ASTT.COMMISSIONER OF INCOME TAX, CIR.7, Nagpur V. M/S UNITECH POWER TRANSMISSION PVT. LTD, Nagpur

ITA 407/NAG/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3239 (ITAT-NAGPUR)
• Duration Of Justice: 4 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 27-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 26-08-2014
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: K P DEVANI
• Keywords: Business income; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.407/NAG./2014 (ASSESSMENT YEAR : 200607 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE7, MECL BUILDING SEMINARY HILLS, NAGPUR 440 006 . APPELLANT V/S UNITECH POWER TRANSMISSION PVT. LTD. A33, MIDC, BUTIBORI, NAGPUR PAN AAACH4430Q . RESPONDENT REVENUE BY : SHRI A.R. NINAWE ASSESSEE BY : SHRI K.P. DEVANI DATE OF HEARING 29.03.2017 DATE OF ORDER 31.03 .2017 O R D E R PER SHAMIM YAHYA, A.M. THE PRESENT APPEAL PREFERRED BY THE REVENUE IS DIRE CTED AGAINST IMPUGNED ORDER DATED 16 TH JUNE, 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)II, NAGPUR, FOR ASSESSMENT Y EAR 200607. 2. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED BE LOW: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F CASE, THE CIT(A) WAS CORRECT IN DIRECTING TO DELETE THE DISAL LOWANCE OF BAD DEBTS WITHOUT APPRECIATING THE FACT THAT THE AMOUNT CLAIMED WERE NOT RECOGNIZED AS DEBTS BY THE PARTY AND HENCE CANN OT BE COVERED BY PROVISIONS UNDER SECTION 36(1)(VII) OF T HE ACT. 3. BRIEF FACTS ARE, THE ASSESSEE A PRIVATE LIMITED COMP ANY IS 2 UNITECH POWER TRANSMISSION PVT. LTD. ENGAGED IN THE BUSINESS OF CONSTRUCTION AND ERECTIO N OF TOWERS ON CONTRACTUAL BASIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD CLAIM ED DEDUCTION OF ` 5,51,00,899 ON ACCOUNT OF BAD DEBTS WRITTENOFF UND ER SECTION 36(1)(VII). THE ASSESSING OFFICER EXAMINED THE CLAI M OF THE ASSESSEE AND CAME TO THE CONCLUSION THAT THERE WAS AN ABSENC E OF RELATIONSHIP OF DEBTOR AND CREDITOR BETWEEN THE ASSESSEE AND THE OTHER PARTIES. HE NOTED THAT A DEBT IS THE SUM WHICH ONE IS BOUND TO PAY TO ANOTHER BY CERTAIN AND EXPRESS AGREEMENT WHEREIN THE CREDITORS HAVE RIGHT TO RECEIVE AND ENFORCE PAYMENT AND THAT IN THE CASE OF THE ASSESSEE, IT DOES NOT HAVE ANY OF THESE ATTRIBUTES AND THAT, THE REFORE, THERE WAS NEVER ANY PROPER DEBT. THE ASSESSING OFFICER NOTED THAT A BAD DEBT PRESUPPOSES THE EXISTENCE OF A DEBT AND RELATIONSHI P OF CREDITOR AND DEBTOR AND THE MERE FACT THAT THE ASSESSEE LOST SOM E MONEY ON WHICH HE HAS BEEN TAXED IN THE PAST IS NOT SUFFICIENT TO JUSTIFY THE CLAIM OF DEDUCTION UNDER THIS SECTION. THE ASSESSING OFFICER ANALYZED THE VARIOUS AGREEMENTS ENTERED INTO BY THE APPELLANT WI TH THE PARTIES AND CAME TO THE CONCLUSION THAT THERE WAS NO OBLIGATION ON OTHER PARTIES TO COMPENSATE THE APPELLANT AND IT WAS FOR THE ASSESSE E TO BEAR COSTS IN CASE OF INCREASE IN WEIGHT, EXCAVATION VOLUMES, ETC ., AND THERE WAS NO RIGHT VESTED IN THE ASSESSEE TO DEMAND EXTRA COMPEN SATION UNDER THESE CIRCUMSTANCES AND HENCE THE DEBIT NOTES RAISE D BY THE ASSESSEE 3 UNITECH POWER TRANSMISSION PVT. LTD. DID NOT POSSESS STRENGTH TO MAKE OTHER PARTIES DEBT ORS. THE ASSESSING OFFICER NOTED THAT THE CLAIMS WERE MADE BY THE ASSE SSEE ON ACCOUNT OF VARIOUS REASONS LIKE INCREASE IN EXCAVATION / CONCR ETING VOLUME, INCREASE IN WEIGHT SUPPLIED, INCREASE IN CONSTRUCTI ON VOLUME ETC. HE NOTED THAT AS PER THE WEIGHT SUPPLIED, INCREASE IN CONSTRUCTION VOLUME ETC. HE NOTED THAT AS PER THE WRITTEN CONTRACT BETW EEN THE ASSESSEE AND OTHER PARTIES THE AMOUNT WHICH THE ASSESSEE WAS ENTITLED TO RECEIVE WAS CLEARLY SPECIFIED AND THE CONTRACTS HAD A SPECIFIC CLAUSE THAT IF THE WEIGHT OF THE TOWERS ERECTED BY THE APP ELLANT IS MORE THAN THE TENDERED CEILING WEIGHT, NO EXTRA AMOUNT WILL B E PAYABLE TO THE ASSESSEE AND IF IT BECOME NECESSARY TO ERECT HEAVIE R TOWERS, IT WAS THE RESPONSIBILITY OF THE ASSESSEE TO PROVIDE SUCH EXTR A WEIGHTS FREE OF ALL COSTS. TAKING INTO CONSIDERATION THE ABOVE FACTS AN D BASING HIMSELF ON THE CASE OF KOLKATA BENCH OF ITAT IN THE CASE OF DOT VS. ASSOCIATED ALCOHOLS & BREWERIES LTD. 80 TTJ 837 AND CIT VS. NAD IAD ELECTRIC SUPPLY CO LTD (1971) 80 ITR 650 (BOM.) HE ADDED THE SAID AMOUNT OF ` 5,51,00,900 TO THE INCOME OF THE ASSESSEE. AGGRIEV ED, ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. UPON ASSESSEES APPEAL, THE LEARNED COMMISSIONER (AP PEALS) ELABORATELY CONSIDERED THE ISSUE. HE GAVE A FINDING THAT THE DEBTS EMERGED OUT OF REGULAR BUSINESS TRANSACTION. THE LE ARNED COMMISSIONER (APPEALS) ALSO OBTAINED REMAND REPORT. FROM THE 4 UNITECH POWER TRANSMISSION PVT. LTD. REMAND REPORT, THE LEARNED COMMISSIONER (APPEALS) F OUND THAT ONLY A SUM OF ` 17,06,800 AND ` 81,750 REMAINED TO BE PROPERLY JUSTIFIED. THE LEARNED COMMISSIONER (APPEALS) SUSTAINED DISALL OWANCE TO THIS EXTENT ALSO. THE ADJUDICATION BY LEARNED COMMISSION ER (APPEALS) IS AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND THE WRITTEN SUBMISSIONS OF THE APPELLANT. THE MAIN BASI S FOR MAKING THE SAID DISALLOWANCE OF BAD DEBTS BY THE LD. AO IS THAT THERE IS AN ABSENCE OF ANY DEBT AND THAT THERE IS ALSO ABSEN CE OF RELATIONSHIP OF DEBTORS AND CREDITORS BETWEEN THE A PPELLANT AND OTHER PARTIES AS THE APPELLANT NEVER HAD ANY RIGHT TO RECEIVE AND ENFORCE PAYMENT FROM OTHER PARTIES.. AFTER CONSIDER ING THE SUBMISSION OF THE APPELLANT AND VARIOUS EVIDENCES F URNISHED DURING THE ASSESSMENT AND APPELLATE PROCEEDINGS, IT CAN BE CONCLUDED THAT THE LD. AO HAS ERRED IN COMING TO TH E SAID CONCLUSION. 5.1 IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAS HAD REGULAR BUSINESS TRANSACTIONS WITH THESE PARTIES. NONE OF P ARTIES IS UNKNOWN TO APPELLANT. THERE ARE BUSINESS TRANSACTIO NS WITH ALL PARTIES. IT IS ALSO A FACT THAT THERE ARE CONTRACTS /AGREEMENTS WITH ALL THESE PARTIES. VARIOUS BILLS HAVE BEEN RAISED B Y THE APPELLANT ON THESE PARTIES, WHICH HAVE BEEN DULY ACCEPTED BY THESE PARTIES. ALSO, IT IS NOT THAT THE ENTIRE AMOUNT OF TRANSACTI ON WITH ANY PARTY IS NOT ACCEPTED BY PARTY. IT IS ONLY PART OF TRANSA CTION THAT ARE IN DISPUTE AND EITHER THEY HAVE DEDUCTED FROM PAYMENT OR HAVE REFUSED TO PAY FOR DEBIT NOTES HOWEVER, IN BOTH CIR CUMSTANCES THE TRANSACTIONS ARE AS PER CONTRACT ONLY. IT IS IMPORT ANT TO NOTE THAT THE DEDUCTION OR REJECTION IS PART AND PARCEL OF AN Y CONTRACT. IN THE CASE OF THE APPELLANT THE DEDUCTION/REJECTION B Y PARTY IS ABOUT 8% TO 10% AND HENCE THERE IS MERIT IN THE CONTENTION OF THE APPELLANT THAT IN SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT THERE WAS A PROPER CREDITOR/DEBTOR RELATIONSHIP AND THERE WAS PROPER DEBT FOR 90% OF TRANSACTION AND THAT THERE WAS NO S UCH CREDITOR/DEBTOR RELATIONSHIP OR PROPER DEBT FOR BAL ANCE AMOUNT. 5.2 I HAVE ALSO PERUSED THE VARIOUS CONTRACTS ENTE RED INTO BY THE APPELLANT WITH THE VARIOUS PARTIES IN RESPECT OF WH ICH THE WRITE OFF HAS BEEN MADE. THE MAJOR AMOUNT OF WRITE OFF IS WIT H REGARD TO IVO POWER ENGINEERING LTD. IN RESPECT OF WHICH THE MAIN CONTRACT WAS EXECUTED ON 11.6.1998 WHICH WAS SUBJECT TO REPE ATED 5 UNITECH POWER TRANSMISSION PVT. LTD. CORRESPONDENCE AND WAS FOLLOWED BY A MEMORANDUM DAT ED 12- 04-1999 IN WHICH IT WAS CONFIRMED BY IVO POWER ENGI NEERING LTD. THAT THEY SHALL COMPENSATE FOR THE ADDITIONAL MATER IAL USED AND ADDITIONAL WORK DONE. AS A MATTER OF FACT, VARIOUS SUCH AGREEMENTS WERE BROUGHT TO THE SPECIFIC KNOWLEDGE O F THE LD. AO BY THE APPELLANT VIDE HIS LETTER DATED 23-12-2008 ( PAGE 14 OF THE APPELLANT'S PAPER BOOK). IT WAS EXPLAINED TO THE ID . AO THAT THE MAJOR AMOUNT OF BAD DEBTS PERTAINING TO IVO POWER E NGINEERING LTD., RS.4.35 CRS. IS SUPPORTED BY A MEMORANDUM BET WEEN HYUNDAI UNITECH AND IVO POWER ENGINEERING LTD., DAT ED 12.04.1999 IN WHICH IT WAS CLEARLY AGREED THAT IVO WILL COMPENSATE FOR THE INCREASE OF TOWER WEIGHTS AND AD DITIONAL WORK DUE TO ANTENNA LOADING. IT IS ALSO A FACT THAT THE CONTENTS AND THE ASSERTIONS MADE IN THE SAID LETTER HAVE NOT BEEN CO NSIDERED BY THE LD. AO AS THERE IS NO MENTION THEREOF IN THE AS SESSMENT ORDER. 5.3 IN THE SAID LETTER IT IS STATED THAT TO COMPENS ATE THE APPELLANT, 'PRICE VARIATION CLAUSE' OF THE CONTRACT CONTAINS T HE FORMULA FOR CALCULATION OF PRICE VARIATION RESULTING FROM THE I NCREASE IN PRICES OF THE VARIOUS STEEL, ZINC ETC. AND ALSO IN RESPECT OF THE LABOUR COST. THE APPELLANT ENCLOSED SEVERAL CONTRACTS, WHI CH CONTAINS PRICE VARIATION CLAUSE, AND IT IS SEEN THAT PRICE V ARIATION, IS BASED ON THE PRICE INDEX RELATING TO INPUTS PUBLISHED BY INDIAN ELECTRICAL AND ELECTRONIC MANUFACTURERS ASSOCIATION, MUMBAI. T HE APPELLANT CLARIFIED THAT PRICES OF FINISHED GOODS ARE BASED O N ESTIMATED CALCULATION OF CONSUMPTION OF QUANTITIES OF STEEL, ZINC ETC. AND LABOUR COST REQUIRED IN MANUFACTURING OF MICROWAVE TOWER OF EACH DESIGN ON THE BASIS OF CERTAIN DESIGN FOR TOWERS OF EACH HEIGHT. IT WAS FURTHER CLARIFIED THAT HOWEVER, SINCE ACTUAL DE SIGN DEPENDS ON THE SITE CONDITIONS LIKE QUALITY OF SOIL, WIND PRES SURE ETC. THIS IS BOUND TO CHANGE AT THE ACTUAL SITE WHICH RESULTS IN THE VARIATION CONSUMPTION OF CEMENT, STEEL, SAND ETC. AND THAT TH E CONTRACT DID NOT SPECIFICALLY PROHIBIT THE APPELLANT FROM MAKING A CLAIM FOR COMPENSATION FOR INCREASE IN QUANTITIES OF CONSUMPT ION OF STEEL, ZINC, LABOUR COST ETC. 5.4 THE APPELLANT ALSO PRODUCED DETAILED CORRESPOND ENCE IT HAD ENTERED INTO IN THIS REGARD WITH THE PARTIES FROM W HICH IT CAN BE CONCLUDED THAT THE APPELLANT HAS NOT RAISED DEBIT N OTES ON ITS OWN BUT THE SAME WERE IN CONTINUATION OF THE MAIN CONTR ACT AND SUBSEQUENT CORRESPONDENCE AS WELL AS THE MEMORANDUM OF THE APPELLANT WITH THE SAID PARTIES. 5.4 THUS IT WOULD WRONG TO CONCLUDE THAT THERE WAS NO PROPER DEBT THAT COULD BE WRITTEN OFF U/S 36(I)(VII). VARI OUS AGREEMENTS AND THE MEMORANDUM CLEARLY SUPPORT THAT THERE WAS A N AGREEMENT BETWEEN THE APPELLANT AND THE PARTIES FOR PAYMENT OF 6 UNITECH POWER TRANSMISSION PVT. LTD. ADDITIONAL COSTS INCURRED AND THE DEBIT NOTES RAISE D BY THE APPELLANT WERE VERY MUCH WITHIN THE TERMS OF AGREEM ENT OF THE APPELLANT WITH THE SAID PARTIES. EVIDENTLY THE APPE LLANT DID TRY ITS BEST TO RECOVER THE AMOUNT AS A PRUDENT BUSINESSMAN INSTEAD OF WRITING IT OFF IN THE YEARS IN WHICH THE SAID DEBIT NOTES WERE RAISED. THUS IT IS EVIDENT THAT THE APPELLANT HAS P ROPERLY COMPLIED WITH THE CONDITIONS AS PER PROVISION OF THE ACT AND SUCH A CLAIM OF BAD DEBTS IS FULLY ADMISSIBLE ASSUMING THE APPELLAN T'S ASSERTION THAT THE CORRESPONDING AMOUNTS HAVE BEEN OFFERED TO TAX BY THE APPELLANT IN THE EARLIER YEARS TO BE CORRECT. 5.5 IN ORDER TO VERIFY AS TO WHETHER THE BAD DEBT C LAIMED BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION W ERE TAKEN INTO ACCOUNT AS INCOME IN EARLIER YEARS, THE DETAILED SU BMISSION AND ACCOUNTS OF THE APPELLANT FOR EARLIER YEARS WERE FO RWARDED TO THE LD. AO FOR VERIFICATION AT HIS END. THE LD. AO HAS GIVEN A DETAILED REPORT WHEREIN IT HAS CLEARLY MENTIONED THAT EXCEPT FOR AN AMOUNT OF RS 706800/- AND RS. 81750/- THE SAID BAD DEBTS W RITTEN OFF HAVE BEEN DULY ACCOUNTED FOR BY THE APPELLANT IN VA RIOUS ASSESSMENT YEARS RANGING FROM AY 2001-02 TO AY 2005 -06. COPY OF THE SAID REPORT WAS HANDED OVER TO THE APPELLANT FOR HIS COMMENTS. IT WAS SUBMITTED BY THE APPELLANT AS UNDE R:- 'WE HAVE SUBMITTED ALL DETAILS AND PRODUCED RECORD BEFORE THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-7, NAG PUR. AS PER THE REPORT ALL THE CLAIM OF BAD DEBTS AMOUNTING TO RS.5.51 CRORES ARE VERIFIED AND DULY ACCOUNTED FOR AS INCOME EXCEP T FOLLOWING TWO ITEMS: SR. NO. PARTY PARTICULARS AMOUNT REMARKS 1. IVO POWER ENGINEERING LTD. VARIOUS BILLS ` 17,06,800 NOT VERIFIABLE SINCE SEVERAL BILLS 2. IVO POWER ENGINEERING LTD. WORK CONTRACT ` 81,750 NOT VERIFIABLE SINCE SEVERAL BILLS BOTH THE ABOVE AMOUNTS ARE WRITTEN OFF AGAINST SMAL L BALANCE AMOUNT OF VARIOUS BILLS WHICH COULD NOT BE RECOVERE D BY THE APPELLANT AND SUCH COULD NOT BE DIRECTLY LINKED WIT H ANY SPECIFIC BILL. IT IS GENERAL PRACTICE OF THE BUSINESS TO WRI TE-OFF SMALL AMOUNT NOT RECEIVED AGAINST ANY BI TREATING THE SAME AS DI SCOUNT, ETC. AND ASSESSEE HAS DONE THE SAME THING. AFTER CREDITING THESE AMOUNTS TO THE CREDIT OF DEBT ORS ACCOUNT WHICH WAS REMAINING AS BALANCE RECEIVABLE THE CUSTO MER ACCOUNT SHOWS NIL BALANCE WHICH MEANS CUSTOMER ACCOUNT WAS DEBITED EARLIER AND THE INCOME OF WHICH WAS ALREADY ACCOUNT ED FOR. THE APPELLANT THEREFORE, SUBMIT AND PRAYS THAT THE CLAIM OF BAD 7 UNITECH POWER TRANSMISSION PVT. LTD. DEBTS OF THESE TWO ITEMS TO AL AMOUNTING TO RS. 17, 88,550/- MAY ALSO BE CONSIDERED AND OBLIGE. 5.6 FROM THE PERUSAL OF THE REMAND REPORT AND THE R ESPONSE OF THE APPELLANT THERETO, IT IS EVIDENT THAT THE APPEL LANT HAS NOT BEEN ABLE TO PROPERLY JUSTIFY THE CLAIM TO THE EXTENT OF RS. 1706800/- AND RS. 81750/-. THE APPELLANT HAS MERELY STATED TH AT THE ABOVE AMOUNTS WERE WRITTEN OFF AGAINST SMALL BALANCE AMOU NTS OF VARIOUS BILLS, WHICH COULD NOT BE RECOVERED BY THE APPELLANT AND AS SUCH COULD NOT BE DIRECTLY LINKED WITH ANY SPECIFIC BILL. SINCE THE CLAIM OF BAD DEBTS IS BEING MADE BY THE APPELLANT, THE ONUS IS ON THE APPELLANT TO ADDUCE EVIDENCE TO ESTABLISH THAT THE SAID AMOUNTS HAS BEEN OFFERED AS TAX IN THE EARLIER YEAR S. SINCE THE APPELLANT HAS FAILED TO DO SO, THE CLAIM OF BAD DEB T TO THE EXTENT OF RS 1706800/- AND RS. 81750/- ARE NOT ALLOWABLE T O THE APPELLANT. 5.7 IT MAY ALSO BE MENTIONED THAT THE RELIANCE PLAC ED BY THE LD. AO ON THE CASE OF DOT VS. ASSOCIATED ALCOHOLS & BRE WERIES LTD. 80 TTJ 837 IS MISPLACED. IN THE SAID CASE THE ONLY CONTROVERSY THAT WAS REQUIRED TO BE DECIDED WAS WHETHER THE CLA IM OF THE APPELLANT WAS TO BE ALLOWED IN THE PREVIOUS YEAR IN WHICH THE LOSS TO THE APPELLANT HAD CRYSTALISED OR IN THE YEAR IN WHICH THE APPELLANT HAD WRITTEN OFF THE SAID AMOUNT IN ITS BO OKS OF ACCOUNT. WHILE THE VIEW TO THE JUDICIAL MEMBER WAS THAT THE AMOUNT SHOULD BE ALLOWED IN THE YEAR OF WRITE OFF, IT WAS FINALLY DECIDED THAT THE AMOUNT SHOULD BE ALLOWED IN THE YEAR IN WHICH THE L OSS HAD ACTUALLY CRYSTALLIZED. BUT THE LOSS WAS EVENTUALLY ALLOWED. HOWEVER, THE FACT IN THE CASE OF THE APPELLANT ARE DIFFERENT AS THERE IS A CLEAR RELATIONSHIP OF DEBTORS AND CREDIT ORS AND THE WRITE- OFF HAS BEEN CORRECTLY DONE DURING THE YEAR UNDER C ONSIDERATION. SIMILARLY THE FACTS OF CIT VS. NADIAD ELECTRIC SUPP LY CO LTD (1971) 80 ITR 650 (BOM), RELIED UPON BY THE ID. AO ARE ENT IRELY DIFFERENT AND CANNOT BE APPLIED TO THE FACTS OF THIS CASE. 5.8 TAKING INTO CONSIDERATION THE ABOVE TOTALITY OF FACTS, THE BAD DEBTS OF APPELLANT AMOUNTING TO RS. 53312350/- (RS. 55100900 - RS. 1706800- RS. 81750) IS HELD TO BE ALLOWABLE BAD DEBTS AS CLAIMED BY THE APPELLANT. 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL B EFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SUBMISSIONS OF THE LEARNED CO UNSEL FOR ASSESSEE 8 UNITECH POWER TRANSMISSION PVT. LTD. ARE AS UNDER: GR.NO.1 BAD DEBTS WRITEOFF U/S 36(1)(VII) OF INC OME TAX ACT 1961. A) THE PARTIES BALANCE WRITTEN OFF WAS SHOWN AS SUNDRY DEBTORS IN PAST BALANCE SHEET AND SAME IS ACCEPTED BY REVENUE AND IS NOT DISPUTED. B) THE PARTIES HAVE REGULAR BUSINESS TRANSACTIONS WITH ASSESSEE AND ARE ITS CUSTOMERS IS NOT IN DISPUTE. CLAIMS MADE BY ASSESSEE ON CUSTOMER HAVE BEEN SHOWN AS SALES/BUSINESS RECEIPT. OUTSTANDING OUT OF SAME CAN BE NOTHING ELSE THAN DEBT. C) DEBIT NOTES RAISED ARE IN RESPECT TO BUSINESS CLAIM S AND ARE PROPER DEBTS. D) THE AMOUNT WRITTEN OFF DURING THE YEAR IS SHOWN AS BUSINESS INCOME LIKE SALES/WORK CONTRACT RECEIPTS. A.O. HAVING ACCE PTED THE SAME AS SALES/WORK CONTRACT RECEIPTS IN PAST YEARS CANNOT S AY THAT OUTSTANDING AMOUNT IS NOT A DEBT. E) RELIANCE ON W/S BEFORE CIT(A) REPRODUCED AT PARA 4 AT PAGES 2 TO 11 OF ORDER OF CIT(A). RELIANCE ON: I) 323 ITR 397 (S.C.) TRF LTD. VS. CIT 7. UPON CAREFUL CONSIDERATION WE FIND THAT LEARNED CIT- A HAS ELABORATELY CONSIDERED THE ISSUE AND GIVEN FINDING THAT THE DEBTORS EMERGED OUT OF REGULAR BUSINESS TRANSACTION. HE ALS O OBTAINED REMAND REPORT FROM THE ASSESSING OFFICER. AFTER DULY CONSI DERING THE REMAND REPORT, THE LEARNED COMMISSIONER (APPEALS) ALSO SUS TAINED PART OF THE DISALLOWANCE. HENCE IN OUR CONSIDERED OPINION, THE LEARNED COMMISSIONER (APPEALS)S ORDER IS A WELL REASONED O RDER AND DOES NOT NEED ANY INTERFERENCE ON OUR PART. MOREOVER WE FIND THAT THE DEBTORS 9 UNITECH POWER TRANSMISSION PVT. LTD. HAVE BEEN DULY WRITTEN OF IN THE BOOKS. THERE IS NO DISPUTE THIS REGARD. IN SUCH SITUATION THE ISSUE STANDS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE HONBLE APEX COURT IN THE CASE OF TRF LTD. (SUPRA). IN THIS CASE, THE HONBLE APEX COURT EXPOUNDED THAT AFTER OF APRIL 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT IN FACT HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE DEBT IS WRITTENOFF AS IRRECOVERABLE IN THEIR ACCOUNTS OF T HE ASSESSEE. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIONER (APPEALS). ACCORDINGLY WE UPHOLD THE SAME. 8. IN THE RESULT THIS APPEAL BY THE REVENUE IS STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.03.2017 SD/ - RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR, DATED: 31.03.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, NAGPUR