Sh. Rishi Sukhija, Chandigarh V. DCIT, Chandigarh

ITA 943/CHANDI/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51589 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 23-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Reasonable cause; Bad and doubtful debts
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL:B BENCH: CHA NDIGARH BEFORE SHRI H.L.KARWA, VP & SHRI D K SRIVASTAVA, AM ITA NO. 943/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI RISHI SUKHIJA, V DCIT, CIRCLE 5(1), PROP. M/S HARMONY ADVERTISING CHANDIGARH. & MARKETING, 2269, AASTHA APARTMENTS, SECTOR 48-C, CHANDIGARH. PAN: AVSPS-6564L APPELLANT BY: SHRI TEJ MOHAN SINGH RESPONDENT BY: SMT.JAISHREE SHARMA DATE OF HEARING : 30.11.2011 DATE OF PRONOUNCEMENT : 30.11.2011 ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 7.6.2011 ON THE FOLLOWING GROUNDS : 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS.139675/- MADE BY APPLY ING THE PROVISIONS OF SECTION 40A(3) OF THE ACT WHICH I S ILLEGAL, ARBITRARY AND UNJUSTIFIED. 2. THAT THE LD. CIT(A) HAS ERRED IN NOT APPRECIATI NG THE REASONABLE CAUSE FOR MAKING PAYMENTS OTHERWISE THAN BY CROSSED CHEQUES IN THE CORRECT PERSPECTIVE AND AS S UCH THE ORDER PASSED IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE LD. CIT(A) HAS FURTHER ERRED IN SUSTAIN ING AN ADDITION OF RS.48000/- AS AGAINST RS.60000/- MADE B Y THE AO ON ACCOUNT OF ALLEGED LOW HOUSEHOLD WITHDRAWALS WHICH IS ARBITRARY AND UNJUSTIFIED. 4. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDI NG AN ADDITION OF RS.21029/- MADE ON ACCOUNT OF DISALLOWA NCE OF BAD DEBTS WHICH IS ARBITRARY AND UNJUSTIFIED. 2. APROPOS GROUND NOS. 1 & 2, THE LD. COUNSEL FOR T HE ASSESSEE FAIRLY SUBMITTED THAT THE IMPUGNED PAYMENTS EXCEEDING RS.2 0,000/- WERE MADE IN CASH IN THE YEAR UNDER APPEAL AND THE CASE OF THE ASSESSEE WAS NOT COVERED BY ANY OF THE EXCEPTIONS OF RULE 6DD OF THE INCOME TAX RULES. IN THIS VIEW OF THE MATTER, THE ORDER OF TH E CIT(A) IN THISBEHALF IS AFFIRMED. GROUND NOS. 1 & 2 ARE DISMISSED. ITA 943 /CHD/2011 SHRI RISHI SUKHIJA, CHANDIGARH 2 3. APROPOS GROUND NO.3, THE LD. COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE ASSESSEE WAS UNMARRIED AND WAS LIVING WITH HIS FATHER AND THEREFORE, THE ORDER OF THE CIT(A) SUSTAINING ADDIT ION TO THE EXTENT OF RS.48,000/- MAY SUITABLY BE REDUCED. ON CAREFUL CO NSIDERATION OF THE SUBMISSIONS MADE BY BOTH THE PARTIES, THE ADDITION MADE IN THIS BEHALF IS REDUCED TO RS.24,000/-. GROUND NO.3 IS PARTLY A LLOWED. 4. APROPOS GROUND NO.4, LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT AN ASSESSEE CAN CLAIM DEDUCTION IN RESPECT OF BAD D EBTS AFTER WRITING OF THE SAME IN THE BOOKS OF ACCOUNT IN VIEW OF THE JUD GEMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V PALANI A NDAVAR COTTON & SYNTHETIC SPINNERS LTD. 317 ITR 6 (ST.), CIT V RAJE NDRA Y.SHAH, 313 ITR 3 (ST.) AND CIT V PRIME FOCUS, 322 ITR 2 (ST.) THE LD. COUNSEL FOR THE ASSESSEE IS RIGHT IN HIS SUBMISSION THAT MERE WRITE -OFF OF BAD DEBTS IN THE BOOKS OF ACCOUNT IS SUFFICIENT FOR CLAIMING DED UCTION U/S 36(1)(VII) OF THE INCOME-TAX ACT. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS WRITTEN- OFF THE IMPUGNED SUM AS BAD DEBT IN HIS BOOKS OF AC COUNT. IN THIS VIEW OF THE MATTER, GROUND NO.4 IS ALLOWED. 5. APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 30 TH NOV.,2011. SD/- SD/- (H.L.KARWA) (D K SRIVAS TAVA) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 30 TH NOV.,2011 POONAM COPY TO: 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH ASSISTANT REGISTRAR, ITAT, CHANDIGARH