SARASH WORLDWIDE EXPORTS (P) LTD.,CHENNAI vs. ITO, CHENNAI

This is an appeal filed by the Assessee against the order of the learned Commissioner of Income Tax (Appeals)-15, Chennai in appeal No. dated 17.02.2016 for the Assessment Year 2004-05.

Mr. Kaushik. M, Advocate represented on behalf of the Assessee and Mr. AR.V.Sreenivasan, JCIT represented on behalf of the Revenue. :- 2 -: 3. It was submitted by the learned Authorized Representative that the appeal of the assessee was delayed by 386 days for which the assessee has filed an affidavit, wherein it is submitted that though the papers were handed over to the assessee’s Chartered Accountants, however in the Chartered Accountant’s office, the senior partner therein had not been intimated and the appeal was lost track off. Subsequently, when the assessee had sought the issue with the Chartered Accountant, the papers were traced and the appeal was filed belatedly with 386 days of delay in filing of the appeal. It was a submission that the delay not intentional and non-condonation of the delay would cause substantial loss to the assessee.

In reply, the learned Departmental Representative vehemently opposed the condonation of delay.

We have considered the rival submissions and perused the material available on record.

The assessee has filed an affidavit, wherein the facts have been brought out for the reasons for the delay in filing the appeal. The affidavit has not been found to be false. Consequently, the delay of 386 days in filing the appeal is condoned and the appeal is adjudicated on merits. In the assessee’s appeal it was submitted by the learned Authorized Representative that the assessee had challenged the action of the learned CIT(A) in confirming the disallowance of Rs.10.00 lakhs paid to Tai Pentagon International as also an amount of Rs.1,85,872/- being an amount given to :- 3 -: Shri. Sivabalanathan of Euro Impex, both of which had been claimed as a bad debt. It was a submission that in respect of the amount of Rs.10.00 lakhs paid to Tai Pentagon International, it was a submission that the said concern was based at Bangalore and was headed by a foreign national by the name of Mr. Gene Chou. The said company was to identify the quarries for supply of granite blocks of which quality that was approved by their principal buyers and the amount of Rs.10.00 lakhs was paid on 04.10.2002 as advance to be adjusted against the commission that would become payable on receipt of letters of credits from their principals. It was a submission that the assessee later noticed that the said company had adopted the said dubious practice even with others and consequently the said amount had been written off on 30.03.2004 as bad debts. In respect of the amount paid to Shri. Sivabalanathan, it was submitted that these were amounts paid for the purchase of Kunnam Black Granite rough blocks of 2.650 CBM which was marked by the assessee during August 2002. The same was not supplied despite repeated requests and consequently the same was also written off as bad debts. It was a submission that the Assessing Officer disallowed the said two amounts on the ground that the said debts were not taken into account while computing the income of the assessee either during the relevant assessment year or in any previous years. It was a submission that the learned CIT(A) for the same reason had confirmed the disallowance. It was a submission that the two amounts were in fact business :- 4 -: transactions and were business expenditures. It was a submission that the said amounts was liable to be allowed.

In reply, the learned Departmental Representative submitted that the assessee has not been able to prove either of the transactions and no evidence whatsoever has been produced before either of the lower authorities. It was a further submission that the arguments of the trade advances was a new argument and it was never put before the Assessing Officer nor before the learned CIT(A). It was also a submission that no evidences has been produced before the Tribunal also to substantiate the claim of the assessee.

We have considered the rival submissions and perused the material available on record.

Admittedly, in respect of both the transactions, the assessee has not been able to prove that the amounts have been offered as income in any of the earlier years or for the relevant assessment year to claim the bad debt. In the circumstances, the disallowance as made by the Assessing Officer and as confirmed by the learned CIT(A) on the said ground stands sustained. In regard to the argument that these were business transactions, admittedly, no evidence has been produced before any of the authorities below nor before us. Even otherwise, the amount of Rs.10.00 lakhs had been paid on 04.10.2002 relevant to the assessment year 2003-04, so also the amount of Rs.1,85,872/- paid to Shri Sivabalanathan in August 2002. The assessment :- 5 -: year under appeal is 2004-05. These transactions do not relate to the assessment year under appeal. In the circumstances, the argument of the assessee that these are business expenses liable to be allowed is also rejected. In the circumstances, the appeal of the assessee stands dismissed.

In the result, the appeal of the assessee is dismissed.