M/s J.J. Glastronics Private Limited, Bangalore V. ITO, Bangalore

ITA 991/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1490 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO CITI
• Keywords: Bad and doubtful debts
• Section: 10B

Judgement Text

PAGE 1 OF 3 ITA NO.991/BANG/2010 1 IN THE INOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE DR. O K NARAYANAN, VICE PRESIDENT AND SMT. P MADHAVI DEVI, J.M. ITA NO.991/BANG/2010 (ASST. YEAR 2006-07) M/S J J GLASTRONICS PRIVATE LIMITED, NO.26-B, ELECTRONIC CITY, 18 TH KM, HOSUR ROAD, BANGALORE-560 100. -APPELLANT VS THE INCOME TAX OFFICER, WARD-11(2), BANGALORE. - RESPONDENT APPELLANT BY : SMT. SHEETAL, ADVOCATE RESPONDENT BY : SHRI G V GOPALA RAO, CIT-I O R D E R PER P MADHAVI DEVI : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT-I, BANGALORE DATED 08.06.2010 FOR THE ASST. YEAR 2006-07. 2. IN THIS APPEAL, THE ASSESSEES ONLY GRIEVANCE I S THAT THE CIT(A) HAS ERRED IN NOT ACCEPTING THE SUBMISSION OF THE ASSESSEE AND HOLDING THAT WHEN THE EXPORT TURNOVER IS REDUCE D, EVEN THE TOTAL TURNOVER IS REQUIRED TO BE REDUCED BEFORE ALL OWING THE DEDUCTION U/S 10B OF THE I T ACT. PAGE 2 OF 3 ITA NO.991/BANG/2010 2 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED IN FA VOUR OF THE ASSESSEE BY THE DECISION OF THE SPECIAL BENCH OF TRI BUNAL IN THE CASE OF ITO V SAK SOFT LTD. 313 ITR (AT) 353 AND TH EREFORE, THE APPEAL IS TO BE ALLOWED. 4. THE LEARNED DR, WHILE SUPPORTING THE ORDERS OF THE AUTHORITIES BELOW, SUBMITTED THAT THE ASSESSEE, WHI LE COMPUTING THE DEDUCTION U/S 10B OF THE I T ACT, HAS REDUCED T HE BAD DEBTS WRITTEN OFF ALSO FROM THE EXPORT TURNOVER, WHICH IS IN NO WAY CONNECTED WITH THE EXPORT ACTIVITY OF THE ASSESSEE. HE SUBMITTED THAT THIS AMOUNT IS TO BE REDUCED FROM THE INCOME F ROM BUSINESS OR PROFESSION AND NOT FROM THE EXPORT TURNOVER. 5. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS, WE AGREE WITH THE CONTENTION OF THE LEARNED DR THAT BAD DEBTS WRITTEN OFF CANNOT BE REDUCED FRO M THE EXPORT TURNOVER, AS IT HAS NO RELATION TO THE EXPORT ACTIV ITY. THEREFORE, THE ASSESSEE HAS TO ADD BACK THE BAD DEBTS WRITTEN OFF ALSO TO THE EXPORT TURNOVER. AS REGARDS THE OTHER THREE COMPO NENTS, WHICH HAVE BEEN REDUCED FROM THE EXPORT TURNOVER, FOLLOWI NG THE DECISION OF THE SPECIAL BENCH IN THE CASE OF SAK SOFT LTD. ( CITED SUPRA), WE HOLD THAT THEY WILL HAVE TO BE REDUCED FROM THE TOT AL TURNOVER ALSO. THEREAFTER, THE ASSESSEE WILL HAVE TO SET OFF THE B AD DEBTS WRITTEN OFF FROM THE INCOME FROM BUSINESS OR PROFESSION A ND COMPUTE THE TAXABLE INCOME. THE ASSESSEE IS DIRECTED TO FILE T HE COMPUTATION OF PAGE 3 OF 3 ITA NO.991/BANG/2010 3 INCOME ON THE ABOVE LINES AND THE AO SHALL THEN COM PUTE THE INCOME OF THE ASSESSEE IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED ON TUESDAY, THE 15 TH DAY OF MARCH, 2011 AT BANGALORE. SD/- SD/- (DR. O K NARAYANAN) (P MADHAVI DE VI) VICE PRESIDENT JUDICIAL MEMBER COPY TO : 1) THE ASSESSEE (2) THE REVENUE (3) THE CIT(A) CONCERNED. (4) THE CIT CONCERNED. (5) THE DR (6) GUARD FILE. MSP/15.3. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.