PHARMALAB OVERSEAS MARKETING AGENCY, MUMBAI V. JT CIT 23(1), MUMBAI

ITA 5526/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88206 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 27-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J PREMANAND
• Keywords: Business income; Additional evidence; Bad and doubtful debts

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BE NCH, MUMBAI , !' #$%& , '' ' ( BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO. 5526/MUM/2011 ( ! ! ! ! ) ) ) ) / ASSESSMENT YEAR : 2005-06 PHARMALAB OVERSEAS MARKETING AGENCY, KASTURI, 3 RD FLOOR, SANGHVI ESTATE, STATION ROAD, GOVANDI (E), MUMBAI-400 088 ! ! ! ! / VS. THE JCIT 23(1), PRATYAKSHAKAR BHAVAN, C/12 BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400 051 * '' ./ + ./ PAN/GIR NO. : AAAFP 1206F ( *, / APPELLANT ) .. ( -.*, / RESPONDENT ) *, / ' / APPELLANT BY: SHRI K. GOPAL -.*, 0 / ' / RESPONDENT BY: SHRI J.PREMANAND ! 0 12' / DATE OF HEARING :28.01.2015 3) 0 12' / DATE OF PRONOUNCEMENT :28.01.2015 '4 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE LD. CIT(A)-33, MUMBAI DT. 9.06.2011 PERTAINING TO A SSESSMENT YEAR 2005-06. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 16 LAKHS CLAIMED BY THE ASSESSEE AS BAD DEBTS. ITA NO. 5526/M/2011 2 3. THE ASSESSEE IS A MERCHANT EXPORTER OF PHARMACEU TICAL & ALLIED MACHINERIES AND SPARES. WHILE SCRUTINIZING THE RET URN OF INCOME AND THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OF FICER OBSERVED THAT THE ASSESSEE HAS CLAIMED RS. 16 LAKHS AS BAD DEBTS, THE SAID AMOUNT REPRESENTED LOAN TO M/S. GOOD EARTH INDUSTRIES LTD. THE ASSESSEE WAS ASKED TO EXPLAIN AND JUSTIFY ITS CLAIM OF BAD DEBTS . THE ASSESSEE FILED A DETAILED REPLY CLAIMING THAT THE SAID LOAN WAS GIVE N TO M/S. GOOD EARTH INDUSTRIES LTD., IN THE PAST. THE INTEREST EARNED FROM THE SAID LOAN WAS OFFERED UNDER THE HEAD BUSINESS INCOME. IT WAS F URTHER EXPLAINED THAT THE ASSESSEE HAS BEEN GIVING LOANS TO OTHER PARTIES ALSO FOR EARNING THE INTEREST INCOME, IT MAY BE CONSIDERED AS ENGAGED IN BUSINESS OF LENDING MONEY AND THEREFORE THE CLAIM OF BAD DEBT SHOULD BE ALLOWED. THIS EXPLANATION OF THE ASSESSEE WAS REJECTED BY THE AO WHO WAS OF THE OPINION THAT THE ASSESSEE IS NOT ENGAGED IN THE BUS INESS OF MONEY LENDING NOR IT HAS ANY PERMISSION FROM APPROPRIATE AUTHORIT IES. THE AO DISALLOWED RS. 16 LAKHS. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REIT ERATED HIS CLAIM. THE LD. COUNSEL DREW OUR ATTENTION TO THE ADDITIONA L EVIDENCES FILED BEFORE US WHICH IS A COPY OF SUIT FOR RECOVERY OF L OAN ALONGWITH CERTAIN RELATED DOCUMENTS. 6. THE LD. DEPARTMENTAL REPRESENTATIVE STATED THAT SINCE THE ADDITIONAL EVIDENCES HAVE BEEN FILED, THE REVENUE S HOULD GET AN OPPORTUNITY TO EXAMINE THESE DOCUMENTS. ITA NO. 5526/M/2011 3 7. WE FIND FORCE IN THE CONTENTION OF THE LD. DR. A DMITTING THE ADDITIONAL EVIDENCES, WE RESTORE THE ISSUE TO THE F ILE OF THE AO. THE ASSESSEE IS DIRECTED TO FILE THESE EVIDENCES/DOCUME NTS BEFORE THE AO. THE AO IS DIRECTED TO EXAMINE AND VERIFY THE DOCUME NTS AND DECIDE THE ISSUE AFRESH AS PER PROVISIONS OF THE LAW. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 28 TH JANUARY, 2015. SD/- SD/- (JOGINDER SINGH ) (N.K. BILLAIYA) /JUDICIAL MEMBER '' / ACCOUNTANT MEMBER MUMBAI; 5! DATED : 28 TH JANUARY, 2015 . ! . ./ RJ , SR. PS