DCIT, New Delhi V. M/s Samtel India Ltd., New Delhi

ITA 4038/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8059 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 03-03-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 05-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J P JANGID
• Keywords: Retrospective amendment; Bad and doubtful debts; Set aside
• Section: 115JB

Judgement Text

I.T.A. NO.4037 & 4038/DEL/09 1/3 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO.4037 & 4038 /DEL/2009 ASSESSMENT YEAR : 2005-06 & 06-07 DCIT, SAMTEL INDIA LTD., CIRCLE-7 (1), PLOT NO.7, 6 TH FLOOR, NEW DELHI. V. TDI CENTRE, JASOLA DISTT. COMPEX, SARITA VIHAR, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JP JANGID, SR. DR. RESPONDENT BY : SHRI SACHIT JOLLY, ADVOCATE. ORDER PER A.K. GARODIA, AM: BOTH THESE APPEALS ARE FILED BY THE REVENUE WHICH A RE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD CIT(A) X, NEW DELHI DATE D 9.7.2009 FOR ASSESSMENT YEAR 2006-07 AND DATED 10.7.2009 FOR ASSESSMENT YE AR 2005-06. SINCE IDENTICAL ISSUE IS INVOLVED IN BOTH THE YEARS, BOTH THESE APP EALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ONLY ONE GROUND HAS BEEN RAISED BY THE REVENUE IN BOTH THE YEARS WHICH ARE AS UNDER:- ASSESSMENT YEAR 2005-06: LD CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUM STANCES OF THE CASE, IN DIRECTING THE ASSESSING OFFICER FOR NOT MAKING ADJU STMENT OF . I.T.A. NO.4037 & 4038/DEL/09 2/3 RS.75,32,462/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF PROVISION FOR BAD & DOUBTFUL DEBTS AND ADVANCES WHILE COMPUTING B OOK PROFIT UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961. ASSESSMENT YEAR : 2006-07 LD CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUM STANCES OF THE CASE, IN DIRECTING THE ASSESSING OFFICER FOR NOT MAKING ADJU STMENT OF RS.11,39,000/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF PROVISION FOR BAD & DOUBTFUL DEBTS AND ADVANCES WHILE COMPUTING B OOK PROFIT UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT IN BOTH YEARS, THE ASSESSEE HAS DEBITED TO THE P&L A/C, A PROVISION FOR DOUBTFUL DEBTS TO THE EXTENT OF RS.75,31,462/- IN ASSESSMENT YEAR 2005-06 AND RS.11,39,000/- IN ASSE SSMENT YEAR 2006-07. WHILE COMPUTING THE BOOK PROFIT U/S 115 JB OF THE A CT, THE ASSESSING OFFICER HAS MADE ADDITION ON ACCOUNT OF THIS PROVISION OF DOUBT FUL DEBTS IN BOTH THE YEARS. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEALS IN BOTH YEARSBEFORE LD CIT(A) AND LD CIT(A) HAS DELETED THIS ADDITION B Y FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF HCL COMN ET SYSTEMS & SERVICES LTD. AS REPORTED IN 305 ITR 409 AND NOW THE REVENUE IS IN APPEAL BEFORE US. 4. IT IS SUBMITTED BY LD DR OF THE REVENUE THAT THI S ISSUE IS NOW COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE B Y RETROSPECTIVE AMENDMENT IN SECTION 115 JB OF THE ACT BY FINANCE (NO.2) ACT, 2009 WITH RETROSPECTIVE EFFECT FROM1.4.2001. IT IS POINTED OUT THAT AS PER THIS RE TROSPECTIVE AMENDMENT, CLAUSE (I) HAS BEEN ADDED TO EXPLANATION-1 TO SECTION 115 JB AS PER WHICH THE AMOUNT OR AMOUNTS SET ASIDE AS PROVISION FOR DIMINUTION IN THE VALUE OF ASSET HAS TO BE ADDED BACK FOR THE PURPOSES OF COMPUTING BOOK PROFI T U/S 115JB OF THE ACT. IT IS SUBMITTED THAT IN VIEW OF THIS RETROSPECTIVE AMENDM ENT, THE ORDER OF LD CIT(A) IN . I.T.A. NO.4037 & 4038/DEL/09 3/3 BOTH YEARS SHOULD BE REVERSED AND THAT OF THE ASSES SING OFFICER SHOULD BE RESTORED. 5. LD AR OF THE ASSESSEE FAIRLY AGREED WITH THIS CO NTENTION OF THE LD DR OF THE REVENUE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD AND WE FIND THAT AS PER THIS RE TROSPECTIVE AMENDMENT IN SECTION 115 JB OF THE ACT W.E.F. 1.4.2001, PROVISIO N FOR BAD DEBTS HAS TO BE ADDED BACK WHILE COMPUTING BOOK PROFIT U/S 115 JB O F THE ACT AND HENCE WE REVERSE THE ORDERS OF THE LD CIT(A) IN BOTH THE YEA RS AND RESTORE THAT OF THE ASSESSING OFFICER IN BOTH YEARS. THE GROUND RAISED BY THE REVENUE IN BOTH YEARS IS ALLOWED. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE ALLOWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING I.E. 3 RD MARCH, 2010. SD/- SD/- (GEORGE MATHAN) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 03.3.2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).