Bindra Automotive Systems Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4134/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7002 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 17-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 24-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-3, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 4134 /DEL/201 4 A.Y. : 20 10 - 11 M/S BINDRA AUTOMOTIVE SYSTEMS PVT. LTD., 1553-1554, CHURCH ROAD, KASHMERE GATE, DELHI 6 (PAN: AADCB2016R) VS. ITO, WARD 3(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SACHIN JAIN, CA DEPARTMENT BY : NONE DATE OF HEARING : 20-06-2016 DATE OF ORDER : 01-07-2016 ORDER PER H.S. SIDHU, JM ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER D ATED 22.1.2014 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-VI, NEW DELHI PERTAINING TO ASSESSMENT YE AR 2010-11 ON THE FOLLOWING GROUNDS:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, BOTH THE LOWER AUTHORITIES HAVE GROSSLY ERRED IN MAKING AND SUSTAINING THE ADDITION BY DISALLOWING THE AMOUNT O F ITA NO. 4134/DEL/2014 A.Y. 2010-11 2 ADVANCE WRITTEN OFF AMOUNTING TO RS. 10,00,000/- DURING THE YEAR. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, BOTH THE LOWER AUTHORITIES HAVE GROSSLY ERRED IN MAKING AND SUSTAINING THE ADDITION BY DISALLOWING THE AMOUNT OF RS. 20,400/- U/S. 40(A)(IA) OF THE I.T. ACT FOR NOT DED UCTING THE TAX AT SOURCE. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTE R OR WITHDRAW ANY GROUND OF APPEAL AT THE TIME OF HEARIN G WITH THE PERMISSION OF THE HONBLE ITAT, DELHI BENC H. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN ON 13.10.2010 DECLARING NET TAXABLE INCOME OF RS. 22,90,934/- AND CLAIMING A REFUND OF RS. 43,400/-. THE ASSESSMENT ORDER DATED 19.12.2012 ON INCOME OF RS. 33,11,334/- WAS PASSED U/S. 143(3) OF THE I.T. ACT, 1961. WHILE COMPLETIN G THE ASSESSMENT THE AO HAS MADE THE FOLLOWING ADDITIONS/DISALLOWANC ES AS UNDER:- - DISALLOWANCE OF ADVANCE WRITTEN OFF RS. 10,00,0 00/- - DISALLOWANCE OF EXPENSE U/S. 40(A(IA)-RS. 20, 400/- TOTAL DISALLOWANCE RS. 10,20,400/- ITA NO. 4134/DEL/2014 A.Y. 2010-11 3 3. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEA LED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 19.12.20 12 HAS DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), AS SESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE PRESENT APPEAL CAME UP FOR HEARING BEFORE T HE BENCH ON 16.6.2016. LD. DR FILED AN APPLICATION FOR ADJOURNM ENT, BUT LD. COUNSEL OF THE ASSESSEE RAISED OBJECTION THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE VARIO US DECISIONS OF THE ITAT AND THE HONBLE HIGH COURT, THEREFORE, THE MATTER MAY BE HEARD. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTAN CES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE PRESENT APPEAL AS WELL AS THE ORDER PASSED BY THE REVENUE AUTHORITY, IN THE I NTEREST OF JUSTICE THE CASE WAS ADJOURNED FOR 17.6.2016 BEING PART HEA RD. BOTH THE PARTIES WERE DULY INFORMED ABOUT THE NEXT DATE OF H EARING I.E. 17.6.2016. AGAIN ON 17.6.2016, THE DR FILED AN APP LICATION FOR ADJOURNMENT FOR 20.6.2016 AND THE CASE WAS ADJOURNE D FOR 20.6.2016, AS THE CASE WAS PARTLY HEARD, LD. COUNS EL OF THE ASSESSEE AGAIN OBJECTED FOR ADJOURNMENT. THE DR HA S ALSO TAKEN NOTE OF THE NEXT DATE OF HEARING I.E. 20.6.2016, BU T WHEN THE CASE ITA NO. 4134/DEL/2014 A.Y. 2010-11 4 CAME UP FOR HEARING BEFORE THE BENCH ON 20.6.2016 NO ONE APPEARED ON BEHALF OF THE DEPARTMENT TILL THE CONCL USION OF THE BENCH, NOR FILED ANY APPLICATION FOR ADJOURNMENT. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, I AM OF THE CONSIDER ED OPINION THAT NO USEFUL PURPOSE WOULD BE SERVED TO ADJOURN THE CA SE AGAIN AND AGAIN, HENCE, THE REVENUES APPEAL IS DECIDED EXPAR TE QUA DR, AFTER HEARING THE LD. COUNSEL OF THE ASSESSEE AND PERUSIN G THE RECORDS. 6. DURING THE COURSE OF HEARING LD. COUNSEL OF THE ASSESSEE DRAW MY ATTENTION TOWARDS THE ORDER OF THE AO AS WELL A S LD. CIT(A) AND STATED THAT THE AUTHORITIES BELOW HAS WRONGLY MADE THE ADDITION IN DISPUTE IN SPITE OF THE FACT THAT THE AMOUNT IN DIS PUTE HAS BEEN WRITTEN OFF DURING THE YEAR UNDER CONSIDERATION. H E FURTHER STATED THAT THIS ADVANCE HAS NOT BEEN RECOVERED FROM THE PARTIES. HENCE, THE ADDITION OF RS. 10 LACS IS UNWARRANTED AND NEED S TO BE DELETED. SECONDLY, WITH REGARD TO DISALLOWANCE OF RS. 20,400 /- U/S. 40(A)(IA) OF THE ACT, LD. COUNSEL OF THE ASSESSEE HAS SUBMITT ED THAT LOWER AUTHORITIES WERE ERRED IN DISALLOWING THE PAYMENT O F PROFESSIONAL CHARGES OF YP SINGH RANA & ASSOCIATES U/S. 40A(IA) OF THE ACT, BECAUSE THIS AMOUNT REPRESENT PAYMENT OF TWO BILLS OF RS. 11,300/- AND RS. 9100/- BEING PROFESSIONAL FEES PAID FOR REN DERING SERVICES TO THE ASSESSEE AND REQUESTED THAT THE SAME MAY DELETE D. ITA NO. 4134/DEL/2014 A.Y. 2010-11 5 7. I HAVE HEARD LD. COUNSEL OF THE ASSESSEE AND PE RUSED THE RECORDS ESPECIALLY THE ORDERS OF THE REVENUE AUTHOR ITIES. WITH REGARD TO DISALLOWANCE OF RS. 10 LACS ON ACCOUNT OF ADVANCE WRITTEN OFF IS CONCERNED, I FIND THAT SINCE NO INCOME IN RE SPECT OF ADVANCES WRITTEN OFF HAVE BEEN RECOGNIZED, THE SAME CANNOT B E ALLOWED AS AN EXPENSE. THIS AMOUNT WAS PAID TO M/S KARAN ASSOCIAT ES IN THE YEAR 2000 FOR DEVELOPMENT OF PRODUCT TO BE MANUFACTURED AND SOLD BY THE ASSESSEE. THE SAID M/S KARAN ASSOCIATES NEITHE R DEVELOPED THE PRODUCT NOR REFUNDED THE AMOUNT, DESPITE VARIOUS EF FORTS, HENCE, THE SAME WAS WRITTEN OFF AS UNRECOVERABLE IN THE P &L ACCOUNT. THE EXPENSES WAS CLAIMED U/S. 37 OF THE I.T. ACT, 1961 AND THE SAME WERE NEITHER PERSONAL IN NATURE NOR CAPITAL. I NOTE THAT IT IS A SETTLED LAW THAT EVEN IN CASE OF EMBEZZLEMENT/ THEFT, SUCH LOSS IS AN ALLOWABLE EXPENDITURE AND IS INCIDENTAL TO BUSINESS . IN VIEW OF THE ABOVE, I DELETE THE ADDITION OF RS. 10 LACS AND DEC IDE THIS GROUND IN FAVOR OF THE ASSESSEE. 8. WITH REGARD TO DISALLOWANCE OF RS. 20,400/- MAD E U/S. 40(A)(IA) OF THE ACT, I FIND THAT THE ASSESSEE HAD MADE THE PAYMENT OF PROFESSIONAL CHARGES TO YP SINGH RANA & ASSOCIA TES WHICH REPRESENT PAYMENT OF TWO BILLS OF RS. 11,300/- AND RS. 9100/- BEING PROFESSIONAL FEES PAID FOR RENDERING SERVICES TO TH E ASSESSEE AND THE ITA NO. 4134/DEL/2014 A.Y. 2010-11 6 AMOUNT OF EACH OF THE BILL IS LESS THAN RS. 20,00 0/-, HENCE, I DELETE THE ADDITION OF RS. 20,400/- AND DECIDE THE ISSUE IN DISPUTE IN FAVOUR OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/07/2016. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 01/07/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES