DANIEL MEASUREMENT & CONTROL(i) P.LTD., Baroda V. THE DCIT.,CIRCLE.1(1), Baroda

MA 58/AHD/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8504 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 23-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J P SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND SHRI T.R. MEENA, ACCOUNTANT MEMBER M.A. NO.58/AHD/2012 (ARISING OUT OF ITA NO. 1161/AHD/2009) ASSESSMENT YEAR :2004-05 DANIEL MEASUREMENT & CONTROL (INDIA) PVT. LIMITED (NOW KNOWN AS ADVANCED SYSTEK PVT LTD) 299/300, GIDC ESTATE, BEHIND NOVINO BATTERY, MAKARPURA, BARODA V/S . DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), BARODA. PAN NO. A AB CD3608F (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI J. P. SHAH, A.R. /BY RESPONDENT SHRI SAMIR TEKRIWAL, SR. D.R /DATE OF HEARING 15.06.2012 /DATE OF PRONOUNCEMENT 22.06.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS M.A. IS FILED BY THE ASSESSEE AGAINST THE TRIB UNALS ORDER DATED 02.03.2012. THE A BENCH OF ITAT, AHMEDABAD, HAD PASSED ORDER ON 02.03.2012 IN CASE OF ASSESSEE IN ITA NO.1161/AHD/2 009 FOR A.Y.2004-05. THE FACTS OF THE CASE ARE THAT THE REVENUE FILED TH E APPEAL AGAINST THE ORDER M.A. NO. 58/AHD/2012 ARISING OUT OF ITA NO. 1161/A/2009A.Y.2004-05 PAGE 2 OF CIT(A)-V, BARODA, DATED 03.12.2008 IN WHICH SIX GROUNDS OF APPEAL WERE RAISED BY THE REVENUE. ALL THE GROUNDS WERE CONSID ERED BY THE BENCH IN ABOVE DATED ORDER, HOWEVER, THE ASSESSEE HAS FILED MISCELLANEOUS APPLICATION NO.58/A/2012, THE ASSESSEE HAS RAISED FOLLOWING GRO UNDS:- 1. D BENCH OF THE TRIBUNAL DISPOSED OFF THE ABO VE APPEAL BY THEIR ORDER DATED 02.03.2012 (EXHIBIT-A). THE FOLLOWING APPARENT ERROR IS THERE IN THE ORDER: (I) ON GROUND NO.3, THE DIRECT SUPREME COURT DECISI ON IN T.R.F. LIMITED VS. COMMISSIONER OF INCOME TAX (2010) 323 ITR 397 (SC) WAS CITED. THIS HAS NOT BEEN CONSIDERED WITH THE RESULT, AN APPARENT ERROR HAS COME TO BE COMMITTED. IN THIS D ECISION, SUPREME COURT HELD; AFTER APRIL 1, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, H AS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRI TTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. 2. THE APPLICANT MOST HUMBLY PRAYS THAT BOTH THE AB OVE APPARENT ERROR MAY KINDLY BE RECTIFIED IN THE INTER EST OF JUSTICE, FOR WHICH ACT OF KINDNESS THE APPLICANT SHALL FOREVER PRAY AN D REMAIN GRATEFUL. 2. THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED THAT HONBLE THE APEX COURT DECISION IN CASE OF T.R.F. LTD. VS. CIT (2010) 323 ITR 0397 DATED 09.02.2010 HAD NOT BEEN CONSIDERED BY THE HONBLE B ENCH. HE DRAWS OUR ATTENTION ON THE WORDING OF THE JUDGMENT WHICH SPEL T OUT ABOUT LAW POSITION M.A. NO. 58/AHD/2012 ARISING OUT OF ITA NO. 1161/A/2009A.Y.2004-05 PAGE 3 PRE-APRIL,1,1989 AND POST-APRIL, 1, 1989 AND ALSO T O THE CONCLUSION PART OF THE JUDGMENT WHICH IS REPRODUCED FOR THE SAKE OF CONVEN IENCE AS UNDER:- HEARD LEARNED COUNSEL ON BOTH SIDES. IN THESE APPEALS, WE ARE CONCERNED WITH THE ASSESSM ENT YEAR 1990-91 AND THE ASSESSMENT YEAR 1993-94. PRIOR TO APRIL 1, 1989, EVERY ASSESSEE HAD TO ESTABLISH, AS A MATTER OF FACT, THA T THE DEBT ADVANCED BY THE ASSESSEE HAD, IN FACT, BECOME IRRECOVERABLE. THAT POSITION GOT ALTERED BY DELETION OF THE WORD ESTABLISHED, WHIC H EARLIER EXISTED IN SECTION 36(1)(VII) OF THE INCOME-TAX ACT, 1961 (TH E ACT, FOR SHORT). FOR THE SAKE OF CLARITY, WE REPRODUCE HEREIN BELOW THE PROVISIONS OF SECTION 36(1)(VII) OF THE ACT, BOTH PRIOR TO APRIL 1, 1989 AND POST-APRIL, 1989: PRE-APRIL 1, 1989: 36. OTHER DEDUCTION.-(1) THE DEDUCTIONS PROVIDED FO R IN THE FOLLOWING CLAUSES SHALL BE ALLOWED 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 DEBT, OR PART THEREOF, WHICH IS ESTABLISHED TO HAVE BECOM E A BAD DEBT IN THE PREVIOUS YEAR. POST-APRIL 1, 1989: 36. OTHER DEDUCTIONS.-(1) THE DEDUCTIONS PROVIDED F OR IN THE FOLLOWING CLAUSES SHALL BE ALLOWED 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 DEBT OR PART THEREOF WHICH IS WRITTEN OFF AS IRRECO VERABLE IN THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR. M.A. NO. 58/AHD/2012 ARISING OUT OF ITA NO. 1161/A/2009A.Y.2004-05 PAGE 4 THIS POSITION IN LAW IS WELL-SETTLED. AFTER APRIL 1, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DE BT, IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. HOW EVER, IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT EXAMINED WHETHE R THE DEBT HAS, IN FACT, BEEN WRITTEN OFF IN THE ACCOUNTS OF THE ASSES SEE. WHEN A BAD DEBT OCCURS, THE BAD DEBT ACCOUNT IS DEBITED AND THE CUS TOMERS ACCOUNT IS CREDITED, THUS, CLOSING THE ACCOUNT OF THE CUSTOMER . IN THE CASE OF COMPANIES, THE PROVISION IS DEDUCTED FROM SUNDRY DE BTORS. AS STATED ABOVE, THE ASSESSING OFFICER HAS NOT EXAMINED WHETH ER, 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 O FFICER. HENCE, THE MATTER IS REMITTED TO THE ASSESSING OFFICER FOR DE NOVO CONSIDERATION OF THE ABOVEMENTIONED ASPECT ONLY AND THAT TOO ONLY TO THE EXTENT OF THE WRITE-OFF. SUBJECT TO ABOVE, THE CIVIL APPEALS FILED BY THE AS SESSEE ARE DISPOSED OF WITH NO ORDER AS TO COSTS. 3. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT THE RE WAS A WORD ESTABLISHED HAD BEEN THERE IN PRE-APRIL 1, 1989, LAW AFTER POST-APRIL, 1989, THE ESTABLISHED WORD HAS NOT BEEN FOUND PLACE IN THE STATUTE. THE INTENTION OF THE LAW MAKER IS CLEAR THAT ONLY ASSESSEE HAS TO WRITTEN OFF THE DEBT AS IRRECOVERABLE IN BOOKS OF ACCOUNT AND BEYOND THIS N OTHING IS REQUIRED AS PER LATEST LEGAL POSITION ON THIS ISSUE. THEREFORE, HE PRAYED TO RE-CONSIDER THE ABOVE JUDGMENT. ANOTHER SIDE, THE LD. D.R. HAS VEH EMENTLY DRAWN OUR ATTENTION ON PARAGRAPH NO.12 ON PAGE NO.7 OF ABOVE ORDER THAT THE ASSESSEE HAS SHOWN CLOSING BALANCE OF RS.25,00,000/- EVEN AF TER WRITTEN OF AN AMOUNT M.A. NO. 58/AHD/2012 ARISING OUT OF ITA NO. 1161/A/2009A.Y.2004-05 PAGE 5 OF RS.1,07,67,742/-. IN THE SUBSEQUENT YEAR, THE G CPTCL HAD PAID APPROXIMATELY RS.65 LAKHS TO THE ASSESSEE AND ALSO DEBITED A SUM OF RS.40 LAKHS IN FINANCIAL YEAR 2004-05 IN THE ACCOUNTS OF THE GCPTCL AND CLAIMED THAT THE DECISION DELIVERED BY THE HONBLE A BENC H IS IN THE RIGHT PROSPECTUS. THEREFORE, M.A. IS NOT MAINTAINABLE. 4. WE HAVE PERUSED OUR ORDER DATED 02.03.2012 IN CA SE OF THE ASSESSEE AND ALSO HEARD BOTH THE SIDES AND GONE THROUGH HON BLE APEX COURT DECISION IN CASE OF T.R.F. LTD. VS. CIT (SUPRA). WE CONSIDER THAT RATIO OF DECISION OF HONBLE APEX COURT IN CASE OF T.R.F. LTD. VS. CIT (SUPRA) HAS TO BE CONSIDERED IN THE LIGHT OF THE FACT OF THE CASE OF THE ASSESSEE. THIS ASPECT WAS LEFT INADVERTENTLY IN THE IMPUGNED ORDER OF THE TRIBUNAL, WHICH NEEDS THE HEARING OF THE ISSUE FROM BOTH SIDES. ACCORDINGLY WE HOLD THAT IT SHALL BE IN THE INTEREST OF THE JUSTICE TO RECALL THE IMPUGNED ORDER OF THE TRIBUNAL TO THE EXTENT OF GROUND NO.4 OF APPEAL ONLY AND THE REGIST RY IS DIRECTED TO FIX THE APPEAL TO THE EXTENT OF GROUND NO.4 IN DUE COURSE. 5. IN THE RESULT, THE M.A. IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT M.A. NO. 58/AHD/2012 ARISING OUT OF ITA NO. 1161/A/2009A.Y.2004-05 PAGE 6 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ; STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 18.06.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 19.06.2012 4) DATE OF CORRECTION ,, ,, 5) DATE OF FURTHER CORRECTION ,, ,, 6) DATE OF INITIAL SIGN BY MEMBERS 7) ORDER UPLOADED ON 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON