TRITON HEALTH CARE PRIVATE LIMITED,CHENNAI vs. ACIT, CHENNAI
What did the Tribunal hold?
The Tribunal, agreeing with the proposal of the DR, set aside the CIT(A)'s order. The matter was remitted back to the AO for de novo examination after considering the details filed by the assessee.
What were the facts?
The assessee claimed bad debts of Rs. 13,62,187/-. The AO disallowed the claim as the debtors' ledger was not reduced except for a small amount, adding Rs. 13,60,822/- to the income. The CIT(A) confirmed the AO's order.
What were the issues?
Whether the bad debts written off to the P&L account but not in the debtors' ledger are allowable as a deduction.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI A. MOHAN ALANKAMONY & SHRI V. DURGA RAO
आदेश /O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-III, Chennai, dated 28.03.2014 relevant to the assessment year 2009-10.
Facts in brief are that the assessee is engaged in trading of pharmaceutical products. The assessee filed return of income declaring a total income of ` 55,93,370/-. The return filed by the assessee was processed under Section 143(1) of Income-tax Act, 1961 (in short 'the Act') and the assessment was completed under Section 143(3) of the Act. During the assessment proceedings, the A.O. observed that the assessee had written off an amount of ` 13,62,187/- being bad debts during the year. The A.O. has asked the assessee to furnish partywise breakup on the same and ledger extract of the respective debtors in its books. The assessee filed the same. However, the A.O. has noticed that the assessee has written off the respective debts in the debtors ledger only to an extent of ` 1,365/- in the case of Lakshmi Medicals and in respect of other debtors has not reduced the debtor balances. Hence, the A.O. has added an amount of ` 13,60,822/- being an amount of bad debts debited to Profit & Loss account but not written off as irrecoverable in the respective sundry debtors ledger, to the total income of the assessee.
When the assessee carried the matter in appeal before the Ld. CIT(Appeals), the Ld. CIT(Appeals) confirmed the order of the A.O. by observing that a sum of ` 1365/- in the case of Lakshmi Medicals was written off by the assessee and not in other cases.
This was pointed out by the AR during the course of hearing on 10.03.2014 and the same was accepted by him. Hence, the Ld. CIT(Appeals) confirmed the order of the A.O.
On being aggrieved, the assessee carried the matter in appeal before the Tribunal. The Ld.counsel for the assessee has submitted that the Ld. CIT(Appeals) without considering the submissions of the assessee, confirmed the order of the Assessing Officer. The assessee has filed a paper-book containing – (1)
Declaration from the authorized representative; (2) Copy of balance sheet, Profit & Loss account along with schedules for the financial year 2008-09; (3) Copy of letter filed before CIT(A) on 19.03.2014; (4) Copy of journal entry bearing no.798 dated 31.03.2009 and (5)
Copy of ledger extracts of parties claimed as bad debts.
On the other hand, the Ld. D.R. has submitted that the issue has to be remitted back to the file of the A.O. for fresh examination.
We have heard both sides and perused the records and gone through the orders of the authorities below. The Ld.counsel for the assessee has accepted the proposal made by the Ld. D.R. to remit back the issue to the file of the A.O. In view of this, we set aside the order passed by the Ld. CIT(Appeals) and remit the matter back to the file of the A.O. to decide the issue de novo after examining the details filed by the assessee and affording reasonable opportunity of being heard to it.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on Wednesday, the 25th of February, 2015 at Chennai.
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