PRANIK SHIPPING & SERVICES LTD, MUMBAI V. DCIT 5(2), MUMBAI

ITA 6494/MUM/2009

• Counselvise Citation: 649419914 RSA 2009
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 18-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Assessee Lawyers: JIT ENDRA B SANGHVI
• Section: 5(2); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI R.S.PADVEKAR, JM ITA NO. 6494/MUM/2009 : ASST. YEAR 2006-2007 M/S.PRANIK SHIPPING & SERVICES LIMITED 114 MAKER CHAMBERS VI 220 NARIMAN POINT, MUMBAI 400 021. PAN : AAACP2033R. THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 5(2) MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : S/SHRI JITENDRA B.SANGHVI & AMIT KHA TIWALA RESPONDENT BY : SHRI A.C.TEJPAL, CIT-DR DATE OF HEARING : 18.01.2012 DATE OF PRONOUNCEMENT : 25.01.2012 O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 25.11.2009 IN RELATION TO THE ASSESSMENT YEAR 2006-2007. 2. GROUND NOS.1 AND 2 ABOUT THE CONFIRMATION OF DIS ALLOWANCE OF INTEREST U/S 36(1)(III) AND CONFIRMATION OF DISALLOWANCE OF ACCR UED INTEREST AMOUNTING TO ` 3,76,86,000 PAYABLE TO M/S SAHARA INDIA FINANCIAL C ORPORATION LIMITED U/S 40(A)(IA) ARE ADMITTEDLY SIMILAR TO THOSE OF ASSESS MENT YEAR 2005-2006, WHICH WAS SIMULTANEOUSLY ARGUED BY BOTH THE SIDES. IN FAC T NO SEPARATE ARGUMENT WAS ADVANCED BY EITHER PARTY ON THESE TWO GROUNDS DISTI NCTLY. IN VIEW OF THE COMMON SUBMISSION THAT THE FACTS AND CIRCUMSTANCES OF BOTH THE GROUNDS IN THIS YEAR ARE SIMILAR TO THOSE OF ASSESSMENT YEAR 2005-2 006, WHICH HAS BEEN SEPARATELY CONSIDERED AND DECIDED BY US IN ITA NO.5 962/MUM/2009, FOLLOWING THE VIEW TAKEN BY US IN THE IMMEDIATELY PRECEDING Y EAR, WE ALLOW THESE TWO GROUNDS OF APPEAL. 3. LAST EFFECTIVE GROUND IS AGAINST THE CONFIRMATIO N OF DISALLOWANCE IN RESPECT OF AMOUNT WRITTEN OFF AMOUNTING TO ` 41,47,852. THE FACTS APROPOS THIS ITA NO. 6494/MUM/2009 M/S.PRANIK SHIPPING & SERVICES LIMITED. 2 GROUND ARE THAT THE ASSESSEE DEBITED ITS PROFIT AND LOSS ACCOUNT WITH A SUM OF ` 41.47 LAKH DETAILED AS UNDER:- ADVANCES CONSIDERED GOODS ` 16,728 DEPOSIT (ASSETS) ` 6,04,624 LOAN TO OTHERS ` 27,35,000 SUNDRY DEBTORS ` 50,000 ADVANCES RECOVERABLE IN CASH OR KIND ` 7,41,500 ------------- TOTAL ` 41,47,852 ======== 4. THE A.O. OBSERVED THAT THE AFORE-SAID BALANCES W RITTEN OFF WERE NOT IN THE NATURE OF INCOME IN EARLIER YEARS. HE FURTHER REFUS ED TO ACCEPT THE LOAN AS BUSINESS LOSS. HE, THEREFORE, MADE ADDITION OF ` 41.47 LAKH. IN THE FIRST APPEAL THE LEARNED CIT(A) UPHELD THE ADDITION. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS OBSERVED THAT THE ABOVE AM OUNT TOTALING ` 41.47 LAKH CLAIMED AS DEDUCTION BY THE ASSESSEE IN THE INSTANT YEAR WAS NEVER OFFERED FOR TAXATION IN THE EARLIER YEARS. FURTHER SUCH AMOUNTS WRITTEN OFF ARE NOT IN THE NATURE OF TRADE ADVANCES SO AS TO BE ELIGIBLE AS BU SINESS LOSS. IN OUR CONSIDERED OPINION THE IMPUGNED ORDER CANNOT BE DISTURBED IN N OT GRANTING DEDUCTION FOR SUCH AMOUNT WRITTEN OFF BY THE ASSESSEE. WE, THEREF ORE, UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. THIS GROUND IS NOT ALLOWED. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 25 TH DAY OF JANUARY, 2012. SD/- SD/- (R.S.PADVEKAR) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 25 TH JANUARY, 2012. DEVDAS* ITA NO. 6494/MUM/2009 M/S.PRANIK SHIPPING & SERVICES LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A)-IX, MUMBAI 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.