M/S Riddhi Siddhi Starch & Chemicals Ltd, Ahmedabad V. The Jtcit Sr-7, Ahmedabad

ITA 404/AHD/2002

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1776 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-11-2008
• Assessment Year: 1997-1998
• Appeal Filed On: 25-02-2002
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B S GEHLOT
• Assessee Lawyers: T P HEMANI; S N SOPARKAR
• Keywords: Bad and doubtful debts
• Section: 234B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, AHMEDABAD B BENCH BEFORE T.K.SHARMA, JUDICIAL MEMBER AND SHRI A.N.PAHUJA ACCOUNTANT MEMBER ITA NO.404, 1648, 4654/AHD/2002 AND ITA NO.3726/AHD /2003 ASSESSMENT YEAR : 1997-98, 1998-99, 1999-2000 AND 2 000-01 M/S.RIDDHI SIDDHI GLUCO BOILS LTD. 57, HIRABHAI MARKET, AHMEDABAD. JCIT, SPECIAL RANGE-7, AHMEDABAD. (APPELLANT) VERSUS (RESPONDENT) ITA NO.440, 2252, 2751/AHD/2002 AND ITA NO.3722/AHD /2003 ASSESSMENT YEAR : 1997-98, 1998-99, 1999-2000 AND 2 000-01 JCIT, SPECIAL RANGE-7, AHMEDABAD. M/S.RIDDHI SIDDHI GLUCO BOILS LTD. 57, HIRABHAI MARKET, AHMEDABAD. (APPELLANT) VERSUS (RESPONDENT) ASSESSEE BY : S.N.SOPARKAR, AND T.P.HEMANI REVENUE BY : B.S.GEHLOT CIT (DR) ORDER UNDER SECTION 255(4) OF THE I.T.ACT, 1961 PER BENCH: CONSEQUENT UPON DIFFERENCE OPINION BETWEEN THE MEMB ER CONSTITUTING B WHICH HEARD ALL THESE APPEALS, HON 'BLE PRESIDENT, NOMINATED ZONAL VICE PRESIDENT AS THIRD MEMBER TO RESOLVE THE CONTROVERSY INVOLVED IN THIS APPEAL. WHILE NOMINATING, HON'BLE PRESIDENT AL SO OBSERVED THAT THIRD MEMBER MAY SHORT LIST THE RELEVANT QUESTION/POINT O F DIFFERENCE. AS THIRD MEMBER HON'BLE VICE PRESIDENT SHRI O.K.NARAYANAN ON GOING THROUGH THE ORDERS CONCERNED AND AFTER HEARING BOTH THE SIDES, REFRAMED/SHORT LISTED TWO POINTS OF DIFFERENCE AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, INTEREST UNDER SECTION 234B AND 234C OF THE INCOME TAX ACT, 1961 IS LEVIABLE WHILE DETERMINING INCOME IN TERMS OF PROVI SIONS OF SECTION 2 115JA OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMEN T YEARS 1997-1998 AND 2000-2001? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE DEDUCTION FOR PROVISION FOR BAD DEBTS OF RS.15,84,669/- IS PE RMISSIBLE IN THE ASSESSMENT YEAR 1999-2000? 2. IN RESPECT OF QUESTION NO.1, HON'BLE VICE PRESID ENT AS THIRD MEMBER CONCURRING WITH THE VIEW OF ACCOUNTANT MEMBER, HELD THAT INTEREST UNDER SECTION 234B AND 234C OF THE INCOME TAX ACT, 1961 I S LEVIABLE, WHILE COMPUTING THE INCOME IN TERMS OF PROVISIONS OF SECT ION 115JA FOR THE ASSESSMENT YEAR 1997-98 AND 2000-2001. AS PER MAJOR ITY VIEW, WHILE COMPUTING INCOME UNDER SECTION 115JA OF THE INCOME TAX ACT, 1961, THE LEVY OF INTEREST BY ASSESSING OFFICER UNDER SECTION 234B AND 234C IS RESTORED. CONSEQUENTLY, GROUND NO.VIII & IX IN THE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 1997-98, GROUND NO.1(VII) IN THE AP PEAL OF THE REVENUE FOR THE AY 1998-99 AND GROUND NO.7 & 8 IN THE APPEAL OF THE REVENUE FOR THE AY 1999-2000 ARE ALLOWED WHILE GROUND NO.7 IN THE APPE AL OF THE ASSESSEE FOR THE AY 2000-01 IS DISMISSED. 3. IN RESPECT OF THE QUESTION NO.2, THOUGH, THE LEA RNED DEPARTMENTAL REPRESENTATIVE OBJECTED TO THE FINDINGS OF HON'BLE VICE PRESIDENT AS THIRD MEMBER VIS--VIS QUESTION FRAMED BY HIM, BEING RELE VANT FOR THE ASSESSMENT YEAR 1999-2000, THE SAID OBJECTION CANT BE CONSIDE RED AT THIS STAGE, WHEN MAJORITY VIEW IS BEING PRONOUNCED. THE HON'BLE VICE PRESIDENT CONCURRED WITH A VIEW EXPRESSED BY BOTH THE MEMBER THAT DEDUCTION FOR PROVISIONS OF BAD DEBTS OF RS.15,84,669/- IS NOT PERMISSIBLE IN THE A SSESSMENT YEAR 1999-2000. HOWEVER, AGREEING WITH JUDICIAL MEMBER WITH REGARD TO REMANDING THIS MATTER, HON'BLE VICE PRESIDENT (AS THIRD MEMBER), HELD THAT ONCE THE DEBT ARE WRITTEN OFF IN THE BOOKS OF ACCOUNT, ASSESSING OFFICER WILL ALLOW THE DEDUCTION OF BAD DEBTS IN THE YEAR IN WHICH ALL THE BAD DEBTS ARE AC TUALLY WRITTEN OFF IN RESPECT OF WHICH PROVISIONS OF RS.15,84,669/- IS DISALLOWED IN THE ASSESSMENT YEAR 1999-2000. CONSEQUENTLY, IT IS HELD THAT PROVISION FOR BAD DEBTS AMOUNTING TO RS.15,84,669/- IS RIGHTLY DISALLOWED BY THE ASSESSI NG OFFICER. HOWEVER, AS PER 3 MAJORITY VIEW, ASSESSING OFFICER IS DIRECTED TO ALL OW THE AMOUNT OF BAD DEBT REFLECTED IN THE PROVISION OF RS.15,84,669/- IN TH E SUBSEQUENT ASSESSMENT YEAR, WHEN THE CLAIM HAS BEEN MADE BY THE ASSESSEE AFTER WRITING OFF THE BAD DEBTS IN THE BOOKS OF ACCOUNTS AS IRRECOVERABLE. TH E ASSESSING OFFICER IS DIRECTED TO ALLOW BAD DEBTS IN SUBSEQUENT YEARS WHE N THE BAD DEBTS ARE ACTUALLY WRITTEN OFF IN THE BOOKS OF ACCOUNTS. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 3. THERE WAS NO DIFFERENCE BETWEEN ACCOUNTANT MEMBE R AND JUDICIAL MEMBER IN RESPECT OF OTHER GROUNDS/APPEAL FOR ALL T HE ASSESSMENT YEARS. IN PARAGRAPH 87, OF THE PROPOSED ORDER OF JUDICIAL MEM BER, THERE IS A TYPOGRAPHICAL ERROR. IN THAT PARAGRAPH, REFERENCE T O PARAGRAPH 79, WILL BE READ AS PARAGRAPH 77. IN THE RESULT, FOR THE STATISTICAL PURPOSES, ALL THE APPEALS OF THE REVENUE AND ASSESSEE FOR ARE TREATED AS PARTLY ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DATED 18 TH DECEMBER, 2009. SD/- SD/- (A.N.PAHUJA) (T .K. SHARMA) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED: 18/12/2009 PARAS# COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT, 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD.