DEMONSTRATE THAT THE CONDITIONS, AS CONTAINED UNDER SECTION 36(2) WERE, IN FACT, FULFILLED. CONSEQUENTLY, WE UPHOLD THE ORDER OF THE COMMISSIONER (APPEALS) AND DISMISS THIS GROUND OF THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.8.2011 SD/- VIJAY PAL RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 26 TH AUGUST 2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, B BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI