ITO 6(2)(1), MUMBAI V. CONNECTURF INDIA P. LTD, MUMBAI

ITA 6967/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2630 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 25-11-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 08-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI. BEFORE S/SHRI R K GUPTA (JM) & J. SUDHAKAR REDDY (AM ) I.T.A. NO. 6967/MUM/2008 (ASSESSMENT YEAR: 2005-06) ITO- 6(2)(1), 5 TH FLOOR, ROOM NO.510, AAYAKAR BHAVAN, MUMBAI 400 020 VS. M/S. CONNECTURF INDIA PVT. LTD. UNIT NO.5-B, LADY GLADYS PLAZA, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI 400 013 PAN NO.: - AAACM 3649 A APPELLANT RESPONDENT ASSESSEE BY : SHRI. AARSI PRASAD DEPARTMENT BY : NONE ORDER PER R.K.GUPTA (JM) THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED AG AINST THE ORDER OF THE LD. CIT(A)-VI, MUMBAI, DATED 09.09.2008 RELATIN G TO THE ASSESSMENT YEAR 2005-06. 2. THE DEPARTMENT IS OBJECTING IN ALLOWING BAD DEBT S AMOUNTING TO RS.29,00,274/-. 3. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF BA D DEBTS OF RS.29,00,274/- ON THE GROUND THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN U/S.36(1)(VII) R.W.S. 36(2). W HILE REJECTING THE CLAIM, ITA NO.6967/M/08 ASSESSMENT YEAR: 2005-06 M/S. CONNECTURF INDIA PVT. LTD. 2 THE ASSESSING OFFICER NOTED THAT THE DEBT MUST BE A PROPER DEBT. THE DEBT CLAIMED MUST BE REVENUE IN NATURE AND SHOULD HAVE B ECOME BAD. THE AMOUNT SHOULD HAVE BEEN TAKEN BY THE ASSESSEE IN TH E EARLIER YEARS. 4. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE ASS ESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE BAD DEBTS UNDER TH E AMENDED PROVISIONS OF SECTION 36(1)(VII), THE ASSESSEE IS REQUIRED TO WRITE OFF THE DEBTS IN THE BOOKS OF ACCOUNTS. HE IS NOT REQUIRED TO GIVE DEMON STRATIVE PROOF FOR THE DEBTS FOR BECOME BAD. RELIANCE WAS PLACED ON VARIOU S DECISIONS I.E. ITO VS. ANIL H. RASTOGI [86 ITD 193] (TM), DCIT VS. PAK S TRADE CENTRE [53 ITD 313] (CAL), JAYANTI COMMERCE LTD. VS. ACIT [61 ITD 183]. THE DECISION RELIED IN THE CASE OF SOUTH INDIA SURGICAL CO. LTD. VS. ACIT [201 CTR 289] WHEREIN IT WAS HELD THAT DEBTS RELATING TO GOVERNME NT CANNOT BE WRITTEN OFF, WHICH IS NOT THE CASE OF THE ASSESSEE. 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, THE CIT(A) FOUND THAT THE ISSUE IS COVERED IN THE CASE OF OMAN INTERNATIONAL BANK S.A.O.G. (100 ITD 285), WHEREIN IT IS HELD THAT THE ASSESSEE IS NOT REQUIRED TO GIVE DEMONSTRATIVE PROO F THAT DEBT HAS BECOME BAD; ACCORDINGLY, THE CLAIM OF THE ASSESSEE IS ALLOWED. NOW, DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LEARNED DR PLACED RELIANCE ON THE ORDER OF T HE AO. NONE APPEARED ON BEHALF OF THE ASSESSEE. HENCE, WE DISPO SE OFF THE APPEAL AFTER HEARING THE LD. DR. 7. AFTER CONSIDERING THE ORDER OF THE ASSESSING OFF ICER AND THE CIT(A), WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) , WHO ALLOWED THE APPEAL OF THE ASSESSEE. FOLLOWING THE DECISION OF THE SPEC IAL BENCH OF THE ITA NO.6967/M/08 ASSESSMENT YEAR: 2005-06 M/S. CONNECTURF INDIA PVT. LTD. 3 TRIBUNAL IN THE CASE OF OMAN INTERNATIONAL BANK S.A .O.G. (100 ITD 285). THIS DECISION OF THE SPECIAL BENCH HAVE NOW BEEN CO NFIRMED BY THE HONBLE BOMBAY HIGH COURT. THEREFORE, WE SEE NO REA SON TO INTERFERE IN THE ORDER OF THE CIT(A). ACCORDINGLY, ORDER OF THE LD. CIT(A) IS CONFIRMED. 8. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED ON 7 TH DECEMBER, 2009. SD/- SD/- J. SUDHAKAR REDDY R. K. GUPTA (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) MUMBAI, ON THIS 7 TH DAY OF DECEMBER, 2009 NEELAM, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A) CONCERNED 4. THE CIT CONCERNED 5. THE DR C BENCH BY ORDER TRUE COPY ASST.REGISTRAR, ITAT, MUMBAI ITA NO.6967/M/08 ASSESSMENT YEAR: 2005-06 M/S. CONNECTURF INDIA PVT. LTD. 4 DATE INITIALS 1. DRAFT DICTATED ON: 25.11.09 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 26.11.09 SR. PS/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/PS: SR. PS/ PS 6. ORDER PRONOUNCED ON: SR. PS/PS 7. ORDER COME BACK TO SR.PS/PS 8. FILE SENT TO THE BENCH CLERK: SR. PS/PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: 10. DATE OF DISPATCH OF ORDER: