PEEVEEAR ELECTRICALS,KOLKATA vs. ACIT, CIR-26, KOLKATA, KOLKATA

This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-7, Kolkata dated 09.05.2016 and the only issue arising out of the same relates to the addition of Rs.4,89,606/- made by the ld. CIT(Appeals) to the total income of the assessee on account of disallowance of its claim for bad debts written off.

The assessee in the present case is a partnership firm, which is engaged in the business of dealing in cable and electrical articles. The return of income for the year under consideration was originally filed by it on 30.09.2010 declaring total income of Rs.84,90,910/-. Thereafter a revised return was filed by the assessee on 07.09.2012 declaring total income of Rs.25,14,194/-. A letter dated 04.12.2012 was also filed by the Assessment Year: 2010-2011 assesese stating that the original return of income filed for the year under consideration was required to be revised because the liability amounting to Rs.59,76,714/- written back was offered to tax for the year under consideration in the original return but the same having been brought to tax by the Assessing Officer in A.Y. 2009-10 vide the assessment order passed under section 143(3), the same was to be deducted from the total income of the year under consideration as declared in the original return. This claim of the assessee was not accepted by the Assessing Officer and he proceeded to complete the assessment under section 143(3) vide an order dated 28.03.2013 with reference to the return originally filed by the assessee declaring total income of Rs.84,90,910/-.

Against the order passed by the Assessing Officer under section 143(3), an appeal was filed by the assessee before the ld. CIT(Appeals) and since the ld. CIT(Appeals) found merit in the submissions made by the assessee, he directed the Assessing Officer to reduce the amount of Rs.59,76,714/- from the total income of the assessee for the year under consideration as the same had already been considered by the Assessing Officer while computing the total income of the assessee for the immediately preceding year, i.e. A.Y. 2009-10. He, however, found from the submissions made by the assessee during the course of appellate proceedings before him that the amount of liabilities surrendered by the assessee was net off the sundry debtors written off amounting to Rs.4,89,606/-. In this regard, the assessee was called upon by the ld. CIT(Appeals) to furnish the details of income offered by it on account of such bad debts in the year under consideration or any earlier year. The assessee, however, failed to furnish the said details and keeping in view this failure, the ld. CIT(Appeals) directed the Assessing Officer to make the addition of Rs.4,89,606/- to the total income of the assessee on account of disallowance of its claim for the bad debts written off. Aggrieved by the order of the ld. CIT(Appeals) on this issue, the assessee has preferred this appeal before the Tribunal.

We have heard the arguments of both the sides and also perused the relevant material available on record. The contention raised by the ld. counsel for the assessee before us is that proper and sufficient opportunity was not afforded by the ld. CIT(Appeals) to furnish the relevant details of income declared by the assessee on account of bad debts written off and the assesee, therefore, could not furnish the said details in support of its claim on the issue of deduction on account of bad debts written off, which was raised by the ld. CIT(Appeals) for the first time during the course of appellate proceedings before him. He has urged that such opportunity may be given to the assessee by sending the matter back to the Assessing Officer for necessary verification. Since the ld. D.R. has also not raised any material contention in this regard, we set aside the impugned order of the ld. CIT(Appeals) on the issue of assessee’s claim for bad debts written off and restore the matter to the file of the Assessing Officer for deciding the same afresh on merit in accordance with law after giving proper and sufficient opportunity of being heard to the assessee.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on 31st day of January, 2018.