ITO, Ward - 12(1), Kolkata, Kolkata V. M/s. R.V. Investment & Dealers Ltd., Kolkata

ITA 640/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74998 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 01-04-2010
• Court: TRIBUNAL
• Department Lawyers: K K DAS
• Assessee Lawyers: S JHAJHARIA
• Keywords: Bad and doubtful debts

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , . . . . ! ! ! ! /AND '' # $ % '' # $ % '' # $ % '' # $ % , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI GEORGE MATHAN, JM] !& !& !& !& / I.T.A NO. 640/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, WARD-12(1), KOLKATA. VS. M/S. R. V. INVESTMENT & DEALERS LTD. (PAN:AABCR4000P) (%, /APPELLANT ) (-.%,/ RESPONDENT ) DATE OF HEARING: 15.01.2014 DATE OF PRONOUNCEMENT: 31.01.2014 FOR THE APPELLANT: SHRI K. K. DAS, JCIT, SR. DR FOR THE RESPONDENT: SHRI S. JHAJHARIA / ORDER PER SHRI P. K. BANSAL, AM: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A)-XXXII, KOLKATA DATED 25.11.2009 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD. CIT(A) HAS ERRED IN ALLOWING THE BAD DEBT OF RS.13,14,271/- DESPITE THE FACT THA T THE ASSESSEE HAS FAILED TO PROVIDE THE REQUISITE SPECIFIC DETAILS AS TO WHICH YEAR THE DEBT OR PART OF THE DEBT HAD BEEN TAKEN IN THE COMPUTATION OF INCOME. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS CORRECT IN HOLDING THAT THE LOSS OF RS.2,50,663/- IS ALLOWA BLE DESPITE THE FACT THAT NO EVIDENCE COULD BE FILED BY THE ASSESSEE IN SUPPORT OF SUCH L OSS. 2. GROUND NO. 1 RELATES TO THE DELETION OF ADDITION IN RESPECT TO THE BAD DEBTS AMOUNTING TO RS.13,14,271/-. THIS ISSUE IS NO MORE RES INTEGRA IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TRF LTD. VS. CIT (2010) 323 IT R 397 (SC). AS THE ASSESSEE HAS DULY WRITTEN OF BAD DEBTS IN THE BOOKS OF ACCOUNT, WE, T HEREFORE, DISMISS THE GROUND TAKEN BY THE REVENUE. 3. THE GROUND NO. 2 RELATES TO THE DELETION OF DISA LLOWANCE IN RESPECT OF LOSS OF RS.2,50,263/- ON ACCOUNT OF SALE OF THE DISCARDED S TORE ITEMS. THE AO WHILE DISALLOWING THIS 2 ITA NO.640/K/2010 M/S. R. V. INVESTMENT & DEALERS LTD. , AY:2004-05 LOSS MENTIONED THAT THE ASSESSEE WAS ASKED FOR THE EVIDENCE BUT THE SAME WAS NOT FURNISHED. WHEN THE MATTER WENT TO CIT(A), WHO DELETED THE DIS ALLOWANCE BY OBSERVING AS UNDER: 6.5. THE TIME BARRING ASSESSMENT WAS COMPLETED ON 29.12.2006 AND THE CLAIM WAS DISALLOWED BY THE A.O. FOR THE ALLEGED LACK OF DETA ILS WHICH WAS NOT CORRECT. THE DISALLOWANCE WAS MADE WITHOUT PRIMARILY CONSIDERING THE BELATED REQUISITION MADE BY HIM AND SECONDLY WITHOUT CONSIDERING THE ASSESSEES EXPLANATION SUPPORTED BY A CHART AND THE FACTS ON RECORD. THE STORE ITEMS WHICH WER E TRADING ASSETS LYING AT ITS TEXTILE MILL AT AHMEDABAD WERE NOT USED SINCE CLOSURE OF TH E MILL IN MARCH, 2002. DUE TO THEIR NON-USER FOR A PROLONGED PERIOD, THOSE UNUSED , DISCARDED STORE ITEMS WERE ULTIMATELY SOLD TO DIFFERENT PARTIES AS PER THE CHA RT FILED. ON SALE THERE WAS PROFIT IN SOME CASES AND LOSS IN OTHER CASES. THE NET LOSS O F RS.2,50,664/- SUFFERED AFTER ADJUSTMENT OF THE PROFIT (GROSS LOSS RS.2,77,846/- LESS PROFIT RS.27,182/-) WAS DEBITED TO P & L A/C AND CLAIMED AS DEDUCTION AS A TRADING LOSS. THE FACTS OF SALE OF THE DISCARDED STORE ITMS YIELDING PROFIT HAS BEEN ACCE PTED BY THE AO, WHEREAS THE LOSS SUFFERED IN A FEW CSASS ON SALE OF SUCH ITEMS WAS N OT ACCEPTED BY HIM WHICH DOES NOT APPEAR JUSTIFIED. MOREOVER, THE AO HAS DISALLOWED THE NET LOSS OF RS.2,50,664/- WHICH MEANS THAT HE HAS UNDISPUTABLY ACCEPTED A PART OF T HE GROSS LOSS OF RS.2,77,846/-. IN THAT SITUATION THERE WAS NO GENUINE CAUSE OF NOT AC CEPTING THE BALANCE LOSS WHEN IT IS AN UNDISPUTED FACT THAT THE GOODS SOLD WERE TOTALLY DISCARDED BEING NOT FIT FOR USE AND IN ALL LIKELIHOOD SALE OF SUCH SCRAP GOODS IN THE M ARKET MAY NOT RESULT IN PROFIT. THE DISALLOWANCE MADE BY THE AO MERELY ON ASSUMPTION AN D PRESUMPTION WITHOUT ANY BASIS CANNOT BE HELD TO BE JUSTIFIED. THE DISALLOW ANCE OF NET LOSS OF RS.2,50,664/- IS THEREFORE DELETED AND THIS GROUND OF APPEAL IS ALLO WED. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY CO NSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE ALONG WITH THE ORDERS OF THE TAXING AUT HORITIES BELOW. IN OUR OPINION, NO INTRFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). CIT(A) H AS GIVEN A FINDING OF FACT WHICH HAS NOT BEEN DISPUTED BY THE LD. DR. EVEN NO CONTRARY EVIDENCE OR COGENT MATERIAL WAS BROUGHT TO OUR KNOWLEDGE OR FILED BEFORE US, WHICH MAY WARRANT OUR INTERFERENCE IN THE ORDER OF THE CIT(A) ON THIS ISSUE. WE, THEREFORE, DISMISS THE GROUND OF A PPEAL OF REVENUE. 5. IN THE RESULT, APPEAL OF REVENUE STANDS DISMISSE D. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.01.2 014 SD/- SD/- '' # $ % '' # $ % '' # $ % '' # $ % , , . . . . , (GEORGE MATHAN) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31ST JANUARY, 2014 PRONOUNCED BY SD/- (A.P.GEORGE) SD/- (G.MATHAN) AM JM /0 '1' '2 JD.(SR.P.S.) 3 ITA NO.640/K/2010 M/S. R. V. INVESTMENT & DEALERS LTD. , AY:2004-05 3 -''4 54)6- COPY OF THE ORDER FORWARDED TO: 1 . %, / APPELLANT ITO, WARD-12(1), KOLKATA 2 -.%, / RESPONDENT M/S. R. V. INVESTMENT & DEALERS LTD. , KCI PLAZA, 7 TH FLOOR, 23C, ASHUTOSH CHOWDHURY AVENUE, KOLKATA-700 064. 3 . ' ( )/ THE CIT(A), KOLKATA 4. 5. ' / CIT KOLKATA 4;'< -' / DR, KOLKATA BENCHES, KOLKATA .4 -'/ TRUE COPY, =/ BY ORDER, > !' /ASSTT. REGISTRAR .