SALORA INTERNATIONAL LTD. vs. THE COMMISSIONER OF INCOME TAX

IN THE HIGH COURT OF DELHI AT NEW DELHI . 14.07.2009 . Present: Mr. P.N. Monga, Advocate and Mr. Manu Monga, Advocate for the appellant. Ms. Rashmi Chopra, Advocate for the respondent. . + I.T.A. No.699/2009 . The assessee herein had given advance to one M/s. R.B. Data Com. Private Limited in the assessment year in question i.e. assessment year 2002-03. The appellant claimed Rs.59,30,332 as bed debts which could not be recovered from the aforesaid party, according to the assessee. The Assessing Officer disallowed the entire amount of Rs.59,30,332/- , which order was upheld by the C.I.T. (Appeals) as well. In the appeal, preferred by the assessee before the I.T.A.T. the contention of the assessee was that the amount at least to the extent of Rs.44,95,128/- should have been allowed as commission income in this behalf was duly accounted for by the assessee in the earlier year and therefore the assessee fulfilled the conditions of Section 36(i )(vii) and 36(2)(i). This contention of the assessee was accepted by the I.T.A.T. in the following manner: ?We have heard the rival submissions and perused the material available on record and have gone through the orders of the authorities below. We find that deduction has been claimed by the assessee under section 36(1)(vii) of the Act but for that purpose, the conditions of section 36(2) are also to be fulfilled and hence deduction can be allowed to the assessee only to the extent, income was accounted for by the assessee which is Rs.44,95,128/- only. Since, the assessee has written off the amount in the present year, the assessee deserves to succeed to the extent of Rs.44,95,128/- because to this extent, income was accounted for by the assessee in the earlier years. For the balance amount, we feel that deduction cannot be allowed to the assessee because no income was accounted for by the assessee in the present year or in the earlier years and the assessee is not in the business of money lending. We, therefore, delete this disallowance to the extent of Rs.4495128/- for which the assessee has complied with the provisions of Section 36(2) as well as the provisions of section 36(1)(vii). This ground is partly allowed? The assessee has still come by way of present appeal and states that entire amount of Rs.59,30,332/- should have been allowed. We fail to understand this grievance of the assessee, as noted above, since before the I.T.A.T. a deduction to the extent of Rs.44,95,128/- was pressed which was allowed in his favour and it was not justified for the assessee to claim entire deduction. Even otherwise, from the perusal of the aforesaid extract of the . . orders of the I.T.A.T., it is clear that the assessed had accounted for an amount of Rs.44,95,128/- only in the earlier years as commission income and therefore, the I.T.A.T. has rightly allowed deduction only to this extent. Having regard to the provisions of Sections 36(2)(iv) of the Act, we do not find any substantial question of law arises in this appeal and the same is accordingly dismissed. . A.K.SIKRI, J . . . . VALMIKI J.MEHTA, J . July 14, 2009 Ne . . # 7