Appeal details
Counselvise Citation
[2011] 140 COUNSELVISE.COM (IT) 51848 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 9 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
15-09-2011
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
C
Assessment Year
2007-2008
Appeal Filed On
06-06-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER ITA NO.992(MDS)/2011 ASSESSMENT YEAR: 2007-08 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE V(1), CHENNAI. VS. M/S. PATERSON SECURITIES PVT. LTD., 48-SECOND LINE BEACH, CHENNAI600 001. PAN AAACP4386P. (APPELLANT) (RESPONDENT) APPELLANT BY : DR. I.V IJAYAKUMAR, IRS, CIT-DR. RESPONDENT BY : SHRI Y.SRID HAR, C.A. DATE OF HEARING : 14 TH SEPTEMBER, 2011 DATE OF PRONOUNCEMENT : 15 TH SEPTEMBER, 2011 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2007-08. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-V AT CHENNAI - - ITA NO.992 OF 2011 2 DATED 30-3-2011. THE APPEAL ARISES OUT OF THE ASSE SSMENT COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX AC T, 1961. 2. THE FIRST GROUND RAISED BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DE LETING THE ADDITION OF ` 10,57,223/- MADE ON ACCOUNT OF DISALLOWANCE OF BAD DEBT CLAIMED BY THE ASSESSEE. IT IS SEEN THAT THE RELEVANT PARTICULARS WERE NOT FURNISHED BY THE ASSESSEE BEFO RE THE ASSESSING AUTHORITY. IT IS STATED THAT THE DETAILS WERE FURNISHED BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS). BU T WHEN WE ASKED FOR THE DETAILS, THE ASSESSEE WAS NOT IN A PO SITION TO PRODUCE THE SAME. WE FIND THAT THERE IS SUBSTANCE IN THE ARGUMENT OF THE REVENUE THAT THE ASSESSING OFFICER HAD NO OPPORTUNITY TO EXAMINE THE DETAILS AND PARTICULARS OF THE CLAIM MADE BY THE ASSESSEE BY WAY OF BAD DEBT. THEREFORE , THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) ON THIS POINT IS SET ASIDE AND THE MATTER IS REMITTED BACK TO THE ASSESS ING OFFICER FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW. THE AS SESSEE SHALL BE GIVEN AN EFFECTIVE OPPORTUNITY OF BEING HEARD. - - ITA NO.992 OF 2011 3 3. THE SECOND GROUND RAISED BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED I N DIRECTING THE ASSESSING OFFICER TO DISALLOW ONLY 2% OF THE EX EMPT INCOME UNDER SECTION 14A OF THE ACT. THE ASSESSING OFFICE R HAS COMPUTED THE DISALLOWANCE UNDER RULE 8D. THE COMMI SSIONER OF INCOME-TAX(APPEALS) HAS RIGHTLY HELD THAT THE SA ID RULE DOES NOT HAVE ANY RETROSPECTIVE OPERATION AND, THEREFORE , IS NOT APPLICABLE TO THE IMPUGNED ASSESSMENT YEAR 2007-08. THEREFORE, THE ACTION OF THE COMMISSIONER OF INCOME - TAX(APPEALS) IN DELETING THE DISALLOWANCE MADE BY T HE ASSESSING AUTHORITY IS JUSTIFIED. 4. BUT, ALTERNATIVELY, THE COMMISSIONER OF INCOME- TAX(APPEALS) HAS MADE AN ESTIMATED DISALLOWANCE OF 2%. WE ARE OF THE OPINION THAT THE QUANTUM OF DISALLOWANCE MADE BY THE COMMISSIONER OF INCOME-TAX(APPEALS) ON ESTIMATE BAS IS IS TOO LOW. WE INCREASE THE DISALLOWANCE TO 5% OF THE EXE MPTED INCOME. THIS POINT IS DECIDED IN FAVOUR OF THE REV ENUE. - - ITA NO.992 OF 2011 4 5. IN RESULT THIS APPEAL FILED BY THE REVENUE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 15 TH OF SEPTEMBER, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 15 TH SEPTEMBER, 2011. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.
