M/s. Neotech Engineers, Baroda V. The ACIT.,Circle-2(2), Baroda

ITA 4090/AHD/2008

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1741 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-03-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 19-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAWANSI
• Assessee Lawyers: M J SHAH
• Keywords: Bad and doubtful debts
• Section: 143(3)

Judgement Text

ITA NO.409 0/AHD/2008 ASSESSMENT YEAR 2004-05 1 IN THE INCOME_TAX APPELLATE TRIBUNAL D BENCH,AH MEDABAD BEFORE SHRI G.D. AGARWAL V.P. & SHRI MUKUL KR SHRAWAT. I.T.A. NO. 4090/AHD/2008. (ASSESSMENT YEAR: 2004-05) M/S. NEOTECH ENGINEERS, 300/B, GIDC RAMANGAMDI, POR, DIST: BARODA-391 243. (APPELLANT) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(2), AAYAKAFR BHAVAN, NEAR RACE COURSE CIRCLE, BARODA. (RESPONDENT) PAN: AABFN 3258 J APPELLANT BY : SHRI M. J. SHAH. RESPONDENT BY : SHRI G. S. SOURYAWANSI, D.R. ( (( ( )/ )/)/ )/ ORDER PER: SHRI MUKUL KUMAR SHRAWAT, J.M. THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) DATED 8-9-2008. THE SUBSTANTATIVE GROUND NO.1 IS REPRODUCED BELOW:- ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELLANTS CASE AND IN LAW THE LD. C.I.T. (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.4,56,745/- CLAIMED AS BAD DEBTS, ON THE GROUND THAT YOUR APPELLANT HAS NOT SUBMITTED ANY EVIDENCE TO PROVE THAT THE DEBT HAD BECOME BAD. 2. THE FACTS IN BRIEF AS EMERGED FROM THE ASSESSMEN T ORDER PASSED U/S. 143(3) DATED 23-10-2006 WERE THAT AN AMOUNT OF RS.4 ,56,735/- WAS WRITTEN OFF AND CLAIMED AS BAD DEBT FOR THE YEAR UNDER CONSIDER ATION. THOSE SUNDRY BALANCES WERE IN RESPECT OF THREE PARTIES AND THE A SSESSING OFFICER HAS HELD THAT THE ASSESSEE HAS NOT ESTABKLISHED THAT THERE WAS AN Y RAY OF HOPE FOR THE ITA NO.409 0/AHD/2008 ASSESSMENT YEAR 2004-05 2 RECOVERY OF THE DEBT; THEREFORE, DISALLOWED THE CLA IM. THE MATTER WAS CARRIED OUT BEFORE THE FIRST APPELLATE AUTHORITY WHO HAS AFFIRM ED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE DEBTS HAVE NOT BECOM E BAD ON OR NON RECOVERABLE, THEREFORE, NOT ALLOWABLE AS BAD DEBT FOR THE YEAR U NDER CONSIDERATION. 3. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, ONCE IT WAS AN ADMITTED FACTUAL POSITION THAT THE OUTSTANDING BALANCE IN TH E ACCOUNTS OF THE SUNDRY DEBTORS WAS WRITTEN OFF IN THE BOOKS OF ACCOUNTS DU RING THE YEAR UNDER CONSIDERATION, THEREFORE, THE ISSUE NOW STOOD COVER ED BY A LATEST DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD., 323 ITR 397 WHEREIN IT HAS BEEN HELD AS UNDER:- AFTER THE AMENDMENT OF SECTION 36(1)(VII) OF THE INCOME TAX ACT,1961, WITH EFFECT FROM APRIL 1, 1989, IN ORDER TO OBTAIN A DEDUCTION IN RELATION TO BAD DEBTS, IT IS NOT NECESSARY FOR T HE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECO VERABLE: IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERA BLE IN THE ACCOUNTS OF THE ASSESSEE. RESPECTFULLY FOLLOWING THIS DECISION OF THE SUPREM E COURT THIS GROUND IS ALLOWED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 18 / 3 /2011. SD/- SD/- ( G. D. AGARWAL) (MUKUL KUMAR SHRAWAT) VICE PRESIDENT JU DICIAL MEMBER. AHMEDABAD. DATED: 18- 3 -2011. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. ITA NO.409 0/AHD/2008 ASSESSMENT YEAR 2004-05 3 3. THE CIT(APPEALS)- 4. THE CIT CONCERNED. 5. THE DR.,ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDA BAD. 1.DATE OF DICTATION 10-3-2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 11-3- 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S -3-2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT -3-2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S -3 -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK -3 -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..