Mudra Finvest Guj.) Ltd., Ahmedabad V. The Income tax Officer,Ward-4(4), Ahmedabad

MA 306/AHD/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4590 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-04-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 07-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C
• Assessee Lawyers: R B RATHI
• Keywords: Rectification of order; Bad and doubtful debts

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE S/SHRI T.K. SHARMA, JM AND D.C.AGRAWAL, AM MUNDRA FINVEST (GUJ) LTD., C/O R.B. TATHI & CO., 15, NEW CLOTH MARKET, AHMEDABAD. V/S . INCOME-TAX OFFICER, WARD 4(1), AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI R. B. RATHI, AR RESPONDENT BY:- SHRI M. C. PANDIT, SR.DR O R D E R PER D.C.AGRAWAL, ACCOUNTANT MEMBER. THIS IS A MISCELLANEOUS APPLICATION FILED BY THE A SSESSEE AGAINST THE ORDER OF TRIBUNAL IN ITA NO.1859/AHD/2007 PRONO UNCED ON 3 RD JULY, 2009. 2. THE ASSESSEE HAD CLAIMED BAD DEBTS OF RS.85,748/ - WHICH WERE DISALLOWED BY THE AO AND THE LD. CIT(A). THIS ORDE R OF THE LD. CIT(A) WAS CONFIRMED BY THE TRIBUNAL BY HOLDING THAT PROVI SIONS OF SECTION 36(2) DOES NOT PERMIT SUCH ALLOWANCE. THE ASSESSEE IS FOU ND TO BE ENGAGED IN THE BUSINESS OF FINANCING AND CHEQUE DISCOUNTING AN D EARNING COMMISSION ON SUCH CHEQUE DISCOUNTING. IT WAS CLAIM ED BY THE ASSESSEE THAT A SUM OF RS.85/- AS COMMISSION ON DISCOUNT OF CHEQUE WAS EARNED AND DECLARED IN THE RETURN OF INCOME WHICH RELATED TO THE CHEQUE AMOUNT M.A. NO.306/AHD/2009 ARISING OUT OF ITA NO.1859/AHD/2007 ASST. YEAR :2004-05 2 OF RS.85,748/-. THE MONEY COULD NOT BE RECOVERED FR OM ONE SHRI VINAYAK CO., MUMBAI AND HENCE IT WAS CLAIMED AS A BAD DEBT. THE TRIBUNAL IN THIS REGARD HELD AS UNDER :- 11. AFTER CONSIDERING RIVAL SUBMISSION, WE DECLINE TO INTERFERE MAINLY BECAUSE THE ASSESSEE IS NOT DOING ANY BANKING BUSINESS. IT IS N OT PROVED THAT THE DEBT HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE A SSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT OF SUCH DEBT WAS WRITTEN OFF OR OF EARLIER YEAR. IT ALSO DOES NOT REPRESENT MONEY LEND IN THE ORDINARY COURSE OF THE BUSINESS OF BANKING OR MONEY LENDING. THE ASSESSEE IS NOT CARRYING ON BUSINESS O F MONEY LENDING AND CHEQUE DISCOUNTING AND EARNING COMMISSION THEREON CANNOT B E TREATED AS EQUIVALENT TO MONEY LENDING BUSINESS. THUS, THE LEARNED CIT(A) IS LEGALLY CORRECT TO HOLD THAT IT IS A CAPITAL LOSS TO THE ASSESSEE AND THEREFORE THE SAME CANNOT BE ALLOWED AS BAD DEBT. THIS GROUND OF THE ASSESSEE IS DISMISSED. THUS THE CLAIM OF THE ASSESSEE WAS DISALLOWED. IN T HE MISC. APPLICATION FILED, THE ASSESSEE SUBMITTED THAT THE BUSINESS OF THE ASSESSEE IS CHEQUE DISCOUNTING AND NOT MONEY LENDING. IN THE BUSINESS OF THE ASSESSEE BOTH THE PARTIES ARE EXCHANGING CHEQUES TO EACH OTHER. E XCHANGE OF CHEQUE IS A REGULAR FEATURE OF BUSINESS. THEREFORE, WHAT IS LOS T, IS MONEY ADVANCED IN THE ORDINARY COURSE OF BUSINESS AGAINST CHEQUES ON WHICH IT HAD CHARGED COMMISSION WHICH WERE DECLARED IN THE PROFIT AND LO SS ACCOUNT. 3. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE TRI BUNAL HAS APPRECIATED THE FACTS AND HELD THAT IT IS A CAPITAL LOSS AND NO LOSS OF DEBT IS INCURRED IN THE ORDINARY COURSE OF BUSINESS. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THERE IS NO CASE FOR ANY RECTIFICATION. AFTER APPRE CIATING THE FACTS OF THE CASE, IT WAS HELD BY THE TRIBUNAL THAT IT IS NOT PR OVED THAT THE DEBT WAS TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE A SSESSEE OF THE PREVIOUS YEAR, IN WHICH THE AMOUNT OF SUCH DEBT WAS WRITTEN OFF OR OF EARLIER YEARS. IT WAS ALSO NOT THE AMOUNT LENT IN T HE ORDINARY COURSE OF 3 BUSINESS OF BANKING OR MONEY LENDING. IF THE CONTEN TION OF THE LD. AR IS ACCEPTED THEN IT WILL AMOUNT TO REVIEW THE ORDER OF THE TRIBUNAL WHICH IS BEYOND THE SCOPE OF SECTION 254(2). HON. MADRAS HIG H COURT IN EXPRESS NEWSPAPER LTD. VS. DCIT (2010) 320 ITR 12 (MAD) HEL D THAT POWER OF TRIBUNAL TO RECTIFY ITS ORDER IS IN RESPECT OF OBVI OUS MISTAKES WHICH ARE PATENT, MANIFEST AND SELF-EVIDENT AND WHICH DO NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMENTS TO ESTABLISH IT . SECTION 254(2) DOES NOT CONFER POWER ON THE TRIBUNAL TO REVIEW ITS ORDE R UNDER THE GARB OF RECTIFICATION OF MISTAKE. A PARTY CANNOT TAKE A CHA NCE TO RE-ARGUE THE APPEAL ALREADY DECIDED. IN RESPECT OF THE CLAIM MAD E BY THE ASSESSEE ALL THE CONTENTIONS RAISED AND ARGUED BY BOTH THE PARTI ES WERE ELABORATELY DISCUSSED AND A FINDING WAS ULTIMATELY RECORDED. A CLEAR ADJUDICATION HAS BEEN MADE. THEREFORE, THERE IS NO MERIT IN THE MISC . APPLICATION FILED BY THE ASSESSEE AND THE SAME IS REJECTED. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS REJECTED. SD/- SD/- (T.K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 23/4/2010 MAHATA/- ORDER PRONOUNCED IN OPEN COURT ON 23/4/2010 4 COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD