Sri T Ramachandra Prabhu, Guntur V. The ACIT Circle-2(1) Guntur, Guntur

ITA 409/VIZ/2005

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56865 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-12-2011
• Assessment Year: misc
• Appeal Filed On: 28-09-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Assessee Lawyers: SHRI GVN HARI
• Keywords: Bad and doubtful debts; Notional interest

Judgement Text

ITA NO.409 TO 411/VIZAG/2005 T. RAMACHANDRA PRABHU, GUNTUR. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D MANMOHAN, VICE PRESIDENT AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NOS.409 TO 411/VIZAG/2005 ASSESSMENT YEARS: 1999-2000,2001-02 &2002-03. T. RAMACHANDRA PRABHU, D.NO.6-4-6,, 4/5, ARUNDELPET, GUNTUR. ASST. COMMISSIONER OF INCOME-TAX, CIR-2(1), GUNTUR. (APPELLANT) PAN NO: ABLCPT 4938 R VS. (RESPONDENT) APPELLANT BY: SHRI SHRI GVN HARI, CA RESPONDENT BY: SMT. D. KOMALI KRISHNA DATE OF HEARING: 16-12-2011. DATE OF PRONOUNCEMENT: 16-12-2011. ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THESE THREE APPEALS OF THE ASSESSEE ARE DIRECTED AG AINST THE SEPARATE ORDERS PASSED BY LEARNED CIT(A), GUNTUR AN D THEY RELATE TO THE ASSESSMENT YEARS 1999 -2000, 2001-02 AND 2002-03. SINCE CERTAIN ISSUES URGED IN THESE APPEALS ARE IDENTICAL IN NATURE, THE Y WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THE ISSUES WHICH ARE IDENTICAL IN NATURE IN ALL THE THREE YEARS ARE STATED BELOW:- (A) DISALLOWANCE OF INTEREST CLAIMED IN THE FINANCE DIVISION OF M/S CHANDRA TRANSPORTS. (B) ADDITION OF NOTIONAL INTEREST ON SUNDRY DEBTORS BALANCES IN THE BUSINESS CONCERN NAMED M/S COASTAL PACKAGINGS. ITA NO.409 TO 411/VIZAG/2005 T. RAMACHANDRA PRABHU, GUNTUR. PAGE 2 OF 4 3. AT THE TIME OF HEARING, BOTH THE PARTIES AGR EED THAT BOTH THE ISSUES CITED ABOVE ARE IDENTICAL IN FACTS WITH THE ISSUES DECIDED BY THE TRIBUNAL, VIDE ITS ORDER DATED 11.11.2009, IN THE ASSESSEES OWN CASE IN ITA NOS. 482 & 483/VIZAG/2006 AND ITA NO.509/VIZAG/2007 RELATING TO THE ASSESSMENT YEARS 1998-99, 2003-04 AND 2004-05 RESPECTIVELY. T HE LEARNED A.R PLACED BEFORE US COPY OF THE SAID ORDER DATED 11.11.2009 P ASSED BY THE TRIBUNAL REFERRED (SUPRA). WE HAVE GONE THROUGH THE SAME AN D NOTICE THAT THE FIRST ISSUE RELATING TO DISALLOWANCE OF INTEREST EXPENDIT URE CLAIMED IN M/S CHANDRA TRANSPORT WAS SET ASIDE TO THE FILE OF ASSE SSING OFFICER AND THE ADDITION MADE ON ACCOUNT OF NOTIONAL INTEREST WAS D ELETED. CONSISTENT WITH THE VIEW TAKEN IN THE ORDER DATED 11.11.2009 REFERR ED (SUPRA), WE SET ASIDE THE ORDER OF LEARNED CIT(A) ON THE FIRST ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO C ONSIDER IT AFRESH IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE TRIBUNA L IN THE ORDER CITED ABOVE. SIMILARLY, FOR THE DETAILED REASONS GIVEN I N THE ORDER DATED 11.11.2009, WE SET ASIDE THE ORDER OF LEARNED CIT(A ) ON THE SECOND ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDI TION MADE ON ACCOUNT OF NOTIONAL INTEREST. 4. IN APPEAL NUMBERED AS ITA NO.409/V/2005 RELA TING TO THE ASSESSMENT YEAR 1999-2000, THE ASSESSEE HAS ALSO CHALLENGED TH E ADDITION MADE UNDER SECTION 44AE OF THE ACT. AT THE TIME OF HEARING, T HE LEARNED A.R DID NOT PRESS THE GROUND RELATING TO THE SAME AND ACCORDING LY IT IS DISMISSED AS NOT PRESSED. 5. IN APPEAL NUMBERED AS ITA NO.411/V/2005, THE ASSESSEE HAS RAISED FOLLOWING TWO MORE GROUNDS: (A) DISALLOWANCE OF BAD DEBTS RS.17,71,650/- (B) DISALLOWANCE OF CARRY FORWARD LOSS OF RS.7,09 ,420/-. ITA NO.409 TO 411/VIZAG/2005 T. RAMACHANDRA PRABHU, GUNTUR. PAGE 3 OF 4 AT THE TIME OF HEARING, LEARNED A.R DID NOT PRESS T HE GROUND RELATING TO THE DISALLOWANCE OF CARRY FORWARD LOSS. ACCORDINGLY TH E GROUND RELATING TO THE SAME IS DISMISSED AS WITHDRAWN. 5.1 THE OTHER GROUND RELATES TO THE DISALLOWANCE OF BAD DEBTS CLAIMED BY THE ASSESSEE. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF BAD DEBTS OF RS.17,71,650/- FOR THE REASON THAT THE ASSESSEE DID NOT ESTABLISH THAT THE CONCERNED DEBTS HAVE REALLY BECOME BAD. HOWEVER, T HE LAW IS NOW WELL SETTLED THAT FOR THE PURPOSE OF CLAIMING A DEBT AS BAD UNDER SECTION 36(1)(VII), IT IS SUFFICIENT IF THE SAID DEBT IS WR ITTEN OFF AS BAD DEBT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT HAS BEEN SO HELD BY HON'BLE SUPREME COURT IN THE CASE OF TRF LIMITED VS. CIT RE PORTED IN 323 ITR 397. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT (A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALL OWANCE. 6. IN THE RESULT, THE APPEALS RELATING TO THE ASSE SSMENT YEARS 1999- 2000 AND 2002-03 ARE TREATED AS PARTLY ALLOWED AND THE APPEAL RELATING TO THE ASSESSMENT YEAR 2001-02 IS TREATED AS ALLOWED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 16-12- 2011 SD/- SD/- (D MANMOHAN) (B R BASKARAN) VICE PRESIDENT ACCOUNTANT M EMBER JMR/SPS VISAKHAPATNAM, DATE:16 TH DECEMBER 2011 ITA NO.409 TO 411/VIZAG/2005 T. RAMACHANDRA PRABHU, GUNTUR. PAGE 4 OF 4 COPY TO 1 SRI T. RAMACHANDRA PRABHU, C/O M/S V. RAO & GOPI, CAS, 26-1-77,1 ST FLOOR, NAGARAMPALEM, GUNTUR.-4. 2 THE ACIT, CIRCLE-2(1), GUNTUR. 3 4. THE CIT GUNTUR THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM