M/s. SHREE GEBI ENTERPRISE, MUMBAI V. ITO - 25(3)(3), MUMBAI

ITA 6704/MUM/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1607 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-10-2009
• Assessment Year: 1996-1997
• Appeal Filed On: 11-12-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR U ANJANEYULU
• Keywords: Business expenditure; Retrospective amendment; Bad and doubtful debts
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH: MUMBAI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI V D RAO, JUDICIAL MEMBER ITA NO 6704/MUM/2006 (ASSESSMENT YEAR: 1996-97) SHREE GEBI ENTERPRISE , 107/108, SUPER SHOPPING COMPLEX, 1ST FLOOR, BAJAJ CROSS ROAD, KANDIVLI (W), MUMBAI -400 067 PAN: AABFS 3279 A VS ITO-25(3)(3) , C-11, PRATYAKSHAKAR BHAVAN, THIRD FLOOR, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI -400 051 APPELLANT RESPONDENT APPELLANT BY: SHRI PRAMOD KUMAR PARIDA RESPONDENT BY: DR U ANJANEYULU ORDER PER PRAMOD KUMAR 1. BY WAY OF THIS APPEAL, THE ASSESSEE HAS CHALLENG ED CORRECTNESS OF CIT (A)S ORDER DATED 14.11.2006 ON THE FOLLOWING GROUNDS:- 1. THE LEARNED CTI (A) XXV HAS NOT CONSIDER THE RE LIEF U/S 80HSC IN A RIGHT SPIRIT. 2. BUSINESS EXPENDITURE HAS BEEN DISALLOWED ON ESTI MATE BASIS NOT JUSTIFIED. 3. BAD-DEBTS CLAIMED DURING THE ASSESSMENT PROCEEDI NG, IN THE YEAR OF TRANSACTION HAVE NOT BEEN CONSIDER. 4. INSURANCE CLAIMED RECEIVED HAS BEEN WRONGLY TREA TED AND THE LOSS DUE TO FIRE HAS NOT BEEN CONSIDER. 5. REVISED GROUNDS OF APPEAL SUBMITTED TO THE LEARN ED ASSESSING OFFICER HAS BEEN IGNORED AND THE NEGATIVE FIGURE WORKED OUT BY THE DCIT FOR DENYING DEDUCTION U/S 80HSC(3) AS PER THE AMENDED RULES HAS NOT BEEN TAKEN INTO CONSIDERATION. 6. THE DCIT OUGHT TO HAVE ALLOWED BAD DEBTS SINCE I T NOW SETTLED LAW AS LAID DOWN BY THE SPECIAL BENCH OF ITACT IN THE CASE OF DCIT VS BANK OF OMAN AND SPECTRUM BUSINESS SUPPORTS LTD VS DCIT ITA NO.7 431/M/97 FOR AY 1994- 95 THAT THE BAD DEBTS ARE TO BE ALLOWED AS THE BUSI NESS MAN THINGS FIT IN THE SHREE GEBI ENTERPRISE 2 YEAR IN WHICH THE SAME IS WRITTEN OFF. BASED ON TH E RATION OF THE ABOVE DECISION BAD DEBTS OUGHT TO BE ALLOWED. 7. THE DCIT WRONGLY DENIED THE CLAIM OF 80HHC DUE T O NEGATIVE FIGURE DISREGARDING RETROSPECTIVE AMENDMENT W E F AY 1992- 93 BY TAXATION LAWS (SECOND AMENDMENT) ACT 2005 -5TH PROVISION WHERE IN WORKING OUT PROFITS U/S 80HHC(3) LOSS BEFORE INCENTIVE CAN BE SET OFF AGAIN ST EXPORT INCENTIVES AND NET FIGURE ONLY IS TO BE CONSIDERED. 8. THE DCIT FAILED TO TAKE INTO CONSIDERATION THAT THE CEILING OF RS 10 CRORES BY AMENDMENT IN 2005 IS BE RETROSPECTIVE EFF ECT AND THEREFORE THE APPELLANT VIEWED FROM ANY ANGLE IS ENTITLE TO DEDUC TION UNDER SECTION 80HHC. 2. LEARNED COUNSEL SUBMITS THAT THE MATTER IS REQUI RED TO BE REMITTED TO THE FILE OF THE CIT (A) FOR FRESH ADJUDICATION AFTER CONFRON TING THE ASSESSEE WITH THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER, WHICH TH E ASSESSEE HAD NO OCCASION TO SEE IN THE APPELLATE PROCEEDINGS. IT IS SUBMITTED THAT THE PROCEEDINGS BEFORE THE CIT (A) WERE VITIATED BY VIOLATIONS OF THE PRINCIPLES OF NA TURAL JUSTICE. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT SERIOUSLY OPPOSE THE ASSESSEES PRAYER FOR THE MATTER BEING REMITTED TO THE FILE OF THE CIT (A) NOR WAS HE IN A POSITION TO CONTROVERT THE FACTUAL ELEMENTS EM BEDDED IN LEARNED COUNSELS SUBMISSIONS. 4. IN VIEW OF THE ABOVE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE CIT (A) FOR FRESH ADJUDICATION AFTER GIVING ASSESSEE AN OPPORTUNITY OF HEARING AND AFTER CONFRONTING THE ASSESSEE WILL ALL MATERIA L THAT HE PROPOSES TO US AGAINST THE ASSESSEE. THE MATTER STANDS RESTORED TO THE FILE O F THE CIT (A) AS SUCH. 5. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT TODAY ON THE 26TH OCT OBER 2009. SD/- (V D RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATE: 26TH OCTOBER 2009 SHREE GEBI ENTERPRISE 3 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-XXV, MUMBAI. 4) THE CITMUMBAI CITY-25, MUMBAI. 5) THE D.R. E BENCH, ITAT, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR CHAVAN* I.T.A.T., MUMBAI SHREE GEBI ENTERPRISE 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 26.10.09 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 26.10.09 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS 7 FILE SENT TO THE BENCH CLERK SR.PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER