ACIT, CIRCLE- 21(1), NEW DELHI V. RATNA COMMERCIAL ENTERPRISES PVT. LTD., NEW DELHI

ITA 5201/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7950 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 10-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KR YADAV
• Keywords: Bad and doubtful debts; Tax effect
• Section: 254(2)

Judgement Text

ITA NO.- 5201/DEL/2017. RATNA COMMERCIAL ENTERPRISES PVT. LTD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: F: NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 5201/DEL/2017 ( ASSESSMENT YEAR: 2012-13) ACIT, CIRCLE- 21(1), NEW DELHI. VS. M/S RATNA COMMERCIAL ENTERPRISES PVT. LTD., 4 TH FLOOR, PUNJABI BHAWAN-10, ROUSE AVENUE NEW DELHI-110002. PAN NO: AAACR0354B APPELLANT RESPONDENT REVENUE BY : SHRI SUNIL KR. YADAV, SR. DR ASSESSEE BY : SHRI M.P. RASTOGI, ADV. PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL BY REVENUE IS FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 36, NEW DELHI, [LD. CIT(A), FOR SHORT], DATED 12.05.2017 FOR ASSESSMENT YEAR 2012-13. GROUNDS TAKEN IN THIS APP EAL OF REVENUE ARE AS UNDER: 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN ALLOWING THE AMOUNT OF RS. 37.48 LACS TO W RITE OFF AS BAD DEBTS U/S 36(1)(III) OF THE I.T. ACT, 1961. SINCE, THE ASSESSEE IS AN INVESTMENT COMPANY AND NOT A LOAN COMPANY AS PER NB FC DIRECTIONS AND HENCE WRITE OFF OF LOAN AND ADVANCES CANNOT BE CONSIDERED AS NORMAL BUSINESS ACTIVITIES U/S 36(1)( III) OF THE ACT. ITA NO.- 5201/DEL/2017. RATNA COMMERCIAL ENTERPRISES PVT. LTD. PAGE 2 OF 4 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION TO THE TUNE OF 25% O F RS. 31,59,589/- ON ACCOUNT OF BUSINESS PROMOTION EXPENS ES. THE ASSESSEE HAS CLAIMED THESE EXPENSES IN ITS PROFIT & LOSS ACCOUNT WITHOUT GIVING ANY JUSTIFICATION OR EVIDENCE TO THE EFFECT THAT THESE EXPENSES ARE NECESSARILY INCURRED FOR THE BUSINESS OF THE ASSESSEE. 3. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FR ESH GROUNDS OF APPEAL AND/OR DELETE OR MEND ANY OF THE GROUNDS OF APPEAL. (B) AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE BRO UGHT TO OUR NOTICE, AT THE TIME OF HEARING, THAT TAX EFFECT IN THIS APPEAL IS BELOW RS. 50,00,000/-. BOTH SIDES, [REPRESENTATIVES OF REVENUE AND THE ASSESSEE] WERE IN AGREEMENT, AT THE TIME OF HEARING BEFORE US, THAT THE TAX EFFECT IN THE PRESE NT APPEAL IS BELOW RS. 50,00,000/-. VIDE RECENT CBDT CIRCULAR NO. 17/2019 DATED 08.08.2 019 READ WITH EARLIER CBDT CIRCULAR NO. 3 OF 2018, DATED 11.07.2018, MINIMUM THRESHOLD LIMIT OF TAX EFFECT OF FILING OF APPEALS BY REVENUE IN INCOME TAX APPELLATE TRIBU NAL HAS BEEN ENHANCED TO RS. 50,00,000/-. IN A SUBSEQUENT CLARIFICATION ISSUED BY CBDT VIDE F.NO. 279/MISC/M- 93/2018-ITJ, DATED 20/08/2019, IT HAS BEEN CLARIFIE D BY CBDT THAT THE AFORESAID REVISED MONETARY LIMIT IS ALSO APPLICABLE TO ALL PENDING AP PEALS IN ITAT. HAVING REGARD TO THE AFORESAID, THE LD. SR. DEPARTMENTAL REPRESENTATIVE FOR REVENUE DID NOT PRESS THE APPEAL. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE APPEAL WAS NOT MAINTAINABLE IN VIEW OF THE AFORESAID CBDT CIRCULAR DATED 08.08.2019 AND 11.07.2018; AND AFORESAID CLARIFICATION DATED 20.08.2019 ISSUED BY CBDT. THEREFORE, THIS APPEAL IS DISMISSED BEING NOT PRESSED AND ALSO BEING NOT MAIN TAINABLE HAVING REGARD TO AFORESAID CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019 READ WIT H AFORESAID CBDT CIRCULAR NO. 3 OF 2018 IN THE LIGHT OF AFORESAID CLARIFICATION DAT ED 20/08/2019. ITA NO.- 5201/DEL/2017. RATNA COMMERCIAL ENTERPRISES PVT. LTD. PAGE 3 OF 4 (C) BEFORE LEAVING, WE CLARIFY THAT REVENUE WILL BE AT LIBERTY TO APPROACH INCOME TAX APPELLATE TRIBUNAL U/S 254(2) OF INCOME TAX ACT, 1961 SEEKING RECALL OF THIS ORDER AND, FOR RESTORATION OF THIS A PPEAL IF IT IS FOUND THAT APPEAL OF REVENUE IS NOT COVERED BY AFORESAID CBDT CIRCULA RS DATED 08.08.2019 AND 11.07.2018. (D) IN THE RESULT, THIS APPEAL BY REVENUE IS DISMISSED. OUR DECISION WAS ORALLY PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HE ARING ON THE DATE OF HEARING. NOW, THIS WRITTEN ORDER IS PRONOUNCED IN OPEN COURT ON 2 7/01/2020. SD/- SD/- (H.S. SIDHU) (ANA DEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 27.01.2020 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.- 5201/DEL/2017. RATNA COMMERCIAL ENTERPRISES PVT. LTD. PAGE 4 OF 4 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER