RALLIS INDIA LTD, MUMBAI V. DCIT - 1(3), MUMBAI

ITA 384/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3419 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 12-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 14-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 384/MUM/2011 (ASSESSMENT YEAR: 2005-06) M/S. RALLIS INDIA LTD. D C I T - 1 (3) C/O. KALYANIWALLA & MISTRY AAYAKAR BHAVAN, M.K. ROA D ARMY & NAVY BLDG., 3RD FLOOR VS. MUMBAI 400020 148, MAHATMA GANDHI ROAD FORT, MUMBAI 400001 PAN - AABCR2657N APPELLANT RESPONDENT APPELLANT BY: SHRI M.M. GOLVALA RESPONDENT BY: SHRI RAJARSHI DWIVEDY DATE OF HEARING: 12.06.2013 DATE OF PRONOUNCEMENT: 12.06.2013 O R D E R PER D. MANMOHAN, V.P. THIS IS AN APPEAL FILED AT THE INSTANCE OF THE ASSE SSEE AND IT PERTAINS TO A.Y. 2005-06. 2. THE FOLLOWING GROUNDS WERE URGED BEFORE US: 1. BOTH THE LOWER AUTHORITIES ERRED IN HOLDING THA T PURCHASE TAX OF RS.54,67,168/- IS TO BE ADDED TO THE VALUE OF THE C LOSING STOCK. THE APPELLANT SUBMITS THAT THE ADDITION IS UNJUSTIF IED AND IS REQUIRED TO BE DELETED. 2. IN ANY EVEN, THE ADDITION IS EXCESSIVE AND ARBIT RARY. 3. WITHOUT PREJUDICE TO WHAT IS STATED IN GROUND NO . 1 ABOVE, THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER WAS RE QUIRED TO MAKE ADJUSTMENTS TO THE OPENING STOCK AND PURCHASES ALSO. 4. BOTH THE LOWER AUTHORITIES ERRED IN DISALLOWING BAD DEBTS AMOUNTING TO RS.65,16,526/-. THE APPELLANT SUBMITS THAT THE DISALLOWANCE IS UNJUSTIFIED AND IS REQUIRED TO BE D ELETED. 3. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE PLACED BEFORE US A COPY OF THE ORDER OF THE ITAT D BENCH MUMBAI IN ASSESSEES OWN CASE FOR A.Y. 2004-05 TO SUBMIT THAT IN THE LIG HT OF THE VIEW TAKEN BY ITA NO. 384/MUM/2011 M/S. RALLIS INDIA LTD. 2 THE ITAT IN PARA 7 OF THE AFOREMENTIONED ORDER THE ISSUE URGED VIDE GROUND NO. 1, 2 & 3 STANDS COVERED AGAINST THE ASSESSEE AN D HENCE THE AFOREMENTIONED GROUNDS DESERVE TO BE REJECTED. 4. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE WE R EJECT GROUND NO. 1, 2 & 3 OF THE ASSESSEE. GROUNDS ARE DISMISSED. 5. GROUND NO. 5 IS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE AND ACCORDINGLY THE SAME IS REJECTED. GROUND IS DIS MISSED. 6. VIDE GROUND NO. 4 THE ASSESSEE CONTENDS THAT THE AO AS WELL AS THE CIT(A) WERE OF THE OPINION THAT MERE WRITE OFF OF B AD DEBT IS NOT SUFFICIENT TO CLAIM DEDUCTION UNDER SECTION 36(1)(VII) OF THE ACT . IN THEIR OPINION EVEN AFTER AMENDMENT TO SECTION 36(1)(VII) W.E.F. A.Y. 8 9-90 THE ONUS IS UPON THE ASSESSEE TO PROVE THAT THE DEBT HAS BECOME BAD. 7. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE RELI ED UPON THE DECISION OF THE APEX COURT IN THE CASE OF TRF LIMIT ED 323 ITR 397 TO SUBMIT THAT AFTER THE AMENDMENT THE ACT POSTULATES THAT IN ORDER TO PERMIT THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 36(1)(VII ) OF THE ACT MERE WRITE OFF IS SUFFICIENT AND IT IS NOT NECESSARY FOR THE ASSES SEE TO PROVE THAT IT HAS BECOME BAD. 8. ON THE OTHER HAND, THE LEARNED D.R. MERELY RELIED U PON THE ORDERS PASSED BY THE TAX AUTHORITIES. 9. HAVING REGARD TO THE DECISION OF THE APEX COURT WE ARE OF THE VIEW THAT `THE CLAIM OF THE ASSESSEE DESERVES TO BE ACCEPTED, SINCE IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS WRITTEN OFF THE IMPUGNED AMOU NT AS BAD DEBT IN ITS BOOKS OF ACCOUNT. WE DIRECT THE AO ACCORDINGLY. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE COMPANY IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JUNE, 2013. SD/- SD/- (D. KARUNAKARA RAO) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 12 TH JUNE, 2013 ITA NO. 384/MUM/2011 M/S. RALLIS INDIA LTD. 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 2, MUMBAI 4. THE CIT 1, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.