THE ITO 9(1)-2, MUMBAI V. M/S. BASSEIN METAL P. LTD, MUMBAI

ITA 6946/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2675 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-11-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 05-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG SR
• Keywords: Bad and doubtful debts; Set aside
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI. BEFORE SHRI R.V.EASWAR, SENIOR VICE PRESIDENT I.T.A. NO. 6946/MUM/2008 (ASSESSMENT YEAR : 2003-04 ) THE INCOME TAX OFFICER, WARD-9(1)(2), 226, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400 020. VS. M/S. BASSEIN METAL P. LTD. 10A, GROUND FLOOR, DATTANI APARTMENT, S.V. ROAD, KANDIVALI(W), MUMBAI-400 0067. PAN:AAACB3360R (APPELLANT) (RESPONDENT) APPELLANT BY : MR. ANKUR GARG, SR.AR RESPONDENT BY : NONE O R D E R THERE WAS NO REPRESENTATION FROM THE ASSESSEE WHEN THE APPEAL WAS CALLED FOR HEARING. I FIND FROM THE ORD ER SHEET THAT THE ASSESSEE HAS NOT CHOSEN TO APPEAR WHEN THE APP EAL WAS POSTED FOR HEARING EARLIER. I THEREFORE, PROCEED TO DISPOSE OF THIS APPEAL ON MERITS IN THE ABSENCE OF THE ASSESSEE AN D AFTER HEARING THE LEARNED D.R. AND ON THE BASIS OF THE RE CORD. 2. THE APPEAL IS BY THE DEPARTMENT AND IS DIRECTED AGAINST THE ORDER OF THE CIT(A) DELETING THE DISALLOWANCE O F THE BAD DEBT OF RS.8,80,961/-. I HAVE HEARD THE LEARNED SENIOR D R AND CAREFULLY GONE THROUGH THE ORDERS OF THE DEPARTMENT AL AUTHORITIES. THE ASSESSING OFFICER DISALLOWED THE CLAIM ON THE GROUND THAT THOUGH THE ASSESSEE WAS DIRECTED TO FUR NISH THE DETAILS OF THE AMOUNT WRITTEN OFF IN THE PROFIT AND LOSS ACCOUNT, SUCH AS NAMES, ADDRESSES, PAN NUMBERS ETC. THEY WER E NOT FURNISHED BY THE ASSESSEE. IN FACT, HE REFERRED TO A LETTER WRITTEN BY THE ASSESSEE IN WHICH IT WAS STATED THAT THESE D ETAILS WERE BEING FILED, BUT THEY WERE NOT ACTUALLY FILED. HE H OWEVER DID NOT ITA NO.6946/MUM/08 2 DISPUTE THAT THE AMOUNT WAS WRITTEN OFF IN THE PROF IT AND LOSS ACCOUNT. 3. ON APPEAL, THE CIT(A) OBSERVED THAT THE ASSESSEE IS REQUIRED TO SATISFY TWO CONDITIONS NAMELY THAT BAD DEBTS SHOULD BE WRITTEN OFF IN THE ACCOUNTS AND THAT THEY SHOULD HAVE BEEN INCLUDED AS INCOME OF THE ASSESSEE IN EARLIER YEAR. HE AGREED THAT THE AMOUNT WAS WRITTEN OFF IN THE BOOKS. HE FU RTHER FOUND THAT THE PARTIES WERE NOT IN ANY WAY CONNECTED TO T HE ASSESSEE. ON THESE FACTS AND FOLLOWING THE ORDER OF THE SPECI AL BENCH OF THE TRIBUNAL IN THE CASE OF OMAN INTERNATIONAL LTD. 102 TTJ 201 (MUM), HE DELETED THE DISALLOWANCE OF THE BAD D EBTS. 4. THE CONTENTION OF THE LEARNED SENIOR D.R. BEFORE ME IS THAT THE ASSESSEE DID NOT FURNISH ANY DETAILS ABOUT THE DEBTORS NOR DID IT FILE DETAILS TO SHOW THAT THE DEBTS WERE EARLIER ASSESSED AS INCOME OF THE ASSESSEE. HE SUBMITTED TH AT THE CIT(A) DID NOT EXAMINE THIS QUESTION AS TO WHETHER THE AMOUNTS WERE EARLIER ASSESSED AS INCOME OF THE ASSESSEE AND PROCEEDED TO DELETE THE DISALLOWANCE MERELY ON THE GROUND THA T THE DEBTS WERE WRITTEN OFF IN THE BOOKS. IT IS CONTENDED THAT WITHOUT THE BASIC FACTS CALLED FOR BY THE ASSESSING OFFICER IT IS NOT POSSIBLE TO COUNTENANCE THE DECISION OF THE CIT(A). 5. I FIND SUFFICIENT FORCE IN THE SUBMISSIONS MADE BY THE LEARNED SENIOR DR. IT IS TRUE THAT AS HELD BY THE S PECIAL BENCH (SUPRA) THAT A MERE WRITE OFF OF THE DEBTS IN THE B OOKS OF THE ASSESSEE MAY BE SUFFICIENT TO JUSTIFY THE ALLOWANCE . HOWEVER, IT IS ALSO TRUE THAT IT IS NECESSARY TO SEE THAT THE A MOUNTS WRITTEN OFF WERE EARLIER ASSESSED AS THE INCOME OF THE ASSE SSEE. THERE IS NO MATERIAL TO SHOW THAT THIS CONDITION WAS SATISFI ED. THE ASSESSEE HAS ALSO NOT FURNISHED ANY OF THE DETAILS CALLED FOR BY THE ASSESSING OFFICER. IN FACT THE ASSESSEE WRONGLY STATED IN ITS LETTER TO THE ASSESSING OFFICER THAT THE DETAILS WE RE ATTACHED TO ITA NO.6946/MUM/08 3 THE LETTER. TAKING ALL THESE INTO CONSIDERATION, I SET ASIDE THE ORDERS OF THE DEPARTMENTAL AUTHORITIES AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER BEFORE WHOM THE A SSESSEE SHALL SUBMIT THE NECESSARY DETAILS FOR CLAIMING THE ALLOW ANCE FOR WHICH DUE OPPORTUNITY MAY BE GIVEN. THE ASSESSING O FFICER SHALL TAKE A DECISION THEREAFTER IN ACCORDANCE WITH LAW. THE APPEAL OF THE DEPARTMENT IS THUS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED ON THIS 11 TH DAY OF DECEMBER, 2009. SD/- ( R.V.EASWAR ) SENIOR VICE PRESIDENT MUMBAI, DATED 11 TH DECEMBER, 2009. SOMU COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-IX, MUMBAI. 4. THE CIT(A)-IX, MUMBAI 5. THE DR SMC BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI