EAGLE FREIGHT FORWARDERS P.LTD,MUMBAI vs. ITO 1(1)(3), MUMBAI

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ITA 743/MUM/2013Status: DisposedITAT Mumbai12 August 2016AY 2004-053 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee had produced additional evidence before the CIT(A) which was not properly considered by the lower authorities. Therefore, the matter was restored to the Assessing Officer for fresh adjudication.

What were the facts?

The assessee claimed bad debts of Rs. 78.10 lakhs. The Assessing Officer disallowed this amount as the assessee failed to provide details of when the income was offered to tax. The CIT(A) upheld the disallowance.

What were the issues?

Whether the disallowance of bad debts was justified without proper consideration of the evidence produced by the assessee.

Which sections of the Income-tax Act were involved?

Section 36(2),Section 143

AI-generated summary — verify with the full judgment below

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद�य लेखा लेखा सद�य सद�य राजे�� सद�य राजे�� राजे�� केकेकेके अनुसार राजे�� अनुसार अनुसार PER RAJENDRA, AM- अनुसार Challenging the order dated 30.11.2012 of CIT(A)-4,Mumbai the assessee has filed the present appeal.Assessee-company,engaged in the business of transportation of goods and cargo,filed its return of income 1.11.2004,declaring total income at Rs.(-)44.61 lakhs.The Assessing Officer(AO)completed the assessment,u/s.143 of the Act,on 29.12.2006 determining its income at Rs.NIL after adjusting the losses of the earlier AY.s.

2.Solitary ground of appeal is about confirming the disallowance of bad debts, amounting to Rs.78.10 lakhs.During the assessment proceedings,the AO found that the assessee had debited under the head administrative and other expenses an amount of Rs.78,10,838/-on account of bad debts written off.He asked the assessee to furnish the year in which the income which was claimed to be bad debts was offered to tax or the receipt/sale etc.was credited in the P&L account.Vide its letter dtd.18.12.2006,the assessee filed its reply in that regard.As per the AO the assessee did not furnish the details as to when the 743/M/13 Eagle Freight Forwarders Pvt. Ltd. income,claimed as bad debts,was offered for taxation.He added the disputed amount to the total income of the assessee.

3.Aggrieved by the order of the AO, the assessee is in appeal before the FAA. Before him,it filed certain additional evidences.He called for a remand report from the AO.After considering the remand report, the FAA held that the assessee had not produced any evidence before the AO, that it had failed to prove that bad debts claimed by it were ever considered for computing the income of the assessee in the earlier years, that the conditions of section 36 (2) of the Act were not fulfilled. He dismissed the appeal filed by the assessee.

4.During the course of hearing before us, the Authorised Representative (AR) stated that, the assessee had produced additional evidence as before the FAA, that it had filed the details of invoices and Bill amounts in the case of Nava Sheva International Container Terminal Ltd.(pg.5A of the PB), Consolidated Marine Services Pvt. Ltd. along with the ledgers and the reconcilliation statements, that the documents were not considered by either of the authorities.The Departmental Representative(DR) supported the order of the FAA.

5.We have heard the rival submissions and perused the available material. We find that the assessee had filed certain documents before the FAA during the appellate proceedings, that he had called for remand report from the AO, that while forwarding the report,the AO did not comment upon any of the evidences, he did not consider the various documents forwarded to him by the FAA,that he simply decided the issue against the assessee for its non-appearance, that the FAA also did not adjudicate the issue on merits. Therefore,we are of the opinion that,in the interest of justice,the matter should be restored back to the file of the AO for fresh adjudication.The assessee is directed to appear before the AO and 2

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