Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND SRI ASHWANI TANEJA, AM (A.Y:2001-02) Spectrum Business Support Ltd. Income Tax Officer B-207, Kailas Industrial Ward-7(2)(2), Mumbai. Complex, Veer Savarkar Marg, Vs. Vikhroli(W), Mumbai-400079 PAN No.AAACS6557M Appellant .. Respondent Assessee by .. Shri. Anil Sathe, AR Revenue by .. Shri. Vishwas Mudhe, DR Date of hearing .. 13-12-2016 Date of pronouncement .. 13-12-2016 O R D E R PER MAHAVIR SINGH, JM:
This appeal by the assessee is arising out of the order of CIT (A)-13, Mumbai in appeal No. CIT (A)-13/ITO-7(2)(2)/AP-43/09-10 dated 01-01-2013. The Assessment was framed by ITO-7(2)(2), Mumbai for the A.Y. 2001-02 vide order dated 26-12-2008 u/s 143(3) r. w. s. 254 of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in disallowing the claim of bad debts of the assessee pertaining to other than Govt. institutions. For this assessee has raised following grounds: - “
1. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the learned assessing officer in disallowing the bad debts pertaining to other than Government Institutions.
2. The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that the bad debts pertain to sales executed by the appellant nearly 10 years anterior to the year under consideration and it is practically difficult and not feasible for the appellant company to retrieve physical records.
3. The learned Commissioner of Income Tax (Appeals) erred in coming to a conclusion that the appellant company has failed to furnish the details and information to establish that the bad debts written off pertain to the revenue accounted for in earlier years when the requisite ledger accounts had been furnished by the appellant.
4. The learned Commissioner of Income Tax (Appeals) did not consider the fact that the claim of bad debts of the appellant has consistently been allowed for nearly 5 to 6 years anterior to the assessment year under appeal and for S to 6 assessment years subsequent to the year 2001-02.
5 The learned Commissioner of Income Tax (Appeals) erred in not considering the substantial data recovered from its old tally version to establish that the revenue pertaining to the debts written off had been accounted for in the relevant assessment years.”
At the outset the learned Counsel for the assessee stated that this is second round of litigation and in the first round of litigation the Tribunal in vide order dated 28-06-2007 remanded the matter back to the file of the AO vide Para 8 as under: - “8. Having heard both the parties and having considered their rival submissions, we are of the opinion that in view of the amended provisions of law w. e. f. A.Y. 1989- 90 it is no longer necessary for the assessee to prove that the debt has become bad as long as the same has been included in the income of the assessee. This issue is also therefore remanded back to the file of the AO with a direction to verify whether this amount of bad debts written off has been included in the income of the assessee and if it is found to be included, to delete the addition. This ground of appeal
is therefore allowed for statistical purposes.” The learned Counsel for the assessee admitted that the assessee could not file details for its claim of bad debts with supporting evidences and AO has noted this fact in Para 3 and 5 of his assessment order as under.: - “3. In view of the directions as above, statutory notices u/s 143(2) and 142(1) were issued and duly served on the assessee fixing the hearing on 26.11.2008. The assessee was asked to file explanation/details with supporting evidences in respect of the issues set aside by the ITAT. There was no compliance and no response to the notice issued Inspite of allowing sufficient time. Hence, it is presumed that the assessee has no explanation to offer. The issues are therefore, decided on the basis of material on record.
5. The assessee was also asked to file the explanation/details with all the supporting evidences in regard to its claim of bad debts of Rs.91,70,930/-. However, there was compliance and no response inspite of allowing sufficient time and opportunity. It is, therefore, assumed that the assessee has no explanation to offer. Hence, the bad debts of Rs.91,70,930/- claimed in the P & L A/c is disallowed and added back to the total income. Penalty u/s 271(1)(c) for furnishing inaccurate of income is initiated..”
4. He further referred to the order of CIT(A) Para 4.3 (b) which reads as under: - “4.3 (b) In respect of debts pertaining to other than Govt. Institutions which was deleted by CIT(A), department had filed appeal to ITAT. The ITAT vide order dated 28/6/2007, had set aside the matter to the AO for verification as to whether the same has been included in the income of the appellant. It is worth to mention here that as per
4.1 of the original assessment order dated 28/11/2003, the appellant was asked to furnish the details of the period to which corresponding sales pertains to. On this issue, the ITAT has remanded the matter to the AO. However, during reassessment proceedings, as well as during the current appellate proceedings the appellant has failed to furnish tails and information and establish that such bad debts had been included in the income of the appellant of the year under consideration or in earlier years. The disallowance of such bad debts pertaining to other than Govt. Institutions is therefore, upheld In the result, this ground of appeal is partly allowed.”
5. In view of these facts, the learned Counsel for the assessee stated that he filed evidences before CIT(A) in the shape of details of bad debts and the matter was referred to the AO for remand report and AO vide his remand report dated 11-07-2011 wanted copies of invoices of sales and copies of party ledger accounts of the parties which could not be collected. But the learned counsel for the assessee now stated that they have all the details, which are enclosed in assessee’s paper book at pages 1-75. According to him all these needs verification and for this matter can be remanded back to the file of the AO for fresh adjudication after considering all the evidences. When these evidences were confronted to the learned Sr. DR he only argued that when opportunity was allowed to assessee during assessment proceedings or during remand proceedings in second round, he failed to submit any detail whatsoever.
We have gone through the facts in entirety and also gone through the paper books of the assessee and find that the invoices and ledger account copies are filed, which needs verification by the AO. Hence, in interest of justice, we again restore back the matter to the file of the AO for fresh adjudication after allowing reasonable opportunity of being heard to the assessee. The appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 13-12-2016.