Smt. Rajkumari Ramshakti Sheth, Ahmedabad V. The Income Tax Officer, Ward-11(4), Ahmedabad

MA 60/AHD/2015

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5275 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 06-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SMT. RAJKUMARI RAMSHAKTI SHETH, PROP. RAMRAJ ASSOCIATES , 126, NEW CLOTH MARKET, O/S RAIPUR GATE, AHMEDABAD - 380001 PAN: ADIPR4260N (APPELLANT) VS THE ITO, WARD - 11(4), AHMEDABAD (RESPONDENT) R EVENUE BY : S H RI ROOP CHAND , SR. D . R. ASSESSEE BY: MS. URVASHI SHODHAN , A.R. DATE OF HEARING : 20 - 01 - 2 017 DATE OF PRONOUNCEMENT : 03 - 03 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THE M.A. IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 25 - 06 - 2015 IN RESPECT OF ITA NO. 2481/AHD/2011 FOR A.Y. 2008 - 09. M.A. NO. 60/AHD/2015 ( I T A NO . 2481 / A HD/20 11) A SSESSMENT YEAR 200 8 - 09 M.A. NO. 60/AHD/2015 (IN I.T.A NO.2481 / AHD/2011) A.Y. 2008 - 09 PAGE NO SMT. RAJKUMARI RAMSHAKTI SHETH VS. ITO 2 2. THE ASSESSEE VIDE ITS MA APPLICATION DATED 30.07.2015 HAS STATED AS FOLLOWS: - 1. THE PRESENT APPLICATION IS FILED BY THE APPLICANT/APPELLANT ABOVE NAMED FOR SETTING ASIDE THE ORDER DATED 25/06/2015 PASSED BY THIS HON'BLE ITAT BY DISMISSING THE APPEAL FILED BY THE APPLICANT (ORIGINAL APPELLANT). IT IS MOST RESPECTFULLY SUBMITTED TH AT IN THE SAID ORDER OF THE HON'BLE ITAT, THERE IS ERROR APPARENT ON THE RECORD. 2. HON'BLE ITAT AFTER NOTING SUBMISSIONS OF THE COUNSEL OF THE APPLICANT ON DISALLOWANCE OF CLAIM OF BAD DEBTS ADJUDICATED THE ISSUE IN PARA 7 ON PAGE 4 OF THE ORDER AS UNDER 'WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE CLAIM OF BAD DEBTS. WITH RESPECT TO THE AMOUNT LENT TO KANTILAL HASTIMAL (RS. 3,55,000/ - WHICH WAS WRITTEN OFF DURING TH E YEAR) IT IS ASSESSEE'S CONTENTION THAT THE AMOUNT WAS LENT IN EARLIER YEARS IN THE COURSE OF MONEY LENDING ACTIVITY OF THE ASSESSEE AND DESPITE THE EFFORTS MADE BY THE ASSESSEE FOR THE RECOVERY OF AMOUNT AND ON FAILURE OF THE ASSESSEE TO RECOVER THE AMOU NT, THE AMOUNT HAS BEEN WRITTEN OFF AS BAD DEBTS. ON THE OTHER HAND WHILE UPHOLDING THE ACTION OF A.O. IT IS CIT (A)'S FINDING THAT THOUGH THE NAME OF KANTILAL HASTIMAL WAS APPEARING IN THE BALANCE SHEET BUT NO INTEREST FROM THE AMOUNT LENT WAS CREDITED TO THE INCOME ACCOUNT. BEFORE US, THE ID. A.R. HAS PLACED ON RECORD, THE TRANSLATED COPY OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF EARLIER YEARS TO SUPPORT THE CONTENTION THAT THE ASSESSEE WAS INDEED ENGAGED IN MONEY LENDING ACTIVITY IN PAST AND HAD SHOWN THE INTEREST INCOME IN THE RETURN OF INCOME. FROM THE TRANSLATED COPY OF BALANCE SHEET PLACED ON RECORD (WHICH ARE DULY CERTIFIED BY ID. A.R.), IT IS SEEN THAT ASSESSEE ON THE ASSET SIDE OF THE BALANCE SHEET HAS SHOWN AMOUNT DUE FROM KANTILAL HASTIMA L OF RS. 3,55,000 (AS ON 31.03.2002 PAPER BOOK PAGE 75), RS. 65,00,000 (AS ON 31.03.2001 PAPER BOOK PAGE 79) AND RS. 2,50,000/ - (AS ON 31.03.2000 PAPER BOOK PAGE 84). ASSESSEE HAS ALSO PLACED ON RECORD THE TRANSLATED COPY OF INTEREST ACCOUNT OF EARLIER YEA RS I.E. FOR F Y 98 - 99, 99 - 2000, 2000 - 01 & 2001 - 02. THE PERUSAL OF THE INTEREST ACCOUNT OF THE M.A. NO. 60/AHD/2015 (IN I.T.A NO.2481 / AHD/2011) A.Y. 2008 - 09 PAGE NO SMT. RAJKUMARI RAMSHAKTI SHETH VS. ITO 3 EARLIER YEAR REVEALS THAT THOUGH ASSESSEE HAS SHOWN INTEREST INCOME FROM VARIOUS OTHER PARTIES BUT HAS NOT SHOWN ANY RECEIPT OF INTEREST FROM KANTILAL HASTIMAL TH OUGH AS PER BALANCE SHEETS THE AMOUNTS WHICH WERE ADVANCED BY ASSESSEE AND WHICH HAVE BEEN STATED TO BE DURING THE COURSE OF BUSINESS HAD INCREASED VIS - A - VIS 31.032000 AND 31.032002. IN SUCH A SITUATION THE SUBMISSION OF THE ASSESSEE THAT THE AMOUNT WAS AD VANCED TO KANTILAL HASTIMAL IN THE NORMAL COURSE OF MONEY LENDING BUSINESS CANNOT BE ACCEPTED MORE SO IN THE ABSENCE OF INCOME FROM THE AMOUNT LENT, XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX' 3. THE APPLICANT RESPECTFULLY SUBMITS THAT THE HON'BLE BENCH NOTED THAT A R PLACED TRANSLATED COPY OF BALANCE SHEET AND INTEREST ACCOUNT OF EARLIER YEARS TO SUBSTANTIATE THAT INTEREST EARNED ON MONEY LENT TO KANTILAL HASTIMAL WAS INDEED OFFERED AS INCOME IN THE RETURN OF INCOME THROUGH OVERSIGHT FAILED TO NOTICE PAGE 87 OF THE PAPER BOOK (INTEREST ACCOUNT FOR THE PERIOD 1 - 4 - 1999 TO 31 - 3 - 2000) WHEREIN INTEREST RECEIVED OF RS. 30, 416 FROM KANTILAL HASTI MAL IS CLEARLY SHOWN & PROFIT OF RS. 8, 14, 309.80 (PAGE 88) IS TAKEN TO PROFIT & LOSS A/C (PAGE 86) OFFERED AS INCOME FROM BUSINESS IN THE RETURN OF INCOME FOR A Y 2000 - 01 (PAGE 19) OF THE PAPER BOOK. 4. IT IS RESPECTFULLY SUBMITTED THAT APPARENTLY WHILE DRAFTING THE ORDER THE HON'BLE BENCH OVERLOOKED THIS ASPECT OF THE MATTER AND PROCEEDED TO DISMISS THE CLAIM OF BAD DEBT ON THE GROUND THAT NO INTEREST RECEIPT FROM KANTILAL HASTIMAL WAS SHOWN BY THE APPLICANT. THERE IS AN ERROR APPARENT ON RECORD I N THE ORDER OF THE HON'BLE BENCH IN AS MUCH AS THAT BASIS ON WHICH CLAIM OF BAD DEBTS IS DISALLOWED IS FACTUALLY INCORRECT THAT REQUIRE TO BE MODIFIED AND CLAIM OF THE APPLICANT DESERVES TO BE ALLOWED. 5. THE APPLICANT THEREFORE, RESPECTFULLY SUBMI TS THAT IN THE LARGER INTEREST OF JUSTICE THE HON'BLE TRIBUNAL BE PLEASED TO ACCEPT THE PRAYER OF THE APPLICANT AND PASS APPROPRIATE ORDERS. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, LD. COUNSEL CONTENDED THAT ORDER OF THE HON BLE ITAT BEN CH HAS NOT M.A. NO. 60/AHD/2015 (IN I.T.A NO.2481 / AHD/2011) A.Y. 2008 - 09 PAGE NO SMT. RAJKUMARI RAMSHAKTI SHETH VS. ITO 4 ALLOWED THE CLAIM OF BAD DEBT BY OVER - LOOK ING THAT ASSESSEE HA D RECEIVED INTEREST INCOME FROM MR. KANTILAL HASTIMAL WHICH WAS SHOWN IN THE PAST AS INCOME FROM BUSINESS IN THE RETURN OF INCOME . ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENT ATIVE RELIED ON THE ORDER OF THE ITAT. 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE HAVE NOTICE D FROM THE PAPER BOOK SUBMITTED BY THE LD. COUNSEL THAT DURING THE ASSESSMENT YEAR 1999 - 2000 ASSESSE HAD DECLARED INCOME OF RS. 5 , 07 ,827 / - IN THE RETURN OF INCOME FILED ON 30 TH SEPTEMBER, 1999 . WE HAVE GONE THROUGH THE PAPER BOOK FILED AND NOTICED THAT THIS INTEREST INCOME WAS SHOWN FROM BUSINESS/PROFESSION IN THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 1999 AND IN THE BALANCE SHEET AS ON 31 ST MARCH, 1999 AGAINST THE NAME OF SHRI KANTILAL HASTIMAL OUTSTANDING LOAN ADVANCE D TO HIM WAS APPEARING AT RS. 2.5 LACS . WE HAVE ALSO GONE THROUGH THE PAPER BOOK FILED BY THE LD. COUNSEL BEFORE THE CO - ORDINATE BENCH OF ITA T AT THE TIME OF ORIGINAL APPELLATE PROCEEDINGS SHOWING INTEREST ACCOUNT FROM FINANCIAL YEAR 1998 - 99 TO 2001 - 2002. W E FIND THAT IN THE FINANCIAL YEAR 1999 - 2000, THE ASSESSEE HAS SHOWN INTEREST INCOME FROM THE BUSINESS AND PROFESSION INCLUDING INTEREST IN COME OF RS. 30,416/ - FROM MR. KANTILAL HASTIMAL AND OUTSTANDING LOAN RECEIVABLE FROM HIM WAS REFLECTED IN THE BALANCE SHEET. LOOKING TO THE ABOVE FINDINGS , WE CONSIDERED THAT DISALLOWING THE CLAIM OF BAD DEBT OF THE ASSESSEE ON THE GROUND THAT NO INTE REST M.A. NO. 60/AHD/2015 (IN I.T.A NO.2481 / AHD/2011) A.Y. 2008 - 09 PAGE NO SMT. RAJKUMARI RAMSHAKTI SHETH VS. ITO 5 INCOME SHOWN WAS NOT CORRECT , THEREFORE, THE M.A. OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 03 - 03 - 201 7 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCO UNTANT MEMBER AHMEDABAD : DATED 03 /03 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,