Appeal Details
Counselvise Citation
[2016] 133 COUNSELVISE.COM (IT) 1344 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
8 year(s) 2 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
02-06-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
30-05-2016
Assessment Year
2004-2005
Appeal Filed On
12-03-2008
Judgement Text
, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI R. P. TOLANI, JM, AND SHRI MANISH BORAD , AM ./ITA.NO.933/AHD/2008 ( / ASSTT YEAR : 2004-05) NAVIN DETERGENTS PVT. LTD. NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD. PAN AAACN 5215B VS. ACIT, CIRCLE-5, AHMEDABAD. (APPELLANT) (RESPONDENT) / APPELLANT BY: MR. A. R. REWAR, SR.DR / RESPONDENT BY: SHRI H. C. SHAH, AR / DATE OF HEARING 30/05/2016 /DATE OF PRONOUNCEMENT 02/06/2016 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER THIS APPEAL OF ASSESSEE IS DIRECTED AGAINST THE O RDER OF LD.CIT(A)- XI, AHMEDABAD DATED 10.01.2008 PASSED AGAINST THE O RDER U/S 144 R.W.S. 143(3) OF THE IT ACT, 1961(IN SHORT THE ACT) DT.13 .12.2006 FRAMED FOR ASST. YEAR 2004-05 BY ACIT, CIRCLE-5, AHMEDABAD. 2. GRIEVANCES OF THE ASSESSEE, IN THIS APPEAL ARE A S UNDER :- 1. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN POINTS OF LAW AND FACTS. 2. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING DISALLOWANCE OF BAD DEBTS OF RS.19,11,282/-. ITA.NO.993/AHD/2008 - 2 3. YOUR APPELLANT RESERVES THE RIGHT TO ADD ALTER, AMEND ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL AS MAY BE ADVISED FROM TIME TO TIME. 3. BRIEFLY STATED FACTS OF THE CASE AS CULLED OUT F ROM THE ASSESSMENT RECORDS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN TRADING IN DETERGENTS, TOILET SOAPS AND INCENSE STI CKS. RETURN OF INCOME WAS FILED ON 30.10.2004 DECLARING TOTAL LOSS OF RS. 17,44,747/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143(2) OF THE ACT WAS ISSUED AND SERVED ON ASSESSEE ON 25.07.2005 FOLLOWE D BY NOTICE U/S 142(1) OF THE ACT AND QUESTIONNAIRE CALLING FOR DET AILS. IN RESPONSE TO THE NOTICE PART OF INFORMATION WERE SUPPLIED AND ASSESS EE WAS NON COMPLIANT ON SOME OCCASIONS DURING THE COURSE OF ASSESSMENT P ROCEEDINGS BY WAY OF NOT ATTENDING AND NON-FURNISHING OF DETAILS ON 2 7.11.2006 AND 13.12.2006 AND, THEREFORE, ON THE BASIS OF AVAILABL E RECORDS IN THE FILE EX PARTE ASSESSMENT WAS COMPLETED U/S 144 R.W.S. 143(3 ) OF THE ACT ON 13.12.2006 AFTER MAKING FOLLOWING ADDITIONS :- 1. DISALLOWANCE OF BAD DEBTS RS.19,11,282/- 2. DISALLOWANCE OF DEPRECIATION ON INTANGIBLE ASSETS RS. 6,15,234/- INCOME WAS ASSESSED AT RS.7,81,760/-. 4. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CI T(A) WHEREIN DISALLOWANCE RELATING TO DEPRECIATION ON INTANGIBLE ASSETS AT RS.6,15,234/- WAS DELETED WHEREAS DISALLOWANCE ON BAD DEBTS AT RS .19,11,282/- WAS CONFIRMED. LD. CIT(A) WHILE CONFIRMING THE DISALLOW ANCE OF BAD DEBT OF RS.19,11,282/- OBSERVED AS UNDER :- ITA.NO.993/AHD/2008 - 3 3.2. THE SUBMISSIONS MADE BY THE A R. HAVE BEEN VERIFIED AND THE OBSERVATIONS OF THE A. 0. ARE ALSO EXAMINED. HAVING VERIF IED THE FACTS OF THE CASE, I FIND THAT THE A. 0. IS JUSTIFIED IN DISALLOWING THE BAD DEBTS CLAIMED IN VIEW OF THE DECISION OF GUJARAT HIGH COURT IN CASE OF DH ALI ENTERPRISES AND ENGINEERS (P) LTD. VS. CIT (2007) 207 CTR (GUJ.) 729. THE GIST OF THE SAID DECISION IS AS UNDER:- 'BUSINESS EXPENDITURE - BAD DEBT - CONDITIONS PRECE DENT - REQUIREMENT FOR CLAIMING DEDUCTION ON ACCOUNT OF BAD DEBT IS THAT THE DEBT S HOULD BE WRITTEN OFF AS IRRECOVERABLE AND THE ASSESSEE SHOULD PROVE THAT TH E DEBT HAS BECOME BAD IN THAT YEAR - MERE DEBITING THE AMOUNT IS NOT SUFFICIENT - AMOUNT DUE TO ASSESSEE WAS NOT PAID BY THE DEBTORS IN THE RELEVANT YEAR DUE TO SOM E MUTUAL DIFFERENCES - CORRESPONDENCE BETWEEN THE PARTIES SHOWS THAT THE A SSESSEE WAS INSISTING ON PAYMENT OF THE DEBTS - IT CANNOT BE SAID THAT THE D EBTS HAD BECOME BAD IN THE RELEVANT YEAR - CLAIM FOR BAD DEBTS RIGHTLY DISALLO WED. CONCLUSION : DEBTS DUE TO ASSESSEE CANNOT BE SAID T O HAVE BECOME BAD IN THE RELEVANT YEAR WHERE THE DEBTORS HAD NOT PAID THE AM OUNT DUE TO SOME DIFFERENCES AND THE ASSESSEE WAS INSISTING ON PAYMENT AND THERE FORE, CLAIM FOR DEDUCTION OF BAD DEBTS WAS NOT ALLOWABLE.' 3.2.1. THEREFORE, IN VIEW OF ABOVE DISCUSSIONS, I AM INCLIN ED TO CONFIRM THE DECISION OF THE ASSESSING OFFICER. HENCE, THIS GROUND OF A PPEAL IS TREATED AS DISMISSED. 5. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 6. LD. AR SUBMITTED THAT AN AMOUNT OF RS.19,11,282/ - HAS BEEN CLAIMED IN THE BOOKS OF ACCOUNT AS BAD DEBTS RELATI NG TO 14 PARTIES BECAUSE THE RECOVERY OF THESE 14 ACCOUNTS WAS NOT F ORTH-COMING AND THERE WERE MEAGER POSSIBILITY OF THEIR RECOVERY. LD . AR FURTHER SUBMITTED THAT COPY OF ACCOUNTS WERE FURNISHED BEFORE THE LOW ER AUTHORITIES AND INFORMED THAT ASSESSEE HAS SOLD GOODS TO THESE PART IES AND OFFERED THE INCOME THEREON FOR TAXATION AND MERELY BECAUSE THE ASSESSEE DID NOT FURNISH PAN, THE CLAIM OF BAD DEBTS U/S 36(1)(VII) CANNOT BE DENIED AS THERE IS NO PRE-CONDITION OF PAN DETAIL FOR CLAIMIN G THE EXPENDITURE AS THIS IS NOT THE CASE OF CASH CREDIT WHEREIN ASSESSE E IS REQUIRED TO FURNISH THE PROOF OF IDENTITY OR GENUINENESS OF THE CASH CR EDIT. LD. AR ALSO RELIED ITA.NO.993/AHD/2008 - 4 ON THE DECISION OF HON. SUPREME COURT IN THE CASE O F 323 ITR 397 TRF VS. CIT (SC) IN CIVIL APPEAL NO.5293 OF 2003. 7. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS O F LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD AND ALSO GONE THROUGH THE JUDGMENT AND DECIS IONS REFERRED AND RELIED ON BY THE PARTIES. THROUGH THIS APPEAL THE O NLY GRIEVANCE OF THE ASSESSEE IS AGAINST THE ACTION OF THE LD. CIT(A) CO NFIRMING THE BAD DEBTS OF RS. 19,11,282/-.WE OBSERVE THAT ASSESSEE HAS CLA IMED AN AMOUNT OF RS. 19,11,282/- ON ACCOUNT OF BAD DEBTS RELATING TO 14 PARTIES (LIST APPEARING AT PAGE 17 OF THE PAPER BOOK) FROM WHOM T HERE IS NO CHANCE OF RECOVERY OF DEBTS AND THE SAME WERE DEBITED TO THE PROFIT AND LOSS A/C AS BAD DEBTS. 9. BAD DEBTS ARE CLAIMED AS PER THE PROVISIONS OF S ECTION 36(1)(VII) OF THE ACT WHICH READS AS UNDER :- SEC.36. (1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOWING CLAUSES SHALL BE ALLOWE D IN RESPECT OF THE MATTERS DEALT WITH THEREIN, IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 ( VII ) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), THE AMOUNT OF [ANY BAD D EBT OR PART THEREOF WHICH IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF T HE ASSESSEE FOR THE PREVIOUS YEAR]: [ PROVIDED THAT IN THE CASE OF [AN ASSESSEE] TO WHICH CLAUSE ( VIIA ) APPLIES, THE AMOUNT OF THE DEDUCTION RELATING TO ANY SUCH DEBT OR PART THEREOF SHALL BE LIMITED TO THE AMOUNT BY WHICH SUCH DEBT OR PART THEREOF EXCEEDS THE CREDIT BALANCE IN THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNT MADE UNDER THAT CLAUSE.] [ EXPLANATION 1 ] . FOR THE PURPOSES OF THIS CLAUSE, ANY BAD DEBT OR PART THEREOF WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE S HALL NOT INCLUDE ANY PROVISION FOR BAD AND DOUBTFUL DEBTS MADE IN THE ACCOUNTS OF THE ASSESSEE;] ITA.NO.993/AHD/2008 - 5 [EXPLANATION 2. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIED THAT FOR THE PURPOSES OF THE PROVISO TO CLAUSE ( VII ) OF THIS SUB-SECTION AND CLAUSE ( V ) OF SUB- SECTION (2), THE ACCOUNT REFERRED TO THEREIN SHALL BE ONLY ONE ACCOUNT IN RESPECT OF PROVISION FOR BAD AND DOUBTFUL DEBTS UNDER CLAUSE ( VIIA ) AND SUCH ACCOUNT SHALL RELATE TO ALL TYPES OF ADVANCES, INCLUDING ADVANCES MADE BY RURAL BRANCHES; ] 10. WE FURTHER OBSERVE THAT AT THE BEGINNING OF THE PROVISIONS OF SECTION 36(1)(VII) IT STARTS WITH THE LINE SUBJECT TO THE PROVISIONS OF SUB- SECTION (2), SO IT WILL BE RELEVANT TO PRODUCE THE PROVISIONS O F SECTION 36(2) OF THE ACT WHICH READS AS UNDER :- SEC.36 (2) IN MAKING ANY DEDUCTION FOR A BAD DEBT OR PART THEREOF, THE FOLLOWING PROVISIONS SHALL APPLY [(I) NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS SUCH DEBT OR PART THEREOF HAS BE EN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARL IER PREVIOUS YEAR, OR REPRESENTS MONEY LENT IN THE ORDINARY COURSE OF THE BUSINESS OF BANKING OR MONEY-LENDING WHICH IS CARRIED ON BY THE ASSESSEE;] (II) IF THE AMOUNT ULTIMATELY RECOVERED ON ANY SUCH DEBT OR PART OF DEBT IS LESS THAN THE DIFFERENCE BETWEEN THE DEBT OR PART AND THE AMOUNT SO DEDUCTED, THE DEFI CIENCY SHALL BE DEDUCTIBLE IN THE PREVIOUS YEAR IN WHICH THE ULTIMATE RECOVERY IS MADE; (III) ANY SUCH DEBT OR PART OF DEBT MAY BE DEDUCTED IF IT HAS ALRE ADY BEEN WRITTEN OFF AS IRRECOVERABLE 92 IN THE ACCOUNTS OF AN EARLIER PREVIOUS YEAR [(BEING A PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEAR)], BUT THE [ASSESSING] OFFICER HAD NOT ALL OWED IT TO BE DEDUCTED ON THE GROUND THAT IT HAD NOT BEEN ESTABLISHED TO HAVE BECOME A BAD DEBT IN THAT YEAR; (IV) WHERE ANY SUCH DEBT OR PART OF DEBT IS WRITTEN OFF AS IRRECOVERABL E IN THE ACCOUNTS OF THE PREVIOUS YEAR [(BEING A PREVIOUS YEAR RELEVANT TO THE ASSESSME NT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEAR )] AND THE [ASSESSING] OFFICER IS SATISFIED THAT SUCH DEBT OR PART BECAME A BAD DEBT IN ANY EARLIER PREVIOUS YEAR NOT FALLING BEYOND A PERIOD OF FOUR PREVIOUS YEARS IM MEDIATELY PRECEDING THE PREVIOUS YEAR IN WHICH SUCH DEBT OR PART IS WRITTEN OFF, THE PROVISIONS OF SUB-SECTION (6) OF SECTION 155 SHALL APPLY; [(V) WHERE SUCH DEBT OR PART OF DEBT RELATES TO ADVANCES MADE BY AN ASSESSEE TO WHICH CLAUSE (VIIA) OF SUB-SECTION (1) APPLIES, NO SUCH DEDUCTION SHALL BE ALLOW ED UNLESS THE ASSESSEE HAS DEBITED THE AMOUNT OF SUCH DEBT OR PART OF DEBT IN THAT PREVIOUS YEAR TO THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNT MADE UNDER THAT CLAUSE.] ITA.NO.993/AHD/2008 - 6 11. FROM GOING THROUGH THE ABOVE PROVISIONS, WE OBS ERVE THAT THE ASSESSEE IS ENTITLED TO CLAIM BAD DEBTS WHICH ARE I RRECOVERABLE IF THEY HAVE BEEN CLAIMED BY THE ASSESSEE IN THE BOOKS OF A CCOUNT MAINTAINED BUT CERTAINLY RAIDER SEC.36(2)(I) OF THE ACT SAYS T HAT NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS THE SAME HAS BEEN TAKEN INT O ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOU S YEAR IN WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF. THEREFORE, FROM GOING THROUGH THE PROVISIONS OF SEC.36(1)(VII) R.W.S. 36( 2)(I) OF THE ACT FOLLOWING ARE THE REQUISITE CONDITIONS WHICH NEED T O BE ADHERED TO BY THE ASSESSEE FOR ALLOWANCE OF BAD DEBT:- I) IT MUST BE A DEBT OR PART THEREOF II) SUCH DEBT MUST BE IN THE REVENUE NATURE III) SUCH DEBT SHOULD BE IN RESPECT OF A BUSINESS WHICH IS CARRIED ON BY THE ASSESSEE IN THE RELEVANT ACCOUNTING YEAR. IV) SUCH DEBT MUST HAVE BEEN TAKEN INTO ACCOUNT IN COMP UTING THE INCOME OF THE ASSESSEE IN THE PREVIOUS YEAR OR IN E ARLIER YEAR AS A PART OF GROSS SALES/TURNOVER. V) SUCH DEBT MUST BE INCIDENTAL TO THE BUSINESS VI) SUCH DEBT MUST HAVE BEEN WRITTEN OFF AS IRRECOVERAB LE IN THE ACCOUNT OF THE ASSESSEE IN THE PREVIOUS YEAR. 12. WE FURTHER OBSERVE THAT HON. SUPREME COURT IN T HE CASE OF TRF VS. CIT (SUPRA) HAS HELD AS UNDER :- IN THESE APPEALS, WE ARE CONCERNED WITH ASSESSMENT YEAR 1990-1991 AND ASSESSMENT YEAR 1993-1994. PRIOR TO 1ST APRIL, 1989, EVERY ASSESSEE HAD T O ESTABLISH, AS A MATTER OF FACT, THAT THE DEBT ADVANCED BY THE ASSESSEE HAD, IN FACT, BECOME IRRECOVERABLE. THAT POSITION GOT ALTERED BY DELETION OF THE WORD E STABLISHED, WHICH EARLIER EXISTED IN SECTION 36(1)(VII) OF THE INCOME TAX ACT, 1961 [`ACT', FOR SHORT]. ITA.NO.993/AHD/2008 - 7 FOR THE SAKE OF CLARITY, WE RE-PRODUCE HEREINBELOW PROVISIONS OF SECT ION 36(1)(VII) OF THE ACT, BOTH PRIOR TO 1ST APRIL, 1989 AND POST-1ST APRIL, 1989: PRE-1 ST APRIL, 1989: OTHER DEDUCTIONS. 36.(1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOWING CLAUSES SHALL BE ALLOWED IN RESPECT OF THE MATTERS DE ALT WITH THEREIN, IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 (I) TO (VI) XXXX XXXX XXXX (VII) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), THE AMOUNT OF ANY DEBT, OR PART THEREOF, WHICH IS ESTABLISHED TO HAVE BECOME A BAD DEBT IN THE PREVIOUS YEAR. POST-1 ST APRIL, 1989: OTHER DEDUCTIONS. 36.(1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOWING CLAUSES SHA LL BE ALLOWED IN RESPECT OF THE MATTERS DEALT WITH THEREIN, IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 (I) TO (VI) XXXX XXXX XXXX (VII) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), THE AMOUNT OF ANY BAD D EBT OR PART THEREOF WHICH IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR. THIS POSITION IN LAW IS WELL-SETTLED. AFTER 1ST APRIL, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRR ECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. HOWEVER, IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT EXAM INED WHETHER THE DEBT HAS, IN FACT, BEEN WRITTEN OFF IN ACCOUNTS OF THE ASSESSEE. W HEN BAD DEBT OCCURS, THE BAD DEBT ACCOUNT IS DEBITED AND THE CUSTOMER'S ACCOUNT IS CREDITED, T HUS, CLOSING THE ACCOUNT OF THE CUSTOMER. IN THE CASE OF COMPANIES, THE PROVISION IS DE DUCTED FROM SUNDRY DEBTORS. AS STATED ABOVE, THE ASSESSING OFFICER HAS NOT EXA MINED WHETHER, IN FACT, THE BAD DEBT OR PART THEREOF IS WRITTEN OFF IN THE ACCOUNTS OF THE ASSESSEE. THIS EXERCISE HAS NOT BEEN UNDERTAKEN BY THE ASSESSING OFFICER. HENCE , THE MATTER IS ITA.NO.993/AHD/2008 - 8 REMITTED TO THE ASSESSING OFFICER FOR DE NOVO CONSIDERATION OF THE ABOVE-MENTIONED ASPECT ONLY AND THAT TOO ONLY TO THE EXTENT OF THE WRITE OFF. SUBJECT TO ABOVE, THE CIVIL APPEALS FILED BY THE ASSESSEE ARE DIS POSED OF WITH NO ORDER AS TO COSTS. 13. WE, THEREFORE, RESPECTFULLY FOLLOWING THE JUDGM ENT OF HON. APEX COURT IN THE CASE OF TRF VS. CIT (SUPRA) AND OUR D ISCUSSION MADE WITH REFERENCE TO THE PROVISIONS OF SECTION 36(1)(II) R. W.S 36(2)(I) OF THE ACT, ARE OF THE VIEW THAT ASSESSEE HAS BEEN ABLE TO PROV E THAT THE DEBTS WRITTEN OFF ARE REVENUE IN NATURE RELATING TO THE BUSINESS CARRIED ON BY THE ASSESSEE AND ARE INCIDENTAL THERETO AND HAVE BEEN W RITTEN OFF AS IRRECOVERABLE UNDER THE ACCOUNT OF THE ASSESSEE. HO WEVER, FROM THE AVAILABLE RECORDS, WE OBSERVE THAT ASSESSEE HAS NOT BEEN ABLE TO PLACE ON RECORD THE DETAILS SHOWING THAT THE DEBTS HAVE BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE MEANING THEREB Y THAT ASSESSEE NEEDED TO SUBMIT BEFORE THE ASSESSING OFFICER THE N ECESSARY DETAILS, EVIDENCING THE ACTUAL SALES MADE TO THE IMPUGNED 14 PARTIES WITH COPIES OF LEDGER ACCOUNT FOR THOSE YEARS WHEREIN THE AMOUN T OF SALES WERE DUE TO BE RECEIVED FROM THE IMPUGNED PARTIES AND WERE CATE GORIZED UNDER THE HEAD OF SUNDRY DEBTORS. 14. IT IS TRUE THAT AN ASSESSEE CAN CLAIM BAD DEBTS BY JUST WRITING OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE WITHO UT ESTABLISHING THAT THEY HAVE ACTUALLY BECOME BAD DEBTS OR NOT BUT IT I S INCUMBENT ON THE ASSESSEE TO AT LEAST PROVE THAT THE IMPUGNED BAD DE BTS HAVE FORMED PART OF INCOME OF THE ASSESSEE BEFORE BEING WRITTEN OFF. IN NORMAL COURSE OF BUSINESS DEBTS BECOME BAD AFTER LAPSE OF CERTAIN PE RIOD WHICH NORMALLY IS ITA.NO.993/AHD/2008 - 9 MORE THAN A YEAR AND IN SUCH SITUATION ASSESSEE, BE FORE WRITING OFF THE DEBT AS IRRECOVERABLE IN THE BOOKS OF ACCOUNTS SHOU LD NECESSARILY GATHER DOCUMENTS EVIDENCING THAT THE DEBTS WHICH ARE GOING TO BE WRITTEN OFF HAVE FORMED PART OF THE GROSS SALES/REVENUE/TOTAL T URNOVER AND HAVE BEEN SHOWN AS INCOME IN THE PREVIOUS YEAR OR EARLIER YEA RS AS THE CASE MAY BE. IN THE APPEAL BEFORE US, WE FIND THAT ASSESSEE HAS ONLY SUBMITTED A LIST OF 14 PARTIES OF WHOM THE DEBTS HAVE BEEN CLAIMED AS I RRECOVERABLE AND HAS BEEN WRITTEN OFF BUT THERE IS NO OTHER DETAIL EVIDE NCING THE NATURE OF TRANSACTION, WHEN THEY HAVE BEEN ENTERED INTO AND W HETHER THEY WERE PART OF THE GROSS SALES OF THE ASSESSEE, WHICH IS BARE N ECESSARY TO SATISFY THE CONDITIONS LAID DOWN IN SECTION 36(2)(I) OF THE ACT . THEREFORE, WE DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FILE OF LD. A SSESSING OFFICER TO EXAMINE THIS ASPECT AS PER OUR OBSERVATIONS MADE AB OVE AFTER GIVING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE FOR PLACING NECESSARY RECORDS BEFORE HIM AND THEN PASS AN ORDER ON THE ISSUE. THIS GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPO SES. 15. OTHER GROUNDS ARE OF GENERAL NATURE, WHICH NEED S NO ADJUDICATION. 16. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 2 ND JUNE, 2016 AT AHMEDABAD. SD/- SD/- (R.P. TOLANI) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED, 02/06/2016 ITA.NO.993/AHD/2008 - 10 ! '!/ COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &$% / THE RESPONDENT. 3. '(( ) * / CONCERNED CIT 4. ) * ( ) / THE CIT(A)- 5. !-. , ,012 /DR,ITAT, AHMEDABAD, 6. .3 45 / GUARD FILE. ) ' / BY ORDER, ' (0 (ASSTT.REGISTRAR) ITAT, AHMEDABAD 1. DATE OF DICTATION .. : 30/05/2016. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : 1/06/2016 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FO R PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2/6 /16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATUR E ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER
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