The ACIT, Circle-1, Ahmedabad V. Amtrex Ambience Ltd., Ahmedabad

ITA 541/AHD/2006

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80324 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-08-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 03-03-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Keywords: Bad and doubtful debts; Tax effect

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.541/AHD/2006 [ASSTT.YEAR : 2002-2003] ACIT, CIR.1 AHMEDABAD. /VS. AMTREX AMBIENCE LTD. 9 TH FLOOR, ABHIJIT BUILDING MITHAKHALI SIX ROADS AHMEDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI NIMESH YADAV, SR.DR 4& 1 2 )/ ASSESSEE BY : SHRI P.M. MEHTA 5 1 &(*/ DATE OF HEARING : 4 TH AUGUST, 2014 678 1 &(*/ DATE OF PRONOUNCEMENT : 05/09/2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSTT.YEAR 2002-2003 IS DIRECTED AGAINST TH E ORDER OF THE CIT(A). 2. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW THE CLAIM OF BAD DEBTS OF RS.20,48,399/- 3. IN THE FIRST ROUND OF LITIGATION BEFORE THE TRIB UNAL, THE TRIBUNAL HAS DISMISSED THE APPEAL OF THE REVENUE ON THE GROUND T HAT THE DISPUTED TAX EFFECT WAS BELOW RS.2 LAKHS, AND THEREFORE, THE APP EAL WAS NOT ITA NO.541/AHD/2006 -2- MAINTAINABLE BEFORE THE TRIBUNAL, AND HAD NOT DECID ED THE APPEAL OF THE REVENUE ON ITS MERITS. THE REVENUE PREFERRED AN AP PEAL TO THE HONBLE JURISDICTIONAL HIGH COURT, WHICH VIDE ITS ORDER DAT ED 8.10.2013 IN TAX APPEAL NO.2493 OF 2009 HAS SET ASIDE THE ORDER OF T HE TRIBUNAL, AND THE APPEAL WAS REMANDED TO THE TRIBUNAL TO DECIDE THE S AME ON MERITS IN ACCORDANCE WITH LAW, AFTER ISSUE OF NOTICE TO THE A SSESSEE. ACCORDINGLY, THE PRESENT APPEAL IS FIXED FOR HEARING BEFORE THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUT SET, SUBMITTED THAT THE ISSUE OF ALLOWABILITY OF BAD DEBTS IS NOW COVERED W ITH THE BINDING DECISION OF THE HONBLE APEX COURT IN TRF LTD. VS. CIT, 323 ITR 397 (SC) AND THE CIT(A) HAS FOLLOWED THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN GIRISH BHAGWATPRASAD, 256 ITR 772 WHEREIN HELD THAT ONCE IT IS ESTABLISHED THAT THE ASSESSEE HAD WRITTEN OFF BUSIN ESS DEBT, IT IS NOT NECESSARY TO ESTABLISH THAT THE SAID DEBT HAD BECOM E BAD. THE LEARNED DR HAS OPPOSED THE SUBMISSION OF THE LEARNED COUNSEL F OR THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE COULD NOT PROVE IN THIS CASE THAT THE DEBT HAS BECOME BAD. HE RELIED ON THE ORDER OF THE AO. 5. WE HAVE CONSIDERED RIVAL SUBMISSION AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ISSUE OF ALLOW ABILITY OF BAD DEBTS IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISIO N OF THE HONBLE APEX COURT AND ALSO WITH THE DECISION OF THE HONBLE JUR ISDICTIONAL HIGH COURT CITED SUPRA. WE FIND THAT THE CIT(A) HAS RIGHTLY F OLLOWED THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN GIRISH BHAGWATPRA SAD (SUPRA) WHEREIN HELD THAT ONCE IT IS ESTABLISHED THAT THE ASSESSEE HAS WRITTEN OFF THE BUSINESS DEBT, IT IS NOT NECESSARY TO ESTABLISH THAT THE SAI D DEBT HAD BECOME BAD. THE FACT THAT THE ASSESSEE HAS WRITTEN OFF THE AMOU NT OF DEBT IN ITS ACCOUNT BOOKS, HAS NOT BEEN DOUBTED BY THE REVENUE. IN THE SE FACTS, FOLLOWING THE ITA NO.541/AHD/2006 -3- DECISIONS OF THE HONBLE APEX COURT AND HONBLE JUR ISDICTIONAL HIGH COURT, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSE E, AND THE ORDER OF THE CIT(A) IS CONFIRMED, AND THE GROUND OF THE APPEAL O F THE REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD