Ashima Dyecot Limited, Ahmedabad V. The ACIT., Circle-1, Ahmedabad

ITA 798/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0530 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-10-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 19-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Assessee Lawyers: S N SOPARKAR
• Keywords: Opportunity of being heard; Bad and doubtful debts; Assessment record; Set aside
• Section: 28

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGARWAL, A.M.) I.T.A. NO. 798/AHD./2007 ASSESSMENT YEAR : 2003-2004 ASHIMA DYECOT LTD., AHMEDABAD -VS.- AS SISTANT COMMISSIONER OF INCOME TAX, (P.A. NO. AACCA 2753 K) CIRCLE-1, AHMEDABAD (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI S.N. SOPARKAR RESPONDENT BY : SHRI M.C. PANDIT O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER :- THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER DATED 11.12.2006 OF LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) -V, AHMEDABAD FOR THE ASSESSMENT YEAR 2003-2004 ON THE FOLLOWING GROU NDS :- (1) IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD. C.I.T.(A)HAS GROSSLY ERRED IN DISALLOWING THE B AD DEBTS TUNING TO RS.44,89,898/- WHEN NO SUCH DISALLOWANCE IS CALLED FOR. (2) WITHOUT PREJUDICE, IN LAW AND ON THE FACTS AND CIRC UMSTANCES OF THE APPELLANTS CASE, THE LEARNED COMMISSIONER OF INCOM E TAX(APPEALS) HAS GROSSLY ERRED IN NOT ALLOWING THE SAID DEBT AS BUSINESS LOSS U/S. 28 OF THE I.T. ACT. (3) IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GRO SSLY ERRED IN OBSERVING THAT THE COPIES OF ACCOUNT RELATING TO BA D DEBT WRITTEN OFF WERE NOT FILED DESPITE SEVERAL OPPORTUNITIES TO THE APPELLANT, WHEN IN FACT, ALL THE COPIES OF ACCOUNT WERE SUBMITTED BEFO RE HIM. 2. AT THE TIME OF HEARING, ON BEHALF OF ASSESSEE SH RI S.N. SOPARKAR APPEARED AND CONTENDED THAT BAD DEBTS TUNING TO RS.44,89,898/- REPRESENT R ATE DIFFERENCE ON PURCHASES CLAIMED FROM THE RESPECTIVE PARTIES IN THE YEAR 1996-97 ONWARDS. AT THE RELEVANT TIME, THE SAID AMOUNTS WERE CREDITED TO THE MATERIAL COST ACCOUNT. AS THE CLAIM WAS NOT SETTLED AMOUNT OUTSTANDING IN THE NAME OF THE RESPECTIVE PARTIES HAS BEEN WRITTEN OFF . IT WAS CLAIMED BEFORE THE A.O. THAT AMOUNT IN QUESTION IS ALLOWABLE AS BUSINESS LOSS UNDER SECTIO N 28 OF THE INCOME TAX ACT, 1961. IN THE IMPUGNED ORDER, THIS PLEA OF THE ASSESSEE HAS NOT B EEN ADJUDICATED BY THE LEARNED COMMISSIONER 2 OF INCOME TAX(APPEALS), THOUGH COMPLETE DETAILS WER E AVAILABLE IN THE ASSESSMENT RECORD AND WAS FURNISHED BEFORE HIM. HE ACCORDINGLY REQUESTED THAT THE BAD DEBTS TO THE TUNE OF RS.44,89,898/- CLAIMED BE ALLOWED AS BUSINESS LOSS UNDER SECTION 28 OF THE INCOME TAX ACT, 1961. 3. ON THE OTHER HAND, SHRI M.C. PANDIT, LD. DEPARTM ENTAL REPRESENTATIVE POINTED OUT THAT SINCE THIS PLEA WAS NOT ADJUDICATED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THEREFORE, IN THE INTEREST OF JUSTICE, THE MATTER B E RESTORED TO THE FILE OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), WHO WILL RE-ADJUDICATE THIS PL EA/ APPEAL OF THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW. 4. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT I N PARA 3.1 OF THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) NOTED THE AFORE SAID PLEA OF THE ASSESSEE BUT HAS NOT ADJUDICATED THE SAME. IN THESE CIRCUMSTANCES, WE FI ND CONSIDERABLE FORCE IN THE SUBMISSION OF THE LD. D.R. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDE R OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND RESTORE THE SAME TO THE FILE OF A. O. WITH THE DIRECTION THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WILL RE-ADJUDIC ATE THE APPEAL OF THE ASSESSEE AFRESH INCLUDING THE PLEA RAISED BEFORE HIM WHICH IS NOTED IN PARA 3.1 & 3.2 OF THE IMPUGNED ORDER AFTER GIVING OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES . 5. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE COURT ON 06.11.2009 SD/- SD/- (D.C. AGARWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 06 / 11 / 2009 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT 3) CIT(A) CONCERNED; (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.