Ms. Neha Godhwani, New Delhi V. ACIT, New Delhi

ITA 4760/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3556 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 04-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY
• Assessee Lawyers: RANO JAIN CAS
• Keywords: Bad and doubtful debts

Judgement Text

ITA NO. 4760/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4760/DEL/2010 A.Y. : 2006-07 NEHA GODHWANI, PROP. THE REGALE INN, 17/6, OLD RAJENDER NAGAR, NEW DELHI (PAN : AFMPG1166E) VS. ACIT, CIRCLE 33(1), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. VED JAIN, AND SMT. RANO JAIN, CAS DEPARTMENT BY : SMT. SRUJANI MOHANTY, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 25.8.2 010 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INC OME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF ` 8,89,373/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BAD DEBTS WRIT TEN OFF BY THE ASSESSEE. 3. IN THIS CASE THE ASSESSING OFFICER NOTED THAT ASSESSEE WAS A WAS A PROPRIETOR OF M/S THE REGAL INN AND ENGAGED IN T HE HOTEL BUSINESS. ASSESSING OFFICER NOTED THAT ASSESSEE HAS FILED T HE DETAILS REGARDING ITA NO. 4760/DEL/2010 2 THE INCOME AND INVESTMENTS MADE DURING THE YEAR AND THE SOURCES THEREOF. HOWEVER, THE ASSESSEE PLEADED INABILITY T O FILE ALL THE REQUISITE DETAILS AS DUE TO FIRE IN THE BUSINESS PR EMISES OF THE ASSESSEE THE BOOKS OF ACCOUNT HAVE BEEN DESTROYED. ASSESSIN G OFFICER HELD THAT IN THE ABSENCE OF THE RECORDS, THE CLAIM OF TH E BAD DEBTS OF ` 8,89,373/- IS NOT ALLOWABLE AS IT CANNOT BE VERIFIE D WHETHER CONDITIONS SPECIFIED U/S 36(2), NECESSARY FOR THE ALLOWABILITY OF BAD DEBTS U/S 36(1)(VII), ARE SATISFIED OR NOT. ACCORDINGLY, AS SESSING OFFICER MADE THE DISALLOWANCE. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ASSESSING OFFICERS ACTION. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. LD. COUNSEL O F THE ASSESSEE CLAIMED THAT THE ASSESSEE HAS DULY WRITTEN OFF THE B AD DEBTS DURING THE CURRENT YEAR AND ASSESSEES ACCOUNTS HAVE BEEN ACCEPTED IN EVERY RESPECT EXCEPT THE CLAIM OF BAD DEBTS WRITTEN OFF. LD. COUNSEL CONTENDED THAT THE BAD DEBT HAS BEEN DULY WRITTEN O FF. HENCE, THE SAME SHOULD BE ALLOWED. UPON CAREFUL CONSIDERATIO N, WE FIND THAT THE ASSESSEE HAS DULY WRITTEN OFF THE BAD DEBTS IN TH E PROFIT AND LOSS ACCOUNT AND THE SAME IS REFLECTED ALSO IN THE BALA NCE SHEET. HENCE, IN ITA NO. 4760/DEL/2010 3 OUR CONSIDERED OPINION, THERE IS NO REASON FOR DISA LLOWANCE. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHOR ITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/7/2011. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 08/7/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES