Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, BENCH ‘SMC’ KOLKATA
Before: Hon’ble Shri J.Sudhakar Reddy, AM]
ORDER
PER J.SUDHAKAR REDDY, AM:
This is an appeal by the assessee directed against the order of the Commissioner of Income Tax-(A)-2, Kolkata relating to A.Y. 2013-14 wherein the CIT(A) has upheld the adjustment made by CPC while processing the intimation u/s 143(1) of the Act. 2.. The facts are that the income of the assessee was assessed under normal provision of the Act at Rs.30,40,315 as against the returned income of Rs.7,15,982/- and similarly the book profit u/s 115JB was also computed by the AO at Rs.41,21,047 as against of Rs.17,96,718 returned by the assessee. The difference in both the case is of Rs.23,24,329 which was the result of not allowing adjustment of the loss of current year which pertains to bad debt written off during the year. The order in the case was passed by the CPC u/s 143(1) of the Act. The ld. CIT(A) set aside the issue to the file of the AO, with a direction to pass a speaking order. 3. After hearing the rival contentions, I find that the Hon’ble Mumbai high Court in the case of Bajaj Auto Finance Ltd vs CIT Pune 2018 2Taxman 1716 (Bom) order dated 23.02.2018 had held as follows :- “Provision for doubtful overdue instalments under hire purchase finance agreements - adjustment u/s 143(1) (a) relating to disallowance of the claim for bad debts under Section 36(1 )(viii) - Held that:- While mere making of provision for bad debts will not by itself (on application of amended law) entitle the party M/s. Klassic Apartments Private Ltd. A.Y.2013-14 2
to deduction, yet it would be a matter where the assessee should be given an opportunity to establish its claim. This by producing its evidence of the manner in which it treated the provision of bad debts written off in accounts as well as in its Balance Sheet. The disallowance cannot be made by intimation under section 143(1 )(a) as it requires that a party be given an opportunity to establish its claim before disallowing it. It would have been a completely different matter if the Apex Court had ruled that in no case can provision for bad debts be allowed as a bad debt under section 36(1 )(vii). The allowance of the claim of provision for bad debt is entirely dependent upon how it is reflected in the Balance Sheet and its accounts. Therefore, for the above purpose it is necessary that the party to be given an opportunity to establish its claim. Therefore, in the present facts, adjustment by way of disallowing deduction by intimation under section 143(1 )(a) of the Act is not proper. - Decided in favour of assessee .”
In my view the proposition of law laid down in this judgment applies to the facts of this case. The issue is a debatable issue. Even otherwise the ld. CIT(A) is wrong as he has no power to remand the matter to the AO. Hence we delete the impugned addition and allow the appeal of the assessee.
In the result the appeal of the assessee is allowed. Order pronounced in the Court on 21.03.2018.
Sd/- [ J.Sudhakar Reddy ] Accountant Member Dated : 21.03.2018. [RG Sr.PS] Copy of the order forwarded to: 1.M/s Klassic Apartments Private Limited, C/o Salarpuria Jajodia & Co., 7, C.R.Avenue, Kolkata-700072. 2. I.T.O., Ward-7 (3), Kolkata. 3. C.I.T.(A)- 2, Kolkata 4. C.I.T-2, Kolkata 5. CIT(DR), Kolkata Benches, Kolkata. True Copy By order, Senior Private Secretary Head of Office/D.D.O, ITAT Kolkata Benches M/s. Klassic Apartments Private Ltd. A.Y.2013-14 3