ACIT, New Delhi V. M/s. Manjula International, New Delhi

ITA 653/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65632 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 04-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: E NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, A.M. AND SHRI RAJPAL YADAV, J.M. ITA NO: 653/DEL/2012 ASSESSMENT YEAR : - 2007-08 ACIT, CIRCLE 22 (1) VS. M/S MANJULA INTERNATIONAL NEW DELHI Z 45, OKHLA INDUSTRILA AREAI PHASE II, NEW DELHI 110 020 PAN: : AAEFM 6006C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SK JAIN, SR.D.R. RESPONDENT BY : NONE O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF THE LD.CIT(A)-XII, NEW DELHI DATED 28.11.2011 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGE D IN THE BUSINESS OF MANUFACTURING AND EXPORT OF GARMENTS. DURING TH E YEAR UNDER CONSIDERATION, IT FILED ITS RETURN OF INCOME DECLA RING LOSS OF RS.15,69,595/-. THE ASSESSING OFFICER PASSED AN OR DER DETERMINING THE INCOME AT RS.1,25,306/-. THE ISSUE THAT ARISES FOR OUR CONSIDERATION IS THE DELETION OF AN ADDITION MADE BY THE ASSESSING O FFICER ON ACCOUNT OF THE ASSESSEES CLAIM THAT AN AMOUNT OF RS.13,54,284 /- RECOVERABLE FROM AEPC IS BAD DEBT AND IS ALLOWABLE AS BUSINESS EXPEN DITURE. I TA NO: 653/DEL/2012 PAGE 2 OF 4 ASSESSMENT YEAR 2007-08 MANJULA INTERNATIONAL, N.DELHI 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE ISSUANCE OF NOTICE. THERE IS NO PETITION FOR ADJOURNMENT EITHE R. UNDER THE CIRCUMSTANCES WE DISPOSE OFF THIS APPEAL QUA THE AS SESSEE, AFTER HEARING SHRI SK JAIN, LD.SR.D.R. 4. THE ASSESSEE, FOR THE PURPOSE OF HIS BUSINESS OF EXPORT, WAS REQUIRED TO OBTAIN FROM APPAREL EXPORT PROMOTION CO UNCIL (AEPC), A GOVERNMENT OF INDIA ENTERPRISE, A QUOTA. FOR THIS PURPOSE OF OBTAINING A QUOTA, THE ASSESSEE HAD TO MAKE A DEPOSIT WITH AEPC . IN CASE THE ASSESSEE WAS NOT IN A POSITION TO FULLY UTILIZE THE EXPORT QUOTA ALLOTTED TO IT, AEPC, WOULD FORFEIT THE DEPOSIT. THE ASSESSEE HAD AN OPENING BALANCE OF DEPOSITS WITH AEPC AS ON 1 ST APRIL,2006 AMOUNTING TO RS.13,54,284/-. THE ASSESSEE HAD WRITTEN OFF THE SAME ON THE GROUND THAT THE SAME IS IRRECOVERABLE. THE ASSESSING OFFICER DISALLOWED ON THE GROUND THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS IN THE FORM OF DOCUMENTARY EVIDENCE AND ALSO ON THE GROUND THAT THE BAD DEBTS RELATED TO EARLIER YEAR. THE FIRST APPELLATE AUTHORITY ALLOWED THE CL AIM OF THE ASSESSEE BY APPLYING JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD. VS CIT 35 DTR 156 (SC). WE FIND NO INFIRMITY IN TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) FOR TWO REASON S. THE AO AT PARA 5 ADMITS THAT THE ASSESSEE HAS PRODUCED A LETTER FR OM AEPC, EVIDENCING FORFEITURE OF THE DEPOSIT. IN FACT LETTERS DT. 8. 4.2002, ORDER DT. 3.4.2002, FINAL SETTLEMENT NOTICE LETTER DT. 9.8.2002 AND SHO W CAUSE NOTICE LETTER I TA NO: 653/DEL/2012 PAGE 3 OF 4 ASSESSMENT YEAR 2007-08 MANJULA INTERNATIONAL, N.DELHI DT. 4.1.2005 WERE PRODUCED. THE HONBLE SUPREME CO URT IN THE CASE OF TRF LTD. HELD THAT BAD DEBT SHOULD BE ALLOWED IN TH E YEAR OF WRITE OFF, AFTER THE AMENDMENT TO THE INCOME TAX ACT, 1961. I N VIEW OF THE ABOVE DISCUSSION, WE DISMISS THIS APPEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER,2012. SD/- SD/- (RAJPAL YADAV) (J.SU DHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 12 TH OCTOBER, 2012 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR I TA NO: 653/DEL/2012 PAGE 4 OF 4 ASSESSMENT YEAR 2007-08 MANJULA INTERNATIONAL, N.DELHI 1. DATE OF DICTATION: 04.10.2012 2. DRAFT PLACED BEFORE THE AUTHOR ON: 08.10.2012 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON: