M/s. First Leasing Company of India Ltd., CHENNAI V. DCIT, CHENNAI

ITA 63/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64540 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 13-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: V BALASUBRAMANYAN
• Keywords: Recovery proceedings; Reasonable cause; Bad and doubtful debts
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 63/MDS/2011 (ASSESSMENT YEAR : 2006-07) M/S FIRST LEASING COMPANY OF INDIA LTD., NO.749, ANNA SALAI, CHENNAI - 600 002. PAN : AAACF1162F (APPELLANT) V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(1), CHENNAI - 600 034 . (RESPONDENT) APPELLANT BY :SHRI V. BALASUBRAMANYAN, CA RESPONDENT BY :SHRI ANIRUDH RAI, CIT-DR DATE OF HEARING : 08.11.2012 DATE OF PRONOUNCEMENT : 08.11.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THIS IS AN APPEAL REMITTED BACK BY HONBLE JURISD ICTIONAL HIGH COURT TO THIS TRIBUNAL FOR DISPOSAL AFRESH, AFTER C ONSIDERING THE DECISION OF HONBLE APEX COURT IN THE CASE OF T.R.F . LIMITED V. CIT (323 ITR 397) AND IN ACCORDANCE WITH LAW. I.T.A. NO. 63/MDS/11 2 2. FACTS APROPOS ARE THAT ASSESSEE, ENGAGED IN THE BUSINESS OF HIRE PURCHASE AND LEASING, HAD FILED ITS RETURN FOR THE IMPUGNED ASSESSMENT YEAR DECLARING AN INCOME OF ` 7,35,73,950/-. ASSESSMENT WAS FINALLY COMPLETED UNDER SECTION 143( 3) OF INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') DETERMINING THE TOTAL INCOME OF ` 8,68,26,700/-. THERE WAS A BAD DEBT CLAIM OF ` 8,46,14,046/- BY THE ASSESSEE, OUT OF WHICH, ` 7,39,52,514/- PERTAINED TO LEASE AMOUNT DUE FROM M/S MADHYA PRADESH STATE TRANSPORT CORPORA TION (MPSTC). THE ASPECT OF CLAIM OF BAD DEBT AND ALLOW ANCE THEREOF WAS NOT DISCUSSED IN THE ORIGINAL ASSESSMENT ORDER DATED 31.12.2008, NEITHER WAS THERE ANY DISALLOWANCE FOR THIS. THEREAFTER, CIT INVOKING PROVISIONS OF SECTION 263 OF THE ACT, ISSUED NOTICE TO THE ASSESSEE. AS PER THE CIT, M/S MPSTC WAS A GOVERNME NT COMPANY AND ASSESSING OFFICER OUGHT NOT HAVE ALLOWED THE CL AIM OF BAD DEBT IN VIEW OF THE DECISION OF HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF M/S SOUTH INDIA SURGICAL COMPANY LTD. V. CIT (28 7 ITR 62). REPLY OF THE ASSESSEE WAS THAT THE LATTER DECISION WAS NO T APPLICABLE ON FACTS. AS PER THE ASSESSEE, IT WAS NOT STATE AS SU CH, BUT ONLY A GOVERNMENT CORPORATION CARRYING ON COMMERCIAL ACTIV ITY AND WRITE-OFF WAS EFFECTED, SINCE DESPITE SINCERE EFFORTS, RECOVE RY OF THE AMOUNT I.T.A. NO. 63/MDS/11 3 HAD BECOME VERY DIFFICULT. AS PER THE ASSESSEE, TH E TRANSACTIONS WERE BETWEEN TWO COMMERCIAL CORPORATIONS AND THERE WAS NO GOVERNMENT GUARANTEE FOR THE AMOUNTS DUE FROM M/S M PSTC. HOWEVER, CIT WAS NOT IMPRESSED. ACCORDING TO HIM, GOVERNMENT OF MADHYA PRADESH HAD AGREED TO PAY THE DUES TO THE AS SESSEE IN INSTALMENTS AND THEREFORE, ASSESSEE DID NOT HAVE AN Y REASONABLE CAUSE FOR WRITING OFF THE AMOUNTS AS BAD DEBT. REL IANCE WAS ALSO PLACED ON THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN THE CASE OF M/S SOUTH INDIA SURGICAL COMPANY LTD. (SUPRA). HE, THEREFORE, SET ASIDE THE ORDER OF ASSESSING OFFICER AND DIRECTED H IM TO PASS A FRESH ASSESSMENT ORDER AFTER GIVING OPPORTUNITY TO THE AS SESSEE. 3. ASSESSEES APPEAL BEFORE THIS TRIBUNAL DID NOT M EET WITH ANY SUCCESS. AS PER THIS TRIBUNAL, THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S SOUTH INDIA SURGICAL COMPANY LTD. (SUPRA) WAS APPLICABLE AND ASSESSEE WAS INCAPABLE O F ESTABLISHING THAT M/S MPSTC WAS NOT CONTROLLED AND MANAGED BY GO VERNMENT OF MADHYA PRADESH. 4. ASSESSEE MOVED IN FURTHER APPEAL BEFORE THE HON BLE JURISDICTIONAL HIGH COURT. ARGUMENT OF THE ASSESSE E WAS THAT THE BAD I.T.A. NO. 63/MDS/11 4 DEBT WAS PROPERLY WRITTEN OFF IN THE BOOKS OF ACCOU NTS BASED ON COMMERCIAL CONSIDERATION AND IT WAS NOT OPEN FOR TH E TAX AUTHORITIES TO IGNORE CRUCIAL DECISIONS TAKEN BY THE ASSESSEE I N THE COURSE OF ITS BUSINESS. RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF T.R.F. LIMITED (SUPRA). HONB LE JURISDICTIONAL HIGH COURT, IN ITS JUDGMENT DATED 24.1.2012 IN TAX CASE (APPEAL) NO.363 OF 2011, HELD AT PARA 5 AS UNDER:- 5. HEARD THE LEARNED COUNSEL ON EITHER SIDE AND PER USED THE MATERIALS AVAILABLE ON RECORD. THE HONOURABLE APEX COURT IN THE CASE OF T.R.F. LTD. (CITED SUPRA) CONSIDERED THE SC OPE OF PROVISIONS OF SECTION 36(1)(VII) OF THE ACT AND HEL D THAT AFTER AMENDMENT IT IS NOT NECESSARY FOR ASSESSEE TO ESTAB LISH THAT DEBT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENO UGH IF BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN ACCOUNTS OF THE ASSESSEE. THE SUPREME COURT IN THE ABOVE CITED CASE IN PARAGRAPHS 4 AND 5, HELD AS FOLLOWS:- 4. THIS POSITION IN LAW IS WELL SETTLED. AFTER 01.04.1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRI TTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSE E. 5. HOWEVER, IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT EXAMINED WHETHER THE DEBT AS, IN FA CT, BEEN WRITTEN OFF IN THE ACCOUNTS OF THE ASSESSEE. WHEN BAD DEBT OCCURS, THE BAD DEBT ACCOUNT IS DEBITED AND THE CUSTOMERS ACCOUNT IS CREDITED, THU S, CLOSING THE ACCOUNT OF THE CUSTOMER. IN THE CASE O F COMPANIES, THE PROVISION IS DEDUCTED FROM SUNDRY DEBTORS. AS STATED ABOVE, THE ASSESSING OFFICER HA S I.T.A. NO. 63/MDS/11 5 NOT EXAMINED WHETHER, IN FACT, THE BAD DEBT OR PART THEREOF IS WRITTEN OFF IN THE ACCOUNTS OF THE ASSES SEE. THIS EXERCISE HAS NOT BEEN UNDERTAKEN BY THE ASSESSING OFFICER. HENCE, THE MATTER IS REMITTED T O THE ASSESSING OFFICER FOR DE NOVO CONSIDERATION OF THE ABOVEMENTIONED ASPECT ONLY AND THAT TOO ONLY TO THE EXTENT OF THE WRITE-OFF. THE SUPREME COURT AFTER CONSIDERING THE SCOPE OF TH E PROVISIONS, HELD THAT THE ONLY REQUIREMENT IS THAT THE BAD DEBT SHOULD BE WRITTEN OFF AS IRRECOVERABLE IN THE ACCOU NTS OF THE ASSESSEE. IN THE CASE ON HAND, THE CONTENTION OF T HE ASSESSEE IS THAT THE ASSESSING OFFICER ON EXAMINATION OF THE CA SE AND ON GOING THROUGH THE FACTS CAREFULLY HELD THAT THE CLA IM OF BAD DEBT IS JUSTIFIABLE IN LAW AS THE SAME IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS. EVEN IN THE REPLY TO THE SHOW CAUSE NOTICE, IT WAS BROUGHT TO THE NOTICE OF THE COMMISSIONER OF INCOME TAX ABOUT THE WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS. HOWEVER, THE TRIBUNAL IN ITS ORDER HAD STATED THAT THE ASSESSING OFFICER HAS NOT DISCUSSED ANYWHERE IN THE ORDER THAT THE ASSESS EE HAS WRITTEN OFF THE BAD DEBTS IN THEIR ACCOUNTS. FURTH ER, THE TRIBUNAL HELD THAT THE MADHYA PRADESH STATE ROAD TR ANSPORT CORPORATION LTD. WAS FULLY OWNED, CONTROLLED AND MA NAGED BY THE GOVERNMENT OF MADHYA PRADESH AND THEREFORE, IT CANN OT BE SAID THAT THE SAID AMOUNT WOULD BE WRITTEN OFF AS IRRECO VERABLE. THE TRIBUNAL FURTHER HELD THAT THE DECISION OF THIS COU RT JUDGMENT IN SOUTH INDIA SURGICAL CO. LTD., IS SQUARELY APPLICAB LE TO THE FACTS OF THE CASE AND REJECTED THE CONTENTION OF THE ASSE SSEE. THE APEX COURT JUDGMENT IN THE CASE OF T.R.F. LTD.S CA SE (CITED SUPRA) WAS RENDERED ON FEBRUARY 9, 2010 BUT THE SAM E WAS NOT BROUGHT TO THE NOTICE OF THE TRIBUNAL BY BOTH THE C OUNSEL. IN VIEW OF THE STATUTORY PROVISION AS WELL AS APEX COU RT JUDGMENT IN T.R.F. LIMITED VS. COMMISSIONER OF INCOME TAX, RANC HI (CITED SUPRA) AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL WITH A DIRECTION TO REHEAR THE MATTER AFRESH AFTER GIVING OPPORTUNITY TO BOTH PART IES TO SUBSTANTIATE THEIR CASE AND DECIDE THE MATTER IN TH E LIGHT OF APEX COURT JUDGMENT IN THE CASE OF T.R.F. LIMITED V S. I.T.A. NO. 63/MDS/11 6 COMMISSIONER OF INCOME TAX, RANCHI REPORTED IN (201 0) 13 SCC 532 = 323 ITR 397 (SC) AND IN ACCORDANCE WITH LAW. SUCH ORDERS SHALL BE PASSED AS EXPEDITIOUSLY AS POSSIBLE PREFER ABLY WITHIN A PERIOD OF THREE MONTHS FROM THE DATE OF RECEIPT OF A COPY OF THIS ORDER. WE DIRECT THE RESPONDENT NOT TO TAKE A NY RECOVERY PROCEEDINGS AGAINST THE ASSESSEE IN RESPECT OF TAX COLLECTION TILL THE MATTER WAS DISPOSED OF BY THE TRIBUNAL. IT IS ALSO MADE CLEAR THAT BOTH THE PARTIES SHALL NOT TAKE UNNECESSARY AD JOURNMENTS BUT TO COOPERATE FOR THE SPEEDY DISPOSAL OF THE CAS E. 5. ACCORDINGLY, THE MATTER ONCE AGAIN CAME BEFORE U S. LEARNED A.R. SUBMITTED THAT THESE DUES AROSE ON ACCOUNT OF LEASE OF 136 TRANSPORT BUSES TO M/S MPSRC. AS PER THE LEARNED A .R., THE SAID ARRANGEMENT WAS NOT BACKED BY ANY GOVERNMENT GUARAN TEE. M/S MPSTC HAD DEFAULTED IN PAYING THE LEASE RENTALS AND THE CHEQUES WERE RETURNED UNPAID. THE BUSES WERE ALSO RE-POSS ESSED IN THE YEAR 2005. BOARD OF DIRECTORS IN ITS COMMERCIAL WI SDOM WAS OF THE OPINION THAT THE AMOUNT DUE FROM M/S MPSTC WAS NOT RECOVERABLE AND HENCE EFFECTED A WRITE-OFF IN THE BOOKS. RELIA NCE WAS ONCE AGAIN PLACED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF T.R.F. LIMITED (SUPRA). 6. PER CONTRA, LEARNED D.R. SUBMITTED THAT THERE IS NO FINDING WHETHER ASSESSEE HAD ACTUALLY WRITTEN OFF THE BAD D EBT. EVEN IN THE CASE OF T.R.F. LIMITED (SUPRA), HONBLE APEX COURT HAD REMITTED THE MATTER BACK TO THE ASSESSING OFFICER FOR ASCERTAINI NG WHETHER ANY I.T.A. NO. 63/MDS/11 7 ACTUAL WRITE-OFF OF BAD DEBTS WERE THERE. HERE ALS O, ACCORDING TO HIM, THERE WAS NO FINDING BY THE ASSESSING OFFICER WHETH ER ASSESSEE HAD ACTUALLY MADE THE WRITE-OFF OF BAD DEBT. 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DOUBT THAT A SUM OF ` 7,39,52,514/- WAS DUE TO THE ASSESSEE FROM M/S MPSTC ON ACCOUNT OF LEASE OF BUSE S TO THEM. BUSINESS OF THE ASSESSEE WAS HIRE PURCHASE AND LEAS ING AND THIS HAS BEEN CLEARLY MENTIONED BY THE ASSESSING OFFICER ON THE FACING SHEET OF THE ASSESSMENT ORDER ITSELF. IN OUR OPINION, TH E QUESTION WHETHER ASSESSEE HAD ACTUALLY EFFECTED A WRITE-OFF OF THE L EASE AMOUNTS DUE FROM M/S MPSTC STANDS ANSWERED AT PARA 2 OF THE ORD ER OF CIT UNDER SECTION 263 OF THE ACT. THE SAID PARA IS REP RODUCED HEREUNDER:- 2. SUBSEQUENTLY IT WAS NOTICED THAT OUT OF THE BAD DEBTS WRITTEN OFF BY THE ASSESSEE TO THE EXTENT OF ` 8,46,14,046/- A SUM OF ` 7,39,52,514/- WAS A LEASE AMOUNT TO BE RECEIVED FR OM MADHYA PRADESH ROAD TRANSPORT CORPORATION LTD. THI S BEING A GOVT. COMPANY, THE ASSESSING OFFICER OUGHT NOT TO H AVE ALLOWED THE ASSESSEES CLAIM IN THIS REGARD IN THE LIGHT OF THE JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF M/S SOUTH INDIA SURGICAL COMPANY LTD. VS. CIT (287 ITR 62). THUS, TO THE EXTENT THE ASSESSING OFFICER DID NOT COMPLETE THE A SSESSMENT IN ACCORDANCE WITH THE JURISDICTIONAL HIGH COURTS DEC ISION, THE ASSESSMENT FRAMED BY HIM WAS CONSIDERED ERRONEOUS A ND I.T.A. NO. 63/MDS/11 8 PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGL Y, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE CALLING FOR ITS O BJECTIONS AS TO WHY THE PROVISIONS OF SEC.263 SHOULD NOT BE INVOKED IN THIS CASE. FIRST SENTENCE ITSELF CLEARLY MENTIONS THAT THE ASS ESSEE HAD WRITTEN OFF ` 8,46,14,046/-, OUT OF WHICH, ` 7,39,52,514/- WAS LEASE AMOUNTS DUE FROM M/S MPSTC. HENCE, IT IS AN ADMITTED POSITION THAT ASSESSEE HAD ACTUALLY WRITTEN OFF ` 7,39,52,514/- AS BAD DEBT IN ITS ACCOUNTS. CONDITIONS TO BE SATISFIED FOR WRITING OFF A BAD DE BT ARE SPECIFICALLY MENTIONED IN SECTION 36(1)(VII) AND SECTION 36(2) O F THE ACT. THE SAID PROVISIONS ARE REPRODUCED HEREUNDER:- 36(1)(VII) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), THE AMOUNT OF ANY BAD DEBT OR PART THEREOF WHICH IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR. [ PROVIDED THAT IN THE CASE OF AN ASSESSEE TO WHICH CLAUSE (VIIA) APPLIES, THE AMOUNT OF THE DEDUCTION RELATING TO ANY SUCH DEBT OR PART THEREOF SHALL BE LIMITED TO THE AMOUNT BY WHICH SUCH DEBT OR PART THEREOF EXCEEDS THE CREDIT BALANCE IN THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNTS MADE UNDER THAT CLAUSE.] [EXPLANATION FOR THE PURPOSES OF THIS CLAUSE, ANY BAD DEBT OR PART THEREOF WRITTEN OFF AS IRRECOVERAB LE IN THE ACCOUNTS OF THE ASSESSEE SHALL NOT INCLUDE A NY PROVISION FOR BAD AND DOUBTFUL DEBTS MADE IN THE ACCOUNTS OF THE ASSESSEE;] I.T.A. NO. 63/MDS/11 9 36(2) IN MAKING ANY DEDUCTION FOR A BAD DEBT OR PA RT THEREOF, THE FOLLOWING PROVISIONS SHALL APPLY- (I) NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOU S YEAR IN WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARLIER PREVIOUS YE AR, OR REPRESENTS MONEY LENT IN THE ORDINARY COURSE OF THE BUSINESS OF BANKING OR MONEY-LENDING WHICH IS CARRIED ON BY THE ASSESSEE; 8. AS ALREADY MENTIONED BY US, IT IS AN ADMITTED PO SITION THAT ASSESSEE HAD WRITTEN OFF THE AMOUNTS DUE AS BAD DEB T IN ITS ACCOUNTS. THE ONLY QUESTION THAT REMAINS IS WHETHE R LEASE AMOUNTS WERE TAKEN INTO ACCOUNT WHILE COMPUTING INCOME OF T HE ASSESSEE IN THE EARLIER YEARS. THERE IS NO FINDING BY ANY LOWER AUTHORITIES THAT LEASE AMOUNTS WERE NOT A PART OF THE INCOME OF THE ASSESSEE FOR THE RELEVANT PREVIOUS YEAR OR ANY EARLIER YEAR. ASSESS EE WAS ADMITTEDLY CARRYING ON THE BUSINESS OF HIRE PURCHASE AND LEASI NG AND THIS BUSINESS IS MORE OR LESS ON PAR WITH A MONEY LENDIN G BUSINESS ALSO. IN SUCH A SITUATION, WE ARE OF THE OPINION THAT ASS ESSEE HAD SATISFIED BOTH THE CONDITIONS SET OUT FOR CLAIMING A WRITE-OF F OF BAD DEBT. HONBLE APEX COURT IN THE DECISION OF T.R.F. LIMITE D (SUPRA) HAS CLEARLY HELD AT PARA 4 OF ITS JUDGMENT, AS UNDER:- I.T.A. NO. 63/MDS/11 10 THIS POSITION IN LAW IS WELL-SETTLED. AFTER 1 ST APRIL, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT TH E DEBT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF TH E BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. HOWEVER, IN THE PRESENT CASE, THE A.O. HAS NOT EXAM INED WHETHER THE DEBT HAS, IN FACT, BEEN WRITTEN OFF IN ACCOUNTS OF THE ASSESSEE. WHEN BAD DEBT OCCURS, THE BAD DEBT ACCOU NT IS DEBITED AND THE CUSTOMERS ACCOUNT IS CREDITED, THU S, CLOSING THE ACCOUNT OF THE CUSTOMER. IN THE CASE OF COMPANIES, THE PROVISION IS DEDUCTED FROM SUNDRY DEBTORS. AS STATED ABOVE, THE A.O. HAS NOT EXAMINED WHETHER, IN FACT, THE BAD DEBT OR PART THEREOF IS WRITTEN OFF IN THE ACCOUNTS OF THE ASSESSEE. THIS EXERCISE HAS NOT BEEN UNDERTAKEN BY THE A.O. HENCE, THE MATTER IS REMITTED TO THE A.O. FOR DE NOVO CONSIDERATION OF THE ABOVE- MENTIONED ASPECT ONLY AND THAT TOO ONLY TO THE EXTENT OF THE WRITE OFF. 9. WE ARE, THEREFORE, OF THE OPINION THAT THERE IS NO ERROR IN THE ASSESSMENT ORDER FOR THE IMPUGNED ASSESSMENT YEAR W ARRANTING INVOCATION OF SECTION 263 OF THE ACT. NO DOUBT, NO THING WHATSOEVER HAS BEEN MENTIONED REGARDING THE BAD DEBT CLAIM OF THE ASSESSEE IN THE ASSESSMENT ORDER. BUT, NEVERTHELESS, FOR INVOC ATION OF SECTION 263 OF THE ACT, TWO CONDITIONS ARE TO BE SATISFIED, FIRST IS THAT THERE SHOULD BE AN ERROR IN THE ORDER AND SECOND IS THAT SUCH ERROR SHOULD PREJUDICIAL TO THE INTERESTS OF REVENUE. WE ARE OF THE OPINION THAT THERE WAS NO SUCH ERROR WHATSOEVER IN THE ORDER OF THE ASSESSING OFFICER WHICH, BY IMPLICATION, ALLOWED THE CLAIM OF THE ASSESSEE ON ITS BAD DEBT. WE ARE OF THE OPINION THAT THIS WAS NOT A CASE WHERE I.T.A. NO. 63/MDS/11 11 INVOCATION OF SECTION 263 WAS CALLED FOR. ORDER PA SSED UNDER SECTION 263 OF THE ACT BY CIT IS QUASHED. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON THURSDAY, THE 8 TH OF NOVEMBER, 2012, AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 8 TH NOVEMBER, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT, CHENNAI-I, CHENNAI (4) D.R. (5) GUARD FILE