SPORTS & LEISURE APPAREL LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 3796/DEL/2017Status: DisposedITAT Delhi11 August 2021AY 2012-1311 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the write-off for garment shortages and unreturned uniforms were directly related to the business and thus allowable. However, for notice pay, the assessee failed to provide evidence of recovery efforts, so it was not allowed.

What were the facts?

The assessee debited amounts to employees for notice pay, uniform shortages, and garment shortages, which were unrecoverable and written off. The Assessing Officer disallowed this write-off as a bad debt. The CIT(A) confirmed the disallowance for notice pay but allowed it for garment and uniform shortages.

What were the issues?

Whether amounts written off for notice pay, uniform shortages, and garment shortages are allowable as business expenditure or bad debts. Whether disallowances under normal provisions should be excluded from book profits under Section 115JB.

Which sections of the Income-tax Act were involved?

Section 28,Section 37,Section 115JB,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI

Before: SHRI KUL BHARAT

Hearing: 02.08.2021Pronounced: 11.08.2021

per explanation 2 of section 115JB of the Act. Thus, Ground of appeal No.2 raised by the assessee is allowed.

1.

16. Ground No.3 raised by the assessee is against the charging of interest u/s 234B of the Act. No submission as made on behalf of the assessee as to how the charging of interest is incorrect. This being consequential in nature. I hold accordingly. Thus, Ground No.3 raised by the assessee is allowed.

17.

Ground of appeal No.4 raised by the assessee is general in nature, needs no adjudication.

18.

In the result, the appeal of the assessee is partly allowed.

Above decision was pronounced on conclusion of Virtual Hearing in the presence of both the parties on 11th August, 2021.

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