M/s. Purna S.S.K. Ltd., Hingoli V. ACIT,Cir.-1, Aurangabad

MA 74/PUN/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7079 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-07-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 04-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: S N DOSHI
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER M.A. NO. 74/PN/2011 (ARISING OUT OF ITA NOS. 23/PN/2011 & 175/PN/2010) (ASSTT. YEARS :2002-03) M/S. P URNA S.S.K. LTD. ... APP LICA NT BASMATNAGAR, TAL-BASMAT, DIST HONGOLI PAN : AAAAP0899B V. THE ASST. COMMISSIONER OF INCOME-TAX, RESPONDENT CIRCLE-1, AURANGABAD APPLICANT BY : SHRI S.N. DOSHI RESPONDENT BY : SHRI HARESHWAR SHARMA DATE OF HEARING : 29.7 .2011 DATE OF PRONOUNCEMENT : 28.9.2011 ORDER PER I.C. SUDHIR, JM WHILE REITERATING THE CONTENTS OF THE APPLICATION, THE LD. A.R. POINTED OUT THAT IN ITS ORDER DATED 4 TH MARCH 2011 IN M.A. NO. 23/PN/2011, THE TRIBUNAL HA S NOTED THAT ASSESSEES COUNSEL RAISED ANOTHER ARGUME NT THAT THE AMOUNT OF RS. 3.2 CRORES BECAME A BAD DEBT IN THE YEAR UNDER CONSIDER ATION ITSELF AND THEREFORE, THE AMOUNT HAS TO BE ALLOWED AS BAD DEBT TO THE ASSESSE E IN THIS YEAR ITSELF. ON THIS CONTENTION OF THE ASSESSEE, THE TRIBUNAL HAS OBSERV ED AS IN OUR OPINION, THE ISSUE OF BAD DEBTS HAS TO BE DECIDED CONSIDERING THE DIFF ERENT FACTS AND THE JUDICIAL PRONOUNCEMENTS ON THAT TOPIC. AS SUCH THIS IS A NE W ARGUMENT RAISED BY THE COUNSEL FOR THE FIRST TIME BEFORE US AND HENCE IT I S OUTSIDE THE SCOPE OF THE PROVISIONS OF SECTION 254(2) OF THE ACT. ... MA . NO 74/PN/2011 PURNA S.S.K. LTD. A.Y. 2000-01& 2002-03 PAGE OF 4 2 2. THE LD. A.R. SUBMITTED THAT THE ASSESSEE, ON TH E CONTRARY, HAD RAISED THE ABOVE MENTIONED ANCILLARY CONTENTION IN THE COURSE OF HEARING OF THE APPEAL ITSELF VIDE PAGE NO. 7 OF THE NOTE ON FACTS AND SUBMISSIO NS AND ALL THE FACTS SUPPORTING THE ANCILLARY CONTENTIONS WERE EXPLAINED BEFORE THE BENCH. THE LD. A.R. SUBMITTED FURTHER THAT IN PARA NO. 6 OF THE ORDER DATED 13.12 .2010 IN THE APPEAL, THE TRIBUNAL HAS ALSO DISCUSSED THE ABOVE CONTENTION WITH THIS O BSERVATION AS 6. IN CASE THE INCOME IS NOT ACTUALLY RECEIVED SUBSEQUENTLY THE AS SESSEE MAY CLAIM DEDUCTION ON ACCOUNT OF BAD DEBT IN THE YEAR IN WHICH THE DEBT H AD BEEN ACTUALLY WRITTEN OFF. 3. THE LD. A.R., THEREFORE, SUBMITTED THAT IT IS NO T CORRECT TO STATE THAT THIS WAS NEW ARGUMENT ADVANCED FIRST TIME IN THE MISCELLANEO US APPLICATION (M.A. NO. 23/PN/2011). HE, ACCORDINGLY, SUBMITTED THAT THERE HAS OCCURRED AN OBVIOUS APPARENT MISTAKE ON FACT RECTIFIABLE U/S. 254(2) O F THE ACT WHICH NEEDS RECTIFICATION. 4. THE LD. D.R. OPPOSED THE APPLICATION WITH THIS S UBMISSION THAT PRESENT APPLICATION HAS BEEN PREFERRED AGAINST THE ORDER OF THE TRIBUNAL PASSED IN M.A. NO. 23/PN/2011. HE SUBMITTED FURTHER THAT EVEN IN THE ORDER OF THE TRIBUNAL IN THE APPEAL, THE TRIBUNAL HAS ALREADY CONSIDERED THE CON TENTION OF THE ASSESSEE WITH THIS OBSERVATION THAT IN CASE THE INCOME IS NOT RECEIVE D SUBSEQUENTLY, THE ASSESSEE MAY CLAIM DEDUCTION ON ACCOUNT OF BAD DEBT IN THE YEAR IN WHICH THE DEBT HAD BEEN ACTUALLY WRITTEN OFF. 5. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ORDER DATED 4 TH MARCH 2011 PASSED BY THE TRIBUNAL IN M.A. NO. 23/PN/2011 AS THE ACTUAL FACT ARGUED AS PER THE CON TENTS OF M.A. NO. 23/PN/2011 REMAINED THAT BASICALLY INCOME ITSELF HAS NOT BEEN RECEIVED AND IT WAS NOT ENTITLED TO BE RECEIVED, THE SAME WAS NOT SHOWN AND HENCE, IT W AS CONTENDED THAT THERE WAS NO QUESTION OF WRITING OFF THE SAME AS BAD DEBT. C ONSIDERING THIS SUBMISSION, THE MA . NO 74/PN/2011 PURNA S.S.K. LTD. A.Y. 2000-01& 2002-03 PAGE OF 4 3 TRIBUNAL IN PARA NO. 6 ON PAGE 11 OF THE ORDER IN T HE APPEAL HAS GIVEN ITS FINDINGS AS UNDER : 6. IN VIEW OF THE FOREGOING DISCUSSION WE HOLD THA T ADDITIONAL INCOME OF RS. 3.20 CRORES HAD ACCRUED TO THE ASSESSEE IN TERM S OF AGREEMENTS ENTERED WITH THE PARTIES AND ON THE BASIS OF MERCANTILE SYS TEM OF ACCOUNTING BEING FOLLOWED BY THE ASSESSEE. ONCE THE INCOME HAD ACCR UED DURING THE YEAR THE SAME IS TAXABLE. IN CASE THE INCOME IS NOT ACTUALL Y RECEIVED SUBSEQUENTLY THE ASSESSEE MAY CLAIM DEDUCTION ON ACCOUNT OF BAD DEBT IN THE YEAR IN WHICH THE DEBT HAD BEEN ACTUALLY WRITTEN OFF. WE ACCORDI NGLY UPHOLD THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF RS. 3.20 CRORE. 6. THUS WE FIND THAT THERE IS NO MISTAKE APPARENT F ROM RECORD IN THE ORDER OF THE TRIBUNAL IN THE APPEAL. THE TRIBUNAL CONSIDERI NG SIMILAR ARGUMENTS HAS DECIDED VIDE ORDER DATED 4 TH MARCH 2011 IN M.A. NO. 23/PN/2011 THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL IN THE APPEAL. WE THUS F IND THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ORDER DATED 4 TH MARCH 2011 IN M.A. NO. 23/PN/2011 AS ALSO THE SUBJECT MATTER OF THE PRESENT M.A. HAS ALR EADY BEEN CONSIDERED BY THE TRIBUNAL IN M.A. NO. 23/PN/2011, HENCE ALSO THE PR ESENT APPLICATION IS NOT MAINTAINABLE. 7. IN RESULT, THE MISCELLANEOUS APPLICATION IS DIS MISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER 2011. SD/- SD/- ( D. KARUNAKA RAO ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 28TH SEPTEMBER, 2011 MA . NO 74/PN/2011 PURNA S.S.K. LTD. A.Y. 2000-01& 2002-03 PAGE OF 4 4 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A)- AURANGABAD 5. THE D.R. ITAT A BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE