RAMESH MURLIDHAR JOSHI, Nashik V. ITO,Wd.-2(2), Nashik

ITA 80/PUN/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7426 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 16-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY DAMLE
• Keywords: Bad and doubtful debts; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A : PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI G.S. PANNU, AM I.T.A. NO. 80/PN/2009 : A.Y. 2005-06 RAMESH MURLIDHAR JOSHI 480/810 JOSHI SADAN, OPP. KBH HIGH SCHOOL, SHARANPUR ROAD NASIK PAN AAKPJ 5902 APPELLANT VS. I.T.O. WARD 2(2) NASIK RESPONDENT APPELLANT BY : SHRI NIKHIL PATHAK RESPONDENT BY: SHRI ABHAY DAMLE ORDER PER SHAILENDRA KUMAR YADAV THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-II NASIK DATED 11-11-2008 FOR A .Y. 2005-06 ON THE FOLLOWING GROUNDS. 1. THE LEARNED ASSESSING OFFICER AND THE HONBLE CIT(A) ARE WRONG IN DETERMINING THE INCOME FROM BUSINESS OF MAKING INVESTMENTS OF FIXED DEPOSITS WI TH PRIVATE PARTIES, WITH CO-OP. BANKS AND OTHER BANKS AND EARNING THE INCOME THEREFROM, AS INCOME FROM OTHER SOURCES. 2. THE LEARNED ASSESSING OFFICER AND THE HONBLE CIT(A) OUGHT TO HAVE CONSIDERED THAT THE PREDECESSO R ASSESSING OFFICER IN A.Y. 2004-05 CONSIDERED THAT THE INCOME FROM FIXED DEPOSIT WITH BANK AND INTEREST ON PRIVATE PARTIES ETC., IS INCOME FROM BUSINESS. ITA NO. 80/PN/09 RAMESH MURLIDHAR JOSHI A.Y. 2005-06 - 2 - 3. THE LEARNED A.O DENIED THE CLAIM OF LOSS ON ACC OUNT OF NON-RECEIPT OF FIXED DEPOSIT OF RS. 50 LAKHS FRO M SHRIRAM SAHAKARI BANK LTD., AND ADDED TO THE TOTAL TAXABLE INCOME. 2. THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FR OM PARTNERSHIP FIRM. THE ASSESSEE FILED HIS RETURN OF INCOME ON 24-10-2005 SHOWING A LOSS OF RS. 38,76,731/-. SUBS EQUENTLY HE FILED A REVISED RETURN ON 23-6-2006 SHOWING TOTA L LOSS OF RS. 35,51,911/-. DURING THE ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE CLAIMED AN AMOUNT OF RS. 50,00,000/- AS LOSS ON ACCOUNT OF NON-RECEIP T OF FIXED DEPOSITS INVESTED IN SHRIRAM SAHAKARI BANK LTD., NA SIK. WHILE COMPLETING THE ASSESSMENT U/S 143(3) OF THE ACT, TH E ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A) WHO UPHELD THE ACTION OF THE ASSESSING OFFICER. THE SA ME HAS BEEN OPPOSED BEFORE US BY THE ASSESSEE. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT SIMILAR ISSUE AROSE IN ASSE SSEES OWN CASE IN ITA NO. 842/PN/2009 FOR A.Y. 2007-08 WHEREI N THE ISSUE HAS BEEN REMITTED BACK TO THE FILE OF THE CIT (A) WITH A DIRECTION TO DECIDE THE SAME KEEPING IN VIEW THE JU DGMENT OF HONBLE SUPREME COURT IN THE CASE OF T.R.F. LTD. VS . CIT (2010) 230 CTR (SC) 14, BY OBSERVING AS UNDER: ITA NO. 80/PN/09 RAMESH MURLIDHAR JOSHI A.Y. 2005-06 - 3 - 2. THE ASSESSEE HAS CLAIMED BAD DEBTS OF RS. 30,00,000/-. THE AMOUNT REFLECTED FIXED DEPOSITS MAINTAINED BY THE ASSESSEE WITH SHRIRAM SAHAKARI BA NK LTD., NASIK. THE SAID BANK HAS GONE INTO LIQUIDATI ON. THE FDS WHICH WERE MATURING DURING THE RELEVANT FINANCIAL YEARS HAVE BEEN CLAIMED AS A BAD DEBT U/S 36(1)(VII)/36(2) OF THE ACT. THE A.O HOWEVER, HAS NOT ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THA T THE INVESTMENTS IN FDS CANNOT BE CALLED AS BUSINESS ACT IVITY AND THE INTEREST INCOME IS ASSESSABLE UNDER THE HEA D INCOME FROM OTHER SOURCES. THE CIT(A) CONFIRMED T HE DISALLOWANCE. SAME HAS BEEN OPPOSED BEFORE US. ON T HE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 3. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ISSUE RAISED IN THIS APPEAL STANDS COVERED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF T.R.F. LTD. VS. CIT (2 010) 230 CTR (SC) 14 WHEREIN IT HAS BEEN HELD AS UNDER: AFTER 1 ST APRIL 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE, HOWEVER, IN THE PRESENT CASE, THE A.O HA S NOT EXAMINED WHETHER THE DEBT HAS, IN FACT, BEEN WRITTEN OFF IN ACCOUNTS OF THE ASSESSEE. THIS EXERC ISE HAS NOT BEEN UNDERTAKEN BY THE A.O. HENCE, THE MATTER IS REMITTED TO THE A.O FOR DE NOVO CONSIDERATION OF THE ABOVE MENTIONED ASPECT ONLY AND THAT TOO ONLY TO THE EXTENT OF THE WRITE OFF. 4. SO, RESPECTFULLY FOLLOWING THE AFORESAID JUDGMEN T OF HONBLE SUPREME COURT IN THE CASE OF T.R.F. LTD (SU PRA), WE FIND THAT THE AUTHORITIES BELOW WERE NOT HAVING THE BENEFIT OF DECISION IN THE CASE OF T.R.F. LTD. (SUP RA) WHILE DISALLOWING THE CLAIM OF THE ASSESSEE. KEEPING IN V IEW THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF T. R.F. LTD. (SUPRA), THE MATTER IS RESTORED BACK TO THE FI LE OF THE CIT(A) WITH A DIRECTION TO DECIDE THE ISSUE AT HAND AS PER FACT AND LAW AFTER PROVIDING DUE OPPORTUNITY OF HEA RING TO THE ASSESSEE. ITA NO. 80/PN/09 RAMESH MURLIDHAR JOSHI A.Y. 2005-06 - 4 - 4. FACTS BEING SIMILAR, SO, RESPECTFULLY FOLLOWING THE ABOVE MENTIONED ORDER OF THE TRIBUNAL IN ASSESSEES OWN C ASE WE REMIT THE MATTER TO THE FILE OF THE CIT(A) WITH A D IRECTION TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW AND FACTS A FTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSE E. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH 2011. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED THE 31 ST MARCH 2011 ANKAM COPY OF ORDER FORWARDED TO : 1. ASSESSEES 2. DEPARTMENT 3. CIT - I NASIK 4. CIT(A) I NASIK 5. ITAT, D.R. A BENCH, PUNE. TRUE COPY BY ORDER ASSTT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE.