SALORA INTERNATIONAL LTD.,NEW DELHI vs. ACIT, NEW DELHI

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ITA 5104/DEL/2016Status: DisposedITAT Delhi28 February 2020AY 2009-104 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the disallowance as the assessee failed to provide materials to show compliance with the mandatory requirements of Section 36(2) of the Income Tax Act. The assessee was also absent during the hearing.

What were the facts?

The assessee claimed a deduction of Rs. 7,58,909/- on account of bad debts written off. The Assessing Officer and the CIT(A) disallowed this claim.

What were the issues?

Whether the bad debts written off were eligible for deduction under Section 36(1)(vii) and met the conditions of Section 36(2) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

(A) This appeal by Assessee is filed against the impugned appellate order of Learned Commissioner of Income Tax (Appeals)-17, New Delhi [“Ld. CIT(A)”, for short], dated 20.07.2016 for Assessment Year 2009-10. Grounds taken in this appeal of Assessee are as under:

“1. On the facts and circumstances of the case the Assessing Officer is wrong in disallowing a sum of Rs. 7,58,909/- on account of bad debts.

2.

The assessee claimed Rs. 7,58,909/- under Section 36(I)(vii) of the Income Tax Act and Commissioner (A) has disallowed.

ITA No.-5104/Del/2016. Salora International Ltd. 3. The assessee had filed complete details of bad debts written off with name, address and Permanent Account Number wherever available. The papers were filed before the Assessing officer and the Ld. CIT(A). On these facts, the Commissioner (A) is wrong in disallowing a sum of Rs. 7,58,909/-.

4.

That the addition made is against the law & facts of the case.”

(B) The issue in dispute relates to assessee’s claim for deduction amounting to Rs. 7,58,909/- on account of bad debt written off. The disallowance made by the Assessing Officer (“AO”, for short) was confirmed by Ld. CIT(A) on the ground, that neither the assessee proved or explained, before the Assessing Officer or before the Ld. CIT(A) that the aforesaid amount was in the nature of bad debt; nor it could be substantiated that these debts had been taken into account in computing the total income of the assessee as provided u/s 36(2) of the I.T. Act. At the time of hearing before us, the assessee was represented by none. In the absence of any representation from the assessee’s side, we heard the Ld. Senior Departmental Representative (“Sr. DR”, for short) of Revenue, who relied on impugned appellate order dated 20.07.2016 of Ld. CIT(A). We find from perusal from records, that the assessee has failed to substantiate the claim for deduction of aforesaid amount of Rs. 7,58,909/-; as the assessee has failed to provide materials to show compliance with mandatory requirements u/s 36(2) of I.T.

Act. In the absence of materials to prove that mandatory requirements u/s 36(2) of I.T. Act are met in this case, the aforesaid disallowance of Rs. 7,58,909/- is confirmed and assessee’s appeal is dismissed.

ITA No.-5104/Del/2016. Salora International Ltd. (C) Before we part, we explicitly clarify that the assessee will be at liberty to approach ITAT for restoration of this appeal in accordance with Proviso to Rule 24 of Income Tax (Appellate Tribunal), Rules, 1963. If the assessee does approach ITAT for restoration of the appeals in ITAT, the matter will be considered in accordance with law having regard to the facts and circumstances.

[D] For statistical purposes, appeal filed by Assessee is partly allowed.

Order is pronounced in Open Court on 28/02/2020.

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