SHREE GAJANAN MILK TRANSPORT CO-OPERATIVE SOCIETY LTD,PUNE vs. ITO, WD- 5(2) , PUNE

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ITA 666/PUN/2026Status: DisposedITAT Pune25 June 2026AY 2008-095 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the facts of the present appeal were identical to a previous assessment year where the issue was restored to the CIT(A) for de novo adjudication. Therefore, the Tribunal restored the issue to the CIT(A) for fresh consideration.

What were the facts?

The assessee claimed bad debts of Rs. 10,19,271/-. The Assessing Officer made an addition of this amount, which was upheld by the CIT(A). The assessee argued that the conditions for bad debts under Section 36(1)(vii) read with Section 36(2) were satisfied.

What were the issues?

Whether the bad debts claimed by the assessee were allowable under Section 36(1)(vii) read with Section 36(2) of the Income Tax Act, and alternatively, whether they could be treated as a business loss under Section 28.

Which sections of the Income-tax Act were involved?

Section 36(1)(vii),Section 36(2),Section 28

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA

For Appellant: Shri Kishor Phadke
For Respondent: Shri Pawan Bharti (through virtual)

PER R.K. PANDA, VP:

This appeal filed by the assessee is directed against the order dated 16.01.2026 of the Ld. CIT(A), Pune-13 relating to assessment year 2008-09. 2. Facts of the case, in brief, are that the assessee filed its return of income on 30.09.2008 declaring total income of Rs.12,88,380/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 26.08.2010 resulting in refund of Rs.7,23,200/-. Subsequently the case of the assessee was selected for scrutiny under CASS and accordingly statutory notice u/s 143(2) of the Act was issued and served on the assessee. Thereafter, notice u/s 142(1) of the Act was issued and served on the assessee in response to which the 2 assessee appeared before the Assessing Officer and filed the requisite details. The Assessing Officer completed the assessment determining the total income of the assessee at Rs.23,07,654/- wherein apart from other things, he made addition of Rs.10,19,271/- by invoking the provisions of section 36(1)(vii) of the Act.

3.

In appeal, the Ld. CIT(A) upheld the action of the Assessing Officer.

4.

Aggrieved with such order of the Ld. CIT(A) the assessee is in appeal before the Tribunal by raising the following grounds:

1.

The learned CIT(A)-National Faceless Appeal Centre (NFAC) erred in law and on facts in confirming the addition made by the learned AO at Rs.10,19,271/-

2.

The Learned CIT(A)-NFAC erred in law and on facts in sustaining the disallowance of bad debts of Rs.10,19,271 by ld. AO without appreciating the fact that, - Appellant satisfied the conditions laid out in section 36(1)(vii) r.w.s 36(2) of ITA, 1961 - Income w.r.t said debtors were duly offered in previous years as "amounts receivable from customers” and the same are reflected as revenue on constructive basis in the profit and loss account.

3.

Without prejudice to above ground, learned IT Authorities erred in law and on facts in not allowing write off of bad debts amounting to Rs.10,19,271 as trading/business loss u/s 28 of ITA, 1961. 4. Appellant contends that, since the facts in the present year are identical to those in AY 2009-10, the matter may kindly be set aside to the file of the Assessing Officer for fresh adjudication in accordance with the directions issued by the Hon'ble ITAT, Pune in the Appellant's own case for AY 2009-

10.5.

Appellant craves leave to add/alter/modify/amend/delete all or any of the grounds of appeal.

3

5.

The Ld. Counsel for the assessee at the outset filed a copy of the order of the Tribunal in assessee’s own case vide ITA No.1872/PUN/2025 order dated 27.04.2026 for assessment year 2009-10 and submitted that the Tribunal has restored the issue to the file of the Ld. CIT(A) for de novo adjudication. He accordingly submitted that he has no objection if the matter is restored to the file of the Ld. CIT(A) with similar directions.

6.

The Ld. DR on the other hand supported the order of the Ld. CIT(A).

7.

After hearing both the sides, we find an identical issue had come up before the Tribunal in assessee’s own case for assessment year 2009-10 wherein the Tribunal restored the issue to the file of the Ld. CIT(A) with certain directions by observing as under:

“4. We have heard both the parties and perused the records. In this case Assessee is a cooperative society registered under Maharashtra Cooperative Societies Act . Assessee filed Original Return of Income on 30/10/2009 declaring Total Income at Rs.360450/-.

4.

1 It is mentioned in the Assessment Order that Assessee enters into Hire Contracts with customers on behalf of members to transport milk, goods etc.

4.

2 Assessee had claimed Bad Debts of Rs.10,33,347/-. The AO asked assessee to prove that these amounts were credited to Income & Expenditure account in earlier years. The Assessee merely submitted that these amounts have been entered on Constructive basis. No specific details were filed. AO disallowed it and CIT(A) confirmed. Before CIT(A) the assessee also raised alternative ground regarding treating the impugned amounts as business loss. The CIT(A) has not adjudicated the ground.

4.

3 The Assessee had claimed that it receives 4 % commission. But AO estimated it at 8%. During the appellate proceedings before this Tribunal, Assessee filed copy of Board Meeting where in commission was decided. However, the said document

4 has not been discussed by the AO in his order. Assessee also filed summery of member wise commission earned. Again the AO has not referred the said document.

4.

4 In these facts and circumstances of the case as Assessee could not file details before the AO to prove the case and Ld.DR has agreed to the proposal submitted by the Ld.AR to set aside the case, in the interest of justice we set aside the order of CIT(A) to CIT(A) for de-novo adjudication. CIT(A) shall provide opportunity to the assessee to file details.”

8.

Since the facts of the instant appeal are identical to the facts in assessee’s own case for assessment year 2009-10, therefore, following the decision of the Tribunal, we restore the issue to the file of the Ld. CIT(A) for de novo adjudication of the issue. Needless to say the Ld. CIT(A) shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

9.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 25th June, 2026. (ASTHA CHANDRA) VICE PRESIDENT पुणे Pune; दिन ांक Dated : 25th June, 2026 GCVSR Gajjala Chinna Chinna Venkata Subba Reddy Venkata Subba Reddy Date: 2026.06.29 11:51:27 +05'30'

5 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent

3.

The concerned Pr.CIT, Pune

4.

DR, ITAT, ‘SMC’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, ////

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