M/S Carry fast Agencies, Indore, Indore V. Pr. CIT-1 Indore, Indore

ITA 432/Ind/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7477 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 08-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: S N AGRAWAL; PANKAJ MOGRA A RS
• Keywords: Question of law; Revenue expenditure
• Section: 263

Judgement Text

CARRY FAST AGENCIES INDORE ITA 432 OF 2018 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.432/IND/2018 ASSESSMENT YEAR: 2013-14 M/S. CARRY FAST AGENCIES, INDORE / VS. PR. CIT INDORE (APPELLANT) (REVENUE ) P.A. NO. AAAFC 8579 Q APPELLANT BY SHRI S.N. AGRAWAL & SHRI PANKAJ MOGRA, ARS RESPONDENT BY SHRI S.B. PRASAD, CIT/DR DATE OF HEARING: 27.1.2020 DATE OF PRONOUNCEMENT: 29.1.2020 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. PR. CIT-1, INDORE DATED 19.3.2018 FOR THE A.Y. 2013-14. CARRY FAST AGENCIES INDORE ITA 432 OF 2018 2 2. THE ASSESSEE HAS CHALLENGED THE ORDER OF LD. PR. CIT PASSED U/S 263 FOR SETTING ASIDE THE ASSESSMENT ORD ER FOR RE-DECIDING THE ISSUE RELATED TO DISALLOWANCE OF EM PLOYEES CONTRIBUTIONS AT RS.4,44,993/- & RS.2,60,548/-, RESPECTIVELY, TOWARDS PF AND ESIC. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THIS ISSUE IS NO MORE RES INTEGRA. THE ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY T HE JUDGEMENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX, JAIPUR-2 VS. M/S. RAJASTHAN STATE BEVERAGES CORPORATION LTD. AND THE SLP PREFERRED BY THE REVENUE HAS BEEN DISMISSED BY THE HON'BLE SUPREME COURT VIDE ORDER DATED 4.7.2017. 4. ON THE CONTRARY, LD. CIT/D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITI ES BELOW. CARRY FAST AGENCIES INDORE ITA 432 OF 2018 3 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE O RDERS OF THE AUTHORITIES BELOW. THE HON'BLE RAJASTHAN HI GH COURT IN THE CASE CITED (SUPRA) HAS HELD AS UNDER: 3. HOWEVER, TAKING INTO CONSIDERATION, THE JUDGEMEN T OF THIS COURT IN THE CASE OF ASSESSEE ITSELF IN D.B. INCOME TAX APPEAL NO.150/2016 (PRINCIPAL COMMISSIONER OF INCOME TAX, JAIPUR-2 VS. M/S. RAJASTHAN STATE BEVERAGES CORPN. LTD.) DECIDED ON 4 .8.2016 WHEREIN DIVISION BENCH OBSERVED AS UNDER: 5. SO FAR AS THE QUESTION RELATING TO PRIVILEGE F EES AMOUNTING TO RS.26.00 CRORES IN THE INSTANT YEAR AS WELL AS THE DEDUCTION OF CLAIM OF RS.17,80,765/- ON ACCOUNT OF PROVIDENT FUND (PF) AN D ESI IS CONCERNED, THE COURT HAS EXTENSIVELY CONSIDERED THE AFORESAID TWO QUESTIONS IN ASSESSEES OWN CASE VIDE JUDGEMENT AND ORDER DATED 26.5.2016 REFERRED TO (SUPRA) AND HAS HELD THAT THE PRIVILEGE FEES BEI NG A REVENUE EXPENDITURE, IS REQUIRED TO BE ALLOWED AS A REVENUE EXPENDITURE. THIS COURT IN THE AFORESAID CASE HAS ALSO ALLOWED THE CLAIM OF THE AS SESSEE, IN SO FAR AS PAYMENT OF PF& ESI ETC. IS CONCERNED, ON THE FINDIN G OF FACT THAT THE AMOUNTS IN QUESTION WERE DEPOSITED ON OR BEFORE THE DUE DATE OF FURNISHING OF THE RETURN OF INCOME AND TAKING IN CONSIDERATION JUDGEMENT OF THIS COURT IN COMMISSIONER OF INCOME TAX VS. STATE BANK OF BIK ANER & JAIPUR AND COMMISSIONER OF INCOME TAX VS. JAIPUR VIDYUT VITARA N NIGAM LTD. (2014) 363 ITR 70 (RAJ.) AND ACCORDINGLY BOTH THE QUESTION S ARE COVERED BY THE AFORESAID JUDGEMENT AND AGAINST THE REVENUE. 6. IN SO FAR AS THE CLAIM ABOUT BAD DEBT OF RS.12,7 9,968/- IS CONCERNED, WE NOTICE THAT THE SAID AMOUNT RELATES T O DEBIT BALANCES OF THE SUPPLIER WHICH REMAINED OUTSTANDING SINCE 2005-06 A ND 2007-08 AND IT WAS THE CLAIM OF THE ASSESSEE THAT THE ADVANCES WER E GIVEN TO THE SUPPLIERS FOR BUSINESS PURPOSES BUT SUPPLY OF LIQUO R WAS NOT RECEIVED AND THERE IS A FINDING OF FACT RECORDED BY THE CIT (A) AS WELL AS THE TRIBUNAL AND COULD NOT BE DISPUTED BY THE COUNSEL FOR THE RE VENUE THAT THE AMOUNTS WERE OLD AND OUTSTANDING AND THE SAID AMOUNT WAS WR ITTEN OFF IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SEC.36 (1)(VII) OF THE ACT. THE CIT(A) AS WELL AS THE TRIBUNAL HAS TAKEN INTO CONSI DERATION THE JUDGEMENT CARRY FAST AGENCIES INDORE ITA 432 OF 2018 4 OF THE APEX COURT IN THE CASE OF T.R.F. LTD. VS. CI T :(2010) 323 ITR 397 AND RECORDED A FINDING OF FACT THAT THE SAID AMOUNT HAVING BECOME IRRECOVERABLE, THE ASSESSEE HAS RIGHTLY WRITTEN OFF THE SAME AND MERELY BECAUSE THE ASSESSEE HAS NOT FILED ANY CLAIM, THAT COULD NOT BE CONSIDERED TO BE A GROUND FOR 4 DISALLOWING A BAD DEBT. 6.1 ADMITTEDLY, THE AMOUNTS WERE LYING OUTSTANDING FOR THE LAST COUPLE OF YEARS AND THE ASSESSEE HAS RIGHTLY WRITTEN OFF T HE SAID AMOUNT IN THE BOOKS OF ACCOUNTS AND MERELY BECAUSE A SUIT WAS NOT FILED AND THAT CANNOT BE CONSIDERED TO BE A COGENT REASON TO DISALLOW THE CLAIM WHICH BECAME BAD. ONE NEED NOT INCUR GOOD MONEY FOR RECOVERY OF THE SO CALLED IRRECOVERABLE OR A BAD MONEY, AND FILE A SUIT WHICH REMAINS PENDING FOR YEARS AND WITH UNCERTAINTY. 7. IN THE LIGHT OF THE JUDGEMENT IN ASSESSEES OWN CASE, THE FIRST TWO QUESTIONS BEING COVERED AGAINST THE REVENUE, NO MOR E REMAINS SUBSTANTIAL QUESTION OF LAW WHICH CAN BE CONSIDERED BY THIS COU RT AND SO FAR AS QUESTION OF BAD DEBT IS CONCERNED, ESSENTIALLY IT I S BASED N A FINDING OF FACT AND NO SUBSTANTIAL QUESTION OF LAW CAN BE SAID TO E MERGE OUT OF THE ORDER OF THE TRIBUNAL. 6. RESPECTFULLY FOLLOWING THE BINDING PRECEDENT CIT ED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT PRIOR TO INVOKING THE PROVISIONS OF SECTION 263 OF THE I.T. ACT, THE O RDER IN QUESTION MUST BE ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESSING OFFICER IN THE PRE SENT CASE HAD ALLOWED THE CLAIM OF THE ASSESSEE TAKING P OSSIBLE VIEW AND IN THE LIGHT OF THE AFORESAID DECISION, TH E ORDER OF THE ASSESSING OFFICER CANNOT BE SAID TO BE ERRONEOU S AND ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. THUS, W E SET CARRY FAST AGENCIES INDORE ITA 432 OF 2018 5 ASIDE THE ORDER OF THE LD. PR. CIT AND RESTORE THAT OF THE ASSESSING OFFICER. 7. IN RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29 .1.202 0. SD/- SD/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED : 29/1/2020 !VYAS! COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUARD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE