MALAD SAHAKARI BANK LTD, MUMBAI V. ITO 1(3)(3), MUMBAI

ITA 4937/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7960 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 17-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Assessee Lawyers: JAYESH KALA
• Keywords: Opportunity of being heard; Bad and doubtful debts

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI RAVISH SOOD (JM) I.T.A. NO. 4937 /MUM/ 2017 (ASSESSMENT YEAR 20 13 - 14 ) M/S. THE MALAD SAHAKARI BANK LTD. 6, SUJATA NIKETAN RANI SATI MARG, MALAD EAST MUMBAI - 400 097 . PAN : AAAAT0320R V S . ITO 1(3)(3) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI JAYESH KALA DEPARTMENT BY SHRI D.G. PANSARI DATE OF HEARING 17 .6 . 201 9 DATE OF PRONOUNCEMENT 1.7 . 201 9 O R D E R PE R SHAMIM YAHYA (AM) : - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 20.4.2017 AND PERTAINS TO A.Y. 2013 - 14. 2. GROUNDS OF APPEAL READS AS UNDER : - 1 . ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSION ER OF INCOME TAX (APPEALS) ERRED IN DISALLOWING THE AMOUNT OF RS. 53,35,112 / - BEING IN THE NATURE OF BAD DEBTS WRITTEN OFF IN THE PROFIT & LOSS ACCOUNT WITHOUT UNDERSTANDING THE FACTS & CIRCUMSTANCES OF THE CASE & THE REASONS ASSIGNED FOR DOING SO ARE WRON G & CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT & THE RULES MADE THERE UNDER. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR MODIFY ALL OR ANY OF THE ABOVE GROUND OF APPEAL ON OR BEFORE THE DATE OF HEARING 3. BRIEF FACTS OF THE CASE ARE AS UNDER : - THE ASSESSING OFFICER IN THIS CASE MADE A DISALLOWANCE OF CLAIM OF BAD DEBTS WRITTEN OFF BY OBSERVING AS UNDER : - FROM THE COMPUTATION OF INCOME IT WAS ALSO NOTICED THAT THE ASSESS E E BANK HAS NOT MADE ANY PROVISION FOR BAD DEBTS EXCEPT FOR A .Y. 2009 - 10 OF RS.90,00,000/ - & A.Y.2010 - 11 RS. 1,00,00,000 / - THE TOTAL THEREAFTER M/S. THE MALAD SAHAKARI BANK LTD. 2 COMES TO RS. 1,90,00,000 / - . HENCE IT CAN BE SEEN FROM THE ABOVE TABLES TABLE - I II AND TABLE - IV, WHICH ARE RECTIFIED AFTER VERIFICATION OF COMPUTATION OF INCOME THAT ASSESSE E HAS MADE PROVISION OF RS. 1,90,00,000 / - ONLY FROM A.Y. 2007 - 08 TO 2013 - 14 AND TOTAL BAD DEBTS WRITTEN OFF DURING THESE YEARS I.E . 2007 - 08 TO 2013 - 14 AMOUNTS TO RS.4,09,61,344 / - . IT CAN ALSO BE SEEN FROM THE TABLE - ILL WHEREIN THE ASSESSE E BANK HAS CLAIMED D EDUCTION U/S 36( 1 )(VIIA) TOTALING TO RS. 1,55,23,514 / - . DURING THE ASSESSMENT PROCEEDING, THE AR OF THE ASSESSE E WAS ASKED TO JUSTIFY THE CLAIM OF BAD DEBTS WRITTEN OFF AMOUNTING TO RS.53,35,112 / - DURING THE RELEVANT ASSESSMENT YEAR. THE AR OF THE ASSESSE E HAD NO EXPLANATION WHATSOEVER TO DEFEND ITS CLAIM OF BAD DEBTS WRITTEN OFF. FROM THE ABOVE IT IS CONCLUDED THAT ASSESS E E HAS CLAIMED BAD DEBTS WRITE OFF MORE THAN THE DEDUCTION U/S 36(1 )(VIIA) TO HIS CREDIT. THE ASSESSE E BANK HAS ALREADY CLAIMED DEDUCTION U/S 36( 1)(VIIA) OF RS.1,55,23,514/ - UNTIL THE CURRENT YEAR. HENCE THE ASSESS E E BANK IS NOT ELIGIBLE TO CLAIM THE BAD' DEBTS WRITTEN OFF AMOUNTING TO RS. 53,35,112/ - . IN VIEW OF THE ABOVE DISCUSSION, BAD DEBTS WRITTEN OFF AMOUNTING TO RS. 53,35,112/ - IN TH E COMPUTATION OF INCOME IS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSE E. 4. UPON ASSESSEES APPEAL LEARNED CIT(A) CONFIRMED THE SAME. AGAINST THE ORDER OF LEARNED CIT(A), ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSE L AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT AT ALL APPRECIATED THE ISSUE. HE SUBMITTED THAT THE ASSESSEE HAS GIVEN DUE EXPLANATION TO THE ASSESSING OFFICER. BUT HE PLEADED THAT ASSESSING OFFICER H AS WRONGLY NOTED THAT NO EXPLANATION WAS GIVEN BY THE ASSESSEE. LEARNED COUNSEL PLEADED THAT ASSESSEES CLAIM IS DULY IN ACCORDANCE WITH THE PRESCRIPTION OF THE PROVISIONS OF THE ACT. HE CLAIMED THAT THE ASSESSEE HAS DULY DEBITED THE IMPUGNED S UM AND THE S AME IS ALLOWABLE AS PER THE PROVISIONS OF THE ACT. LEARNED COUNSEL PLEADED THAT AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE BEFORE THE ASSESSING OFFICER TO EXPLAIN THE FACTS AND PROVISIONS OF LAW IN THIS REGARD. 6. LEARNED DEPARTMENTAL REPRESENTATIVE FAIR LY AGREED WITH THE ABOVE PROPOSITION. M/S. THE MALAD SAHAKARI BANK LTD. 3 7. UPON CAREFULLY CONSIDERATION, WE ARE INCLINED TO REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO PROPERLY CONSIDER THE SUBMISSION OF THE ASSESSEE AND THEREAFTER DECIDE TH E ISSUE AS PER LAW. NEEDLESS TO ADD THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 1.7 . 201 9 . SD/ - SD/ - (RAVISH SOOD ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 1 / 7 / 20 1 9 COPY OF THE ORDER FORWARDE D TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI