DY.C.I.T-3(2), MUMBAI V. M/S. IDBI TRUSTEESHIP SERVICES LTD., MUMBAI

ITA 6682/MUM/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78654 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 07-04-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 19-11-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: RAVI MULCHANDANI
• Keywords: Business expenditure; Rule of consistency; Bad and doubtful debts

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE S/SHRI I.P. BANSAL, (JM) AND RAJENDRA (AM) . . , , ./I.T.A. NO.6682/MUM/2008 ( / ASSESSMENT YEAR : 2004-05) DY. COMMISSIONER OF INCOME TAX 3(2), ROOM NO.608, 6 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020. / VS. M/S IDBI TRUSTEESHIP SERVICES LTD, ASIAN BUILDING, GROUND FLOOR, 17 TH R KAMANI MARG, BALLARD ESTATE, MUMBAI-400001 ( $ / APPELLANT) .. ( %&$ / RESPONDENT) ./ ./PAN/GIR NO. : AAACI8912J $ / APPELLANT BY : SHRI ASHOK SURI %&$ ) /RESPONDENT BY : SHRI RAVI MULCHAN DANI ) , / DATE OF HEARING : 7.4.2014 ) , /DATE OF PRONOUNCEMENT : 7.4.2014 / O R D E R PER I.P.BANSAL, JM: THIS APPEAL IS FILED BY THE REVENUE. IT IS DIRECT ED AGAINST ORDER PASSED BY LD. CIT(A) DATED 4.9.2008 FOR ASSESSMENT YEAR 2004-05. 2. GROUNDS OF APPEAL TAKEN BY REVENUE READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE SYSTEM OF ACCO UNTING CHANGED BY THE ASSESSEE IS BONAFIDE WITHOUT APPRECIATING THAT TWO SYSTEM OF ACCOUNTING I.E. MERCANTILE AND CASH CANNOT BE FOLLOWED FOR RECEIPT/ EXPENSES UNDER THE SAME HEAD 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT AMOUNT OF RS.37,46, 609/- IS ALLOWABLE AS BUSINESS EXPENDITURE. I.T.A. NO.6682/MUM/2008 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT AMOUNT OF RS.9,16,628 /- IS ALLOWABLE AS BUSINESS EXPENDITURE; 4. THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED 3. ASSESSEE IS A COMPANY PROMOTED BY IDBI, LIC, GI C AND IFCI. INITIALLY, THE IMPUGNED APPEAL FILED BY REVENUE WAS DISMISSED BY THIS TRIBUNAL VIDE ITS ORDER DATED 11.1.2010 ON THE GROUND THAT COD DID NOT PERM IT PURSUATION OF THE PRESENT APPEAL. HOWEVER, LATER ON, THE SAID ORDER DATED 11 .1.2010 WAS RECALLED ON THE MISCELLANEOUS APPLICATION FILED BY REVENUE VIDE IT S ORDER DATED 27.7.2012 IN MISC. APPLICATION NO.49/MUM/2012. IT IS IN THIS MANNER, THE IMPUGNED APPEAL HAS COME UP FOR HEARING. 4. APROPOS GROUND NOS.1 AND 2, IT WAS NOTED BY THE AO THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT FOLLOWING REMARKS WERE MADE BY THE AUDITORS IN PARA 11(A) WHICH READ AS FOLLOW: 'THE ACCOUNTS ARE PREPARED ON ACCRUAL BASIS OF ACCO UNTING. THE INCOME DERIVES FROM ACCEPTANCE FEES, DUE DILIGENCE FEES AND DOCUME NTATION CHARGES ARE RECOGNIZED WHEN THE PAYMENT RECEIVED BY THE COMPANY . SERVICE CHARGES ARE ACCOUNTED FOR ON ACCRUAL BASIS. DURING THE PREVIOUS YEAR 2003-04, THE COMPANY HAS CHANGED ITS ACCOUNTING POLICY FOR RECOGNIZING I NCOME FROM SERVICE CHARGES AS UNDER: I WHERE THE RECOVERY OF SERVICE CHARGES IS REGULAR ON ACCRUAL BASIS II WHERE THE RECOVERY OF DUES IS IRREGULAR - THE RECOVERY OF DUES WOULD BE DEEMED TO BE IRREGULAR WHERE THE COMPANY IS IN DEFAULT IN PAYMENT OF DUES FOR A PERIOD OF LAST SIX MONTHS AND THE PAYMENT IS NOT RECEIVED, IN FULL EVEN AFTER A GRACE PERIOD OF 30 DAYS AFTER EXPIRY OF SAID PERIOD OF SIX MONTHS. TO BE WRITTEN OFF IN THE BOOKS OF ACCOUNTS ON EXPIRY OF GRACE PERIOD. INCOME TO BE RECOGNIZED ON ACTUAL BASIS. DUE TO CHANGE IN ACCOUNTING POLICY DURING THE YEAR REGARDING REVENUE RECOGNITION IN RESPECT OF IRREGULAR ACCOUNTS, SERVI CE CHARGES AMOUNTING TO RS. 37,46,609/- HAVE BEEN WRITTEN OFF. HENCE PROFIT FOR THE YEAR HAS BEEN LOWER TO THE EXTENT OF RS. 37,46,609/- '. I.T.A. NO.6682/MUM/2008 3 5. THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY ON THE ABOVE NOTE OF AUDITORS AN ADDITION OF RS.37,46,609/- SHOULD NOT BE MADE. VIDE LETTER DATED 18.8.2006, THE ASSESSEE EXPLAINED THAT AS A PART OF ITS FIDUCIARY ROLE THE ASSESSEE COMPANY IS ALSO HANDLING ASSIGNMENTS IN RESPECT OF BIFR/SUIT FILED /DEFAULTING CASES WHICH HAVE DEFAULTED IN PAYMENT OF DEBENTURE HOLDERS DUES AS ALSO SERVICE CHARGES PAYABLE TO ASSESSEE. THUS, IT WAS SUBMITTED THAT THE CHANCES OF RECOVERY OF SERVICE CHARGES IN RESPECT OF SUCH CASES WERE BLEAK. TO HAVE UNIFOR MITY OF APPROACH, THE ASSESSEE HAS ITSELF DECIDED TO WRITE OFF THE SERVICE CHARGES IN CASE THE SAME ARE NOT RECOVERED FOR A PERIOD OF 210 DAYS (INCLUDING GRACE PERIOD OF THIRT Y DAYS). THE RECOVERY OF SERVICE CHARGES IN ALL SUCH CASES IS RECOGNIZED AS INCOME ON ACTUAL RECEIPT BASIS AND TAX IS PAID ACCORDINGLY. IT WAS FURTHER SUBMITTED THAT WHENEVE R SUCH ACCOUNT BECOME REGULAR , THE CASES ARE BEING UPGRADED AND INCOME IN SUCH CASES I S AGAIN RECOGNIZED ON ACCRUAL BASIS. THUS, IT WAS SUBMITTED THAT CHANGE IN TH E METHOD OF ACCOUNTING HAS BEEN BROUGHT FOR THE REASONS AFORESAID AND IT WAS DESC RIBED AS FOLLOWS TO SHOW THAT HOW THE AMOUNT OF RS.37,46,609/- WAS COMPUTED:- DUE TO CHANGE IN ACCOUNTING POLICY DURING THE YEA R REGARDING REVENUE RECOGNITION IN RESPECT OF IRREGULAR ACCOUNTS, SERVI CE CHARGES AMOUNTING TO RS.37,46,609/- HAVE BEEN WRITTEN OFF. HENCE PROFI T FOR THE YEAR HAS BEEN LOWER TO THE EXTENT OF RS.37,46,609/- I WHERE THE RECOVERY OF SERVICE CHARGES IS REGULAR ON ACCRUAL BASIS II WHERE THE RECOVERY OF DUES IS IRREGULAR - THE RECOVERY OF DUES WOULD BE DEEMED TO BE IRREGULAR WHERE THE COMPANY IS IN DEFAULT IN PAYMENT OF DUES FOR A PERIOD OF LAST SIX MONTHS AND THE PAYMENT IS NOT RECEIVED, IN FULL EVEN AFTER A GRACE PERIOD OF 30 DAYS AFTER EXPIRY OF SAID PERIOD OF SIX MONTHS TO BE WRITTEN OFF IN THE BOOKS OF ACCOUNTS ON EXPIRY OF GRACE PERIOD. INCOME TO BE RECOGNIZED ON ACTUAL RECEIPT BASIS. 6. AO DID NOT ACCEPT SUCH SUBMISSIONS OF THE ASSE SSEE. ACCORDING TO AO THE REPLY GIVEN BY ASSESSEE IS CASUAL AND VAGUE. THE ASSESSEE DID NOT PROVIDE PRIMARY DETAILS SUCH AS NAMES OF THE CONCERNED PARTIES, THE AMOUNT INVOLVED, YEAR IN WHICH THE DEBT WAS CREATED AND HAS THUS NOT DISCHARGED THE P RIMARY ONUS CAST UPON ASSESSEE FOR CLAIMING SUCH DEDUCTION. HE ALSO OBSERVED THAT THE ASSESSEES VERY STATEMENT THAT THE PROSPECTS OF RECOVERY WERE DOUBTFUL VERY CLEARLY SU GGESTS THAT DEBTS HAS NOT BECOME BAD AND ARE OF A CONTINGENT NATURE. THEREFORE, THE AO DISALLOWED SAID AMOUNT. I.T.A. NO.6682/MUM/2008 4 7. THE LD. CIT(A) HAS ACCEPTED SUCH SUBMISSIONS OF THE ASSESSEE ON THE BASIS THAT CHANGE IN THE METHOD OF ACCOUNTING WAS BONAFIDE. T HE LD. CIT(A) FURTHER OBSERVED THAT THE DETAILS CALLED FOR BY AO, AS STATED BY THE AO THAT THESE WERE NOT PRODUCED, WERE PRODUCED BEFORE HIM AND ARE PLACED ON RECORD. HE REFERRED TO THE CONTENTION OF THE ASSESSEE THAT THESE WERE FILED BEFORE THE AO. HE OBSERVED THAT THE CHANGE BEING BONAFIDE HAS TO BE ACCEPTED AND DELETED THE ADDITIO N. THE DEPARTMENT IS AGGRIEVED AND HAS EXPRESSED ITS GRIEVANCE IN GROUND NOS.1 AND 2. 8. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. BEFORE US, IT WAS SUBMITTED THAT THE ISSUE RAISED BY THE REVENUE IN GROUND NOS.1 AND 2 IS COVERED IN FAVOUR OF THE ASSE SSEE BY THE FOLLOWING DECISIONS OF TRIBUNAL IN ASSESSEES OWN CASES : (I) DCIT V/S M/S IDBI TRUSTEESHIP SERVICES LTD IN ITA NO.4544/MUM/2009 (AY- 2005-06) ORDER DATED 27.4.2012, COPY OF WHICH IS PL ACED AT PAGES 6 TO 9 OF THE PAPER BOOK; (II) DCIT V/S M/S IDBI TRUSTEESHIP SERVICES L TD IN ITA NO.207/MUM/2012 (AY-2006-07) ORDER DATED 30.4.2013., WHEREIN THE TRIBUNAL HAS REJECTED THE DEPARTMENTAL APPEALS ON THE SIMILAR ISSUE WITH THE FOLLOWING OBSERVATIONS : ITA NO.4544/MUM/2009 (AY-2005-06) PARA 4 OF ORDER DATED 27.4.2012 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING CLAIM OF BAD DE BT AND TAXABILITY OF ADDITIONAL INCOME DECLARED BY THE ASSESSEE IN VIEW OF NEW ACCO UNTING METHOD FOLLOWED SINCE 2004-05. THE ASSESSEE SINCE ASSESSMENT YEAR 2 004-05 WAS WRITING OFF THE DEBTS IN RESPECT OF INCOME IN WHICH THERE WAS NO RE COVERY FOR 7 MONTHS AND IN RESPECT OF BAD DEBTS CLAIM IF ANY INCOME WAS RECEIV ED IN THE SUBSEQUENT YEAR, THE SAME WAS OFFERED AS INCOME. WE FIND THAT THE NE W METHOD ADOPTED BY THE ASSESSEE WAS UPHELD BY THE CIT(A) IN ASSESSMENT YEA R 2004-05 AND ORDER OF CIT(A) HAS BECOME FINAL. IN ASSESSMENT YEARS 2008-0 9 AND 2009-10, AO HAS HIMSELF ACCEPTED THE NEW METHOD BEING FOLLOWED BY T HE ASSESSEE. THEREFORE, FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE METHOD FOLLOWED IN ASSESSMENT YEAR 2005-06 CAN NOT BE REJECTED. ORDER OF CIT(A) UPHOLD ING THE METHOD IS THEREFORE SUSTAINED AND AO IS DIRECTED TO ALLOW THE CLAIM OF BAD DEBT AND TAX THE ADDITIONAL INCOME OFFERED IN RESPECT OF BAD DEBT CL AIMED IN THE EARLIER YEAR. I.T.A. NO.207/M/2012(AY-2006-07, PARAS-4 & 5 OF ORD ER DATED 30.4.2013 4. WE HAVE HEARD LD REPRESENTATIVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW AS WELL AS ORDER OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2005-06(SUPRA). WE OBSERVE THAT ON SIMILAR FA CTS, A COORDINATE BENCH OF THIS TRIBUNAL HAS DISMISSED THE APPEAL OF THE REVEN UE, INTER ALIA, OBSERVING AS UNDER: I.T.A. NO.6682/MUM/2008 5 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING CLA IM OF BAD DEBT AND TAXABILITY OF ADDITIONAL INCOME DECLARED BY TH E ASSESSEE IN VIEW OF NEW ACCOUNTING METHOD FOLLOWED SINCE 2004-0 5. THE ASSESSEE SINCE ASSESSMENT YEAR 2004-05 WAS WRITING OFF THE DEBTS IN RESPECT OF INCOME IN WHICH THERE WAS NO RECOVERY FOR 7 MONTHS AND IN RESPECT OF BAD DEBTS CLAIM IF ANY INCOME WAS RECEIVED IN THE SUBSEQUENT YEAR, THE SAME WAS OFFERED AS INCOME . WE FIND THAT THE NEW METHOD ADOPTED BY THE ASSESSEE WAS UPH ELD BY THE CIT(A) IN ASSESSMENT YEAR 2004-05 AND ORDER OF CIT( A) HAS BECOME FINAL. IN ASSESSMENT YEARS 2008-09 AND 2009- 10, AO HAS HIMSELF ACCEPTED THE NEW METHOD BEING FOLLOWED BY T HE ASSESSEE. THEREFORE, FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE METHOD FOLLOWED IN ASSESSMENT YEAR 2005-06 CAN NOT BE REJE CTED. ORDER OF CIT(A) UPHOLDING THE METHOD IS THEREFORE SUSTAIN ED AND AO IS DIRECTED TO ALLOW THE CLAIM OF BAD DEBT AND TAX THE ADDITIONAL INCOME OFFERED IN RESPECT OF BAD DEBT CLAIMED IN TH E EARLIER YEAR. 5. HENCE, WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE COORDINATE BENCH, AND WE ARE I N CONSIDERED AGREEMENT WITH THE SAME. ACCORDINGLY, WE UPHOLD THE ORDER OF LD CIT(A) BY REJECTING GROUNDS OF APPEAL TAKEN BY DEPARTMENT. 9. THOUGH WHILE REFERRING THE ORDER FOR ASSESSMENT YEAR 2005-06, THE TRIBUNAL HAS OBSERVED THAT THE ORDER RENDERED BY LD. CIT(A) IN RESPECT OF ASSESSMENT YEAR 2004-05 HAS BECOME FINAL BUT THOSE OBSERVATIONS ON THE FA CTS AS THESE EXIST ON TODAY MAY NOT BE CORRECT AS THE SAID ORDER OF LD. CIT(A) IS A SU BJECT MATTER OF APPEAL BEFORE THE TRIBUNAL AND NOW THE APPEAL FILED BY THE REVENUE HAS BEEN REVIVED BUT AT THE SAME TIME THE REVENUE COULD NOT DISPUTE THAT FOR ASSE SSMENT YEARS 2008-09 AND 2009-10, THE AO HAS ACCEPTED THE NEW METHOD FOLLOWED BY AS SESSEE. IF IT IS SO, THEN WE HAVE NO HESITATION IN REJECTING THESE GROUNDS OF THE R EVENUE AS DEPARTMENT HAS ACCEPTED THIS METHOD IN THE SUBSEQUENT ASSESSMENT YEARS. M OREOVER, ACCORDING TO THE FACTS OF THE CASE, WE COULD NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) VIDE WHICH IT HAS ALSO BEEN HELD THAT THE CHANGE OF METHOD IN ACKNOWLEDGING THE INCOME OF SERVICE CHARGES BY THE ASSESSEE WAS BONAFIDE. WE DECLINE T O INTERFERE AND THESE GROUNDS OF APPEAL OF REVENUE ARE DISMISSED. 10. APROPOS GROUND NO.3, DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE AO NOTICED THAT THE AUDITORS OF THE ASSESSEE-COMPANY HAD MADE FOLLOWING QUALIFYING REMARKS AGAINST PARA 22(B) OF THE REPORT U/S 44AB AS UNDER : PRIOR PERIOD EXPENSE AMOUNTING TO RS.5,72,790/- DE BITED TO THE PROFIT AND LOSS A/C HE REQUIRED THE ASSESSEE TO EXPLAIN THE SAME. THE ASSESSEE VIDE ITS LETTER DATED 14.8.2006 SUBMITTED AS UNDER : I.T.A. NO.6682/MUM/2008 6 'THE BREAKS OF PRIOR PERIOD EXPENSES ARE AS FOLLOWS : PARTICULARS PRIOR PERIOD EXPENSES PRIOR PERIOD INCOME SERVICE CHARGES REVERSED 9,16,628 - EXCESS PROVISION FOR SOCIETY MAINTENANCE REVERSED - 3,39,376 MISCELLANEOUS CREDIT - 4,462 NET CHARGED TO PROFIT AND LOSS ACCOUNT 5,72,790 THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRUSTEESHIP SERVICES. THE ASSESSEE COMPANY IS EARNING SERVICE CHARGES FOR ACT ING AS TRUSTEE FOR THE CLIENT COMPANIES. THE SERVICE CHARGES SO EARNED ARE RECOGN IZED AS INCOME IN THE YEAR TO WHICH THEY RELATE. IN MANY CASES THE SERVICE CHA RGES ARE BASED ON THE OUTSTANDING DEBENTURES / BONDS. THE ASSESSEE COMPAN Y IS RECOGNIZING SERVICE CHARGES AS INCOME ON THE BASIS OF LATEST AVAILABLE DETAILS OF OUTSTANDING DEBENTURES / BONDS. HOWEVER, SUBSEQUENTLY THE CLIENT COMPANIES WHILE MA KING THE PAYMENTS DETERMINED THE SERVICE CHARGES ON THE BASIS OF ACTU AL OUTSTANDING DEBENTURES DURING THAT PERIOD. THE ASSESSEE COMPANY AT THE TIME OF RECEIPT OF SERV ICE CHARGES, ACCOUNT FOR THE DIFFERENCE BETWEEN BILLED AMOUNT AND AMOUNT ACTUALL Y RECEIVED AS PRIOR PERIOD ADJUSTMENT AS THE BILLED AMOUNT HAS ALREADY RECORDE D AS INCOME IN EARLIER YEAR. FROM THE ABOVE STATED FACTS YOUR HONOUR WILL APPREC IATE THAT THE ASSESSEE COMPANY IN EARLIER HAS ASSESSED ON EXCESS INCOME. HENCE, IN VIEW OF THIS WE REQUEST THAT THE ASSESSEE MUST BE GRANTED APPROPRIA TE AND LEGITIMATE DEDUCTION FROM ITS TAXABLE INCOME THE ASSESSEE COMPANY HAS PLACED ITS RELIANCE ON THE JUDGMENT DELIVERED BY THE HON 'BLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STALE FERTILIZERS & CHEMICALS LTD. VS. COMMISSIONER OF INCOME TAX (2005) 194 CTR (GUJ) -423, (2006) 283 ITR 149 (GUJ)' REFERRING TO THE ABOVE REPLY THE AO OBSERVED THAT SUM OF RS.5,72,790/- WAS NET OF SERVICE CHARGES REVERSED. THE ASSESSEE ON THE PRE TEXT OF PRIOR PERIOD EXPENSES HAS ACTUALLY WRITTEN OFF DEBTS. AS THE ASSESSEE DID N OT PROVIDE PRIMARY DATA SUCH AS NAME OF THE CONCERNED PARTIES, THE AMOUNT INVOLVED, THE YEAR IN WHICH THE DEBTS WAS CREATED AND HAS THUS NOT DISCHARGED PRIMARY ONUS CAST UPON IT FOR CLAIMING SUCH DEDUCTION. THEREFORE, HE DISALLOWED THE ENTIRE AMOUNT OF RS.9 ,16,628/-. AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE AD DITION WITH THE FOLLOWING OBSERVATIONS : I HAVE PERUSED THE FACTS OF THE CASE. THE FACT TH AT THE INCOME AS ACCOUNTED FOR IN EARLIER YEAR WAS OFFERED FOR TAX HAS NOT BEEN DI SPUTED BY AO. THE FACT THAT WHAT APPELLANT HAS RECEIVED FROM THE CONCERNED PART IES IS LESS THAN WHAT WAS I.T.A. NO.6682/MUM/2008 7 CLAIMED IN THE BILLS HAS ALSO BEEN NOT DISPUTED. THE ARGUMENTS OF AO THAT THE REVERSAL OF INCOME AMOUNTS TO WRITING OFF DEBS IS N OT CORRECT. IN THIS CASE, EXCESS INCOME WAS ALREADY OFFERED TO TAX IN EARLIE R YEARS. THIS SITUATION IS NOT AKIN TO WRITTEN OFF OF BAD DEBT. IT IS A SITUATION WHERE COMPARED TO WHAT WAS EXPECTED AND OFFERED TO TAX, THE ACTUAL INCOME HAS BEEN LOWER. IT IS A QUESTION OF EXPECTED ACCRUAL VIS--VIS ACTUAL ACCRUAL OF I NCOME. THE DIFFERENCE THEREFORE HAS BEEN CLAIMED AS EXPENDITURE BEING REVERSAL OF I NCOME. I DO NOT SEE ANY REASON WHY SUCH A CLAIM SHOULD NOT BE ALLOWED. AS F AR AS THE ISSUE OF PRIMARY ONUS IS CONCERNED, FIRSTLY IT IS NOT WRITING OFF OF DEBTS REQUIRING SUCH AN ONUS UPON THE ASSESSEE AND SECONDLY, ALL THESE DETAILS H AVE BEEN FILED BEFORE ME AND AVAILABLE ON RECORD. APPELLANT HAS ALSO CLAIMED TH AT THESE DETAILS WERE ALSO FILED BEFORE THE AO. IN MY VIEW, IN THE FACTS STATED ABOV E, REVERSAL OF INCOME IS JUSTIFIED AND ADDITION MADE BY AO CANNOT BE SUSTAI NED. GROUND OF APPEAL IS DECIDED ACCORDINGLY. 11. REFERRING TO THE AFOREMENTIONED FACTS, IT WAS SUBMITTED BY LD. DR THAT THE ASSESSEE DID NOT FILE DETAILS BEFORE THE AO. HE SU BMITTED THAT THIS HAS BEEN CLEARLY SPELT OUT IN THE ASSESSMENT ORDER. HE SUBMITTED THAT LD . CIT(A) WITHOUT GOING INTO THE FINDING OF THE AO THAT THE DETAILS HAVE NOT BEEN FI LED HAS DELETED THE ADDITION. HE, THEREFORE, SUBMITTED THAT THE MATTER SHOULD HAVE BE EN RESTORED TO THE FILE OF AO BY THE LD. CIT(A). THUS, IT WAS PLEADED BY LD. DR THAT OR DER PASSED BY THE LD. CIT(A) ON THIS ISSUE SHOULD BE SET ASIDE AND THAT OF AO BE RESTOR ED. 12. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR T HAT ALL THE DETAILS WERE FILED BEFORE THE AO AS WELL AS LD. CIT(A), THEREFORE, H E SUBMITTED THAT THE ORDER PASSED BY LD. CIT(A) SHOULD BE UPHELD. 13. WE HAVE HEARD THE PARTIES AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. IT WAS CLAIMED BY ASSESSEE THAT A SUM OF RS.9,16,6 28/- PERTAINS TO SERVICE CHARGES WHICH ARE REVERSED. THOUGH IT IS A CONTENTION OF THE ASSESSEE AND SUCH CONTENTION HAS BEEN ACCEPTED BY LD. CIT(A), BUT THE FACTS REMAIN T HAT THE DETAILS ARE NOT EVEN FILED BEFORE US BY THE REPRESENTATIVE OF THE ASSESSEE TO SHOW THAT THE SAID AMOUNT OF SERVICE CHARGES WHICH ARE REVERSED HAVE BEEN ACCOUNTED AS I NCOME IN EARLIER YEARS AND DURING THE YEAR UNDER CONSIDERATION IT IS ONLY A DESCRIPTI ON OF AMOUNT WHICH HAS BEEN RECEIVED LESS. IN ABSENCE OF SUCH DETAILS, IT IS DIFFICULT TO ACCEPT THE FINDING OF THE LD. CIT(A) THAT IT IS A PURELY A CASE OF REVERSAL OF INCOME ALREADY SHOWN. IN ABSENCE OF THESE DETAILS, WE CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSU E TO THE FILE OF AO WITH A DIRECTION TO RE-ADJUDICATE THIS ISSUE AS PER LAW AFTER GIVING AS SESSEE A REASONABLE OPPORTUNITY OF HEARING AND TO PLACE ALL THE MATERIAL ON RECORD. W E DIRECT ACCORDINGLY. THIS GROUND OF REVENUE IS CONSIDERED TO BE ALLOWED FOR STATISTIC AL PURPOSES. I.T.A. NO.6682/MUM/2008 8 14. IN THE RESULT, FOR STATISTICAL PURPOSES, THE A PPEAL FILED BY REVENUE CONSIDERED TO BE PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 7TH APRIL, 2014. 0 1 7TH APRIL, 2014 ) SD SD ( / RAJENDRA) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: 7.4.2014 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. $ / THE APPELLANT 2. %&$ / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- CONCERNED 4. 6 / CIT CONCERNED 5. 7 %9 , , 9 , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , 9 , /ITAT, MUMBAI