RADHAKRISHNA FOODLAND CARRIERS P.LTD,THANE vs. DCIT RG 8(3), MUMBAI

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ITA 5106/MUM/2014Status: DisposedITAT Mumbai29 June 2016AY 2010-113 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the provision for doubtful debts was not claimed as an expense in the preceding year, there was no occasion to make an addition in the current year when it was written back. The addition was made due to a misappreciation of facts.

What were the facts?

The assessee appealed an addition made by the Assessing Officer and confirmed by the CIT(A) on account of provision for doubtful debts written back. The assessee argued that the provision was not claimed as an expense in the preceding year when created.

What were the issues?

Whether the write-back of a provision for doubtful debts, which was not claimed as an expense in the prior year, is taxable in the current year.

Which sections of the Income-tax Act were involved?

None explicitly mentioned as the core of the dispute, but the assessment was under Section 143(3).

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI

Before: SHRI JOGINDER SINGH & SHRI ASHWANI TANEJA (ACOUNTANT MEMBER)

For Appellant: Shri M.A. Gohel
For Respondent: Shri Rakesh Ranjan

O R D E R Per ASHWANI TANEJA, AM:

This appeal has been filed by the assessee against the order of Commissioner of Income-tax (Appeals)-18, Mumbai [hereinafter called CIT(A)] against order passed u/s 143(3) dt 28-2-2013 for A.Y. 2010-11.

2.

The solitary ground raised by the assessee in this appeal is that addition made for a sum of Rs.13,212,237 on account of provision for doubtful debts written back by the assessee was wrongly added by the Assessing Officer and wrongly confirmed by Ld.CIT(A) also.

3.

During the course of hearing, it was submitted by the Ld. counsel of the assessee that in the immediately preceding year, when the provision for doubtful debt was created, the same was not claimed as an expense, but it was voluntarily added back in the computation sheet. Our attention was drawn on the computation sheet for A.Y. 2009-10 to confirm this fact. Our attention was also drawn on the details submitted before the lower authorities vide letter dt 19-2-2013 wherein complete details were submitted. It was submitted that lower authorities could not understand the accounting adjustment made in this regard and the addition has been made due to miss-appreciation of facts.

4.

Per contra, the Ld. DR relied upon the orders of lower authorities.

5.

We have gone though the orders of lower authorities and paper book shown to us containing requisite details and evidences. It is noted that in A.Y. 2009-10, no claim was made by the assessee on account of provision for doubtful debts. Under these circumstances, there arises no occasion for making addition in the impugned year, when provision for doubtful debts has been written back by the assessee. The assessee has made claim of only debts actually written off in the year under consideration. In our opinion, the addition was made by the Assessing Officer due to non appreciation of facts correctly. The addition has been wrongly made as per facts, and therefore, the same is directed to be deleted.

6.

As a result, appeal filed by the assessee is allowed.

Order was pronounced in the open court at the conclusion of hearing.

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