THE COMMISSIONER OF INCOME T vs. SHRI BIMAL KUMAR BAGARIA

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TCA/582/2021HC Madras15 December 2021Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on a Circular No. 17/2019 dated 08.08.2019 issued by the Central Board of Direct Taxes (CBDT). This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs. 1,00,00,000/- (Rupees One Crore). The learned counsel for the Revenue brought to the court's notice that the tax effect in the present appeal was less than this threshold limit. Consequently, the appeal was dismissed as withdrawn. The court explicitly stated that the substantial question of law remains open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income-tax-II, Coimbatore, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 16.01.2009 passed by the Income Tax Appellate Tribunal (ITAT), Chennai. The appeal pertained to the block period from 01.04.1996 to 31.03.2003 and concerned the assessee, Shri. Bimal Kumar Bagaria. The core of the dispute involved the ITAT's decision to allow the assessee's claim for bad debt set off against miscellaneous items declared in the return of income, amounting to Rs. 23,94,282/-. The Revenue's appeal was filed under Section 260A of the Income Tax Act, 1961.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in allowing the claim for bad debt to be set off against miscellaneous items declared by the assessee to the extent of Rs. 23,94,282/-, even though as per Section 36(1)(vii) of the Income-tax Act, 1961, before claiming an amount as bad debt, it should have been reflected as income in the books of accounts? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. Revenue's Contention: The Revenue contended that the ITAT erred in allowing the bad debt claim because, as per Section 36(1)(vii) of the Income-tax Act, 1961, the amount claimed as bad debt should have been reflected as income in the assessee's books of accounts. The Revenue's appeal was filed under Section 260A of the Income-tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 260A,Section 36(1)(vii)

AI-generated summary — verify with the full judgment below

Tax Case Appeal No. 582 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 15.12.2021 CORAM THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No. 582 of 2021 The Commissioner of Income-tax-II Coimbatore .. Appellant Versus Shri. Bimal Kumar Bagaria 14/2, Karpaga Vinayakar Koil Street Thirunagar Colony, Erode PAN: ACZPB9543Q

.. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 16.01.2009 passed by the Income Tax Appellate Tribunal, “D” Bench, Chennai in I.T(SS).A.No.99/Mds/2006. For Appellant : Mr.M. Swaminathan Senior Standing Counsel Mrs.Usha Rani Junior Standing Counsel 1/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No. 582 of 2021 JUDGMENT (Judgment was delivered by R. MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, calling in question the correctness of the order dated 16.01.2009 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, in I.T(S.S).A.No.99/Mds/2006, relating to the block period from 01.04.1996 to 31.03.2003, by raising the following substantial question of law:- “ Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was right in law in allowing the claim for bad debt to be set off against Miscellaneous items which have been declared by the assessee to the extent of Rs.23,94,282/- in the return of income, even though as per section 36(1)(vii) of the Income-tax Act, 1961, before claiming an amount as bad debt it should have been reflected as income in the books of accounts?” 2. When this matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit. 2/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No. 582 of 2021 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial question of law for determination in an appropriate case. No costs. [R.M.D, J.] [M.S.Q, J.] 15.12.2021

Internet : Yes

Index : Yes / No dhk To 1. The Income Tax Appellate Tribunal, Chennai “D” Bench. 2.The Commissioner of Income Tax (Appeals) - II Coimbatore 3/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No. 582 of 2021 R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. dhk Tax Case Appeal No. 582 of 2021 15.12.2021 4/4 https://www.mhc.tn.gov.in/judis

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