NETALKAR POWER TRANSMISSION,BELAGAVI V. NATIONAL E-ASSESSMENT CENTRE, DELHI

SA 21/PAN/2024

AI Insights

Netalkar Power Transmission appealed against the order of the National e-Assessment Centre (NeAC) which sustained the disallowance of bad debts amounting to Rs. 66,73,519 by the Assessing Officer (A.O). The A.O had disallowed these debts as they were considered capital in nature, related to advances for assets that were never installed nor returned. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the A.O's decision, leading to the appeal before the ITAT. The ITAT admitted additional evidence not previously considered by the lower authorities and decided to remand the matter back to the A.O for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398209 (ITAT-PANAJI)
• Appeal Type: Stay Application
• Pronouncement Date: 03-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: WT(D)
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DESHMUKH SPRAKASH.
• Assessee Lawyers: U. G. AMMANGI
• Keywords: Capital asset; Additional evidence; Bad and doubtful debts; Application of stay
• Section: 143(3); 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH PANAJI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI G D PADMAHSHALI ACCOUNTANT MEMBER I T A. Nos. 222/PAN/2024 & S A.21/PAN/2024 (A.Y. 2018-19 ) Netalkar Power Transmission, 45/2G,Dharwad Road,Khasbag, Belagavi-590004, Karnataka. Vs . National e – Assessment Centre, Delhi-110001 . PAN .No. AACFN4654R (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Assessee by Shri.U.G.Ammangi.AR Revenue by Shri.DeshmukhSPrakash.Sr.DR सुनवाई कȧ तारȣख/Date of Hearing 02.06.2025 घोषणा कȧ तारȣख/Date of Pronouncement 03.06.2025 ORDER PER PAVAN KUMAR GADALE, JM: The appeal is filed by the assesse against the order of the NFAC Delhi/CIT (A) passed u/sec 143(3) and u/sec 250 of the Act. The assesse has raised the grounds of appeal challenging the order of the CIT(A) sustaining the disallowance of bad debts made by the Assessing Officer. 2. The brief facts of the case are that, the assesse is engaged in the business. The assesse has filed the return of income for A.Y.2018-19 on 14-07--2018 disclosing a total income of Rs.2,49,14,610/-. Subsequently the case 2 ITA. No. 222/PAN/2024 Netalkar Power Transmission . was selected for scrutiny under CASS and notice u/sec 143(2) and u/sec 142(1) of the Act along with questionnaire was issued and the assessee has submitted the details in the ITBA e-proceedings. The Assessing Officer(A.O) found that the assesse has debited Rs.66,73,519/- in the profit & Loss account as bad debts, being the advances provided for acquisition of three assets ,which were never installed nor advances are returned back by the parties and explanations were called to substantiate the claim. Whereas the A.O was not satisfied with the explanations as claim is being capital in nature and disallowed Rs. 66,73,519/- and assessed the total income of Rs.3,15,88,129/- and passed the order u/sec 143(3) r.w.s143(3A)&143(3B) of the Act of the Act dated 08.03.2021. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts, submissions and findings of the AO but has confirmed the action of the assessing officer and dismissed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal. 4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the A.O overlooking the facts and submissions of the assessee in the proceedings. Further the Ld.AR submitted that the assessee has a good case on merits and has filed an 3 ITA. No. 222/PAN/2024 Netalkar Power Transmission . application for admission of the additional evidence under Rule 29 of ITAT rules. Per contra, the Ld. DR submitted that the evidences were not examined by the lower authorities and the Ld. DR supported the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue that the CIT(A) has erred in confirming the addition made by the A.O. as the transactions are not supported with the documentary evidences. The Ld.AR emphasized that the assessee has submitted the details as called for by the authorities. The assesse is filling the application for admission of additional evidences under Rule 29 of ITAT rules along with the affidavit with details substantiating the claim of advances provided for acquisition of capital asset and became irrecoverable placed at S.no.19 t0 21 of the paper book which could not be submitted before the lower authorities. Further the evidences play a important role in decision making in the adjudicating proceedings. Therefore considering the facts, circumstances and additional evidences, the assessee should not suffer for non filing of material information, as the evidences play a vital role in decision making and we admit the additional evidence. Accordingly, to meet the ends of justice, we restore the disputed issue along with the additional evidence to the file of the Assessing Officer to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in 4 ITA. No. 222/PAN/2024 Netalkar Power Transmission . submitting the information . And, we allow the grounds of appeal of the assessee for statistical purposes. 6. In the result, the Stay application filed by the assessee is infactious and is dismissed, and the appeal filed by the assesse is allowed for statistical purposes. Order pronounced in the open court on 03.06.2025. Sd/- Sd/- (GD PADMAHSHALI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Panaji Dated: 03/06/2025 Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT, 6. Guard file. //True Copy// BY ORDER, (Asstt. Registrar)ITAT, Panaji 5 ITA. No. 222/PAN/2024 Netalkar Power Transmission . Date Initial 1. Draft dictated on PS 2. Draft placed before author PS 3. Draft proposed & placed before the second member PS 4. Draft discussed/approved by Second Member. PS 5. Approved Draft comes to the Sr.PS/PS PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed "