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Income Tax Appellate Tribunal, “D”, BENCH KOLKATA
Before: SHRI S.S.VISWANETHRA RAVI, JM, & DR. A.L.SAINI, AM
O R D E R
Per Dr. Arjun Lal Saini, AM:
The captioned appeal filed by the Assessee, pertaining to the assessment year 2006-2007, is directed against the order passed by the ld. Commissioner of Income Tax (Appeals)-2, Kolkata, in Appeal No.791/CIT(A)-2/14-15, dated 29.07.2016, which in turn arises out of an order passed by the Assessing Officer u/s.144 of the Income Tax Act 1961, (hereinafter referred to as the ‘Act’), dated 31.12.2008.
Brief facts of the case qua the assessee are that the assessee’s case was selected for scrutiny u/s.143(3) of the Act and the AO has completed the assessment u/s. 144 of the Act by making addition on account of interest received from Radha Furnishing of Rs.3,15,177/-.
SKBG Investment Pvt. Ltd. 3. Not being satisfied with the order passed by the AO, the assessee filed an appeal before the CIT(A), who has confirmed the order passed by the AO observing the followings :-
“I have considered the remand report of the AO as mentioned above. Keeping in view of the above, the AO is directed to delete the addition made on account of interest income and this ground of appeal is allowed. As regards to disallowance of the loss, I have considered the ground of appeal and submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the materials available on record before the assessing officer during the assessment proceedings. I have come to the conclusion that the ground of appeal as raised by the AR of the assessee is not arises out of the impugned assessment order. In view of the above, the ground of appeal as raised by the AR of the assessee relating to loss is rejected. This ground of appeal is dismissed. In the result, the appeal of the appellant is partly allowed.”
Not being satisfied with the order of ld. CIT(A), the assessee is in further appeal before us and has taken the following grounds of appeal :-
1. For that on the facts and in the circumstances of the case, the Ld Commissioner of Income Tax (Appeals) erred by not considering the remand report of the assessing officer in full and such action of the Ld CIT(A) is arbitrary, unjustified, unwarranted and illegal.
2. For that on the facts and in the circumstances of the case, the Ld Commissioner of Income tax (Appeals) erred in not allowing the entire expenses claimed at Rs 5,21,883/- and restricting the same to Rs. 3,17,728/-being the interest income during the year and such action of the Ld CIT(Appeals) is arbitrary, unjustified unwarranted and illegal. 3. For that on the facts and in the circumstances of the case, the Ld commissioner of Income Tax (Appeals) erred in arriving at a finding that the ground of appeal
regarding the expenses claimed doesn't arise out of the assessment order and such finding is arbitrary, unjustified and unwarranted and illegal.
4. For that the appellant craves indulgence to add, amend, alter and/ or modify the grounds on or before the hearing of the appeal.
Although in this appeal, the assesse has raised multiple grounds of appeal but at the time of hearing the solitary grievence of the assesse has been confined to the issue that assesse claimed expenses at Rs. 5,21,883/- but ld CIT (A) has restricted up to Rs. 3,17,728/- 5.1 Ld. AR for the assessee has submitted before us that the ld. CIT(A) did not allow the entire expenses claimed by the assessee at Rs.5,21,883/-. The ld CIT (A) allowed only Rs. 3,17,728/- out of total expenditure at Rs. 5,21,883/-, which is unjustified. The Ld. AR for the assessee further pointed out that the assessee has shown interest income at Rs.3,17,728/- and he has claimed the expenditure to the tune of Rs.5,21,883/-. The expenses of Rs.5,21,883/- includes Rs.5 lakhs as bad debts, which has been shown by the assessee as irrecoverable amount from Radha Furnishings. The bad debts of Rs.5 lakhs which has been shown in assessment year 2006-07, has been recovered by the assessee in assessment year 2009-2010 and the assessee has shown Rs.5 lakhs as an income in the assessment year 2009-2010 and paid the income tax thereon, i.e. the amount of Rs.5 lakhs which has been claimed by the assessee as a bad debt expenses has been recovered by the assessee subsequently in assessment year 2009-2010 and the assessee has offered Rs. 5 lakhs for the purpose of taxation and paid the income tax thereon. Therefore, if Rs.5 lakhs is not allowed as bad debt in the assessment year 2006-07 then it would amount to double taxation, which is not justifiable. The assessee has submitted written submissions before the ld. CIT(A) and requested to consider the expenditure of Rs.5,21,883/-, but Ld. CIT(A) did not consider it at all.
SKBG Investment Pvt. Ltd. 5.2. On the other hand, ld. DR for the revenue has agreed that since the assessee has offered Rs.5 lakhs for taxation purpose in the assessment year 2009-2010, therefore, bad debts claimed by the assessee at Rs.5 lakhs in the assessment year 2006-07 should be allowed.
5.3. Having heard the rival submissions, perused the material on record, we are of the view that there is merit in the submissions of the assessee, as the proposition canvassed by ld. AR for the assessee are supported by the facts narrated by him above. As Ld. AR for the assessee has fairly stated that Rs.5,21,883/- is a expenditure claimed by the assessee in his profit and loss account which has not been allowed by the AO/CIT(A). The expenditure of Rs.5,21,883/- pertains to the assessment year 2006-07 where the assessee has shown the interest income at Rs.3,17,728/-. The amount of expenditure of Rs.5,21,883/- includes Rs.5 lakhs which was shown by the assessee as bad debts for assessment year 2006-07. Later on, the said bad debts of Rs.5 lakhs has been recovered by the assessee in assessment year 2009-2010 and the assessee has offered the same for taxation and paid the taxes thereon. Therefore, considering the factual position, the bad debts claimed by the assessee in assessment year 2006-07 at Rs.5,00,000/- should be allowed ( which is included in Rs,5,21,883/-), otherwise, it would tantamount to double taxation.
Accordingly, we allow the appeal of the assessee. Since the assessee has submitted before us some additional evidences like, the profit and loss account for assessment year 2009-2010, computation of total income