Income Tax Appellate Tribunal - Mumbai
Deepak A Shah, Navi Mumbai vs Department Of Income Tax on 10 November, 2008
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" Bench, Mumbai
Before Shri R.K. Gupta, Judicial Member
and Shri B. Ramakotaiah, Accountant Member
ITA No. 1930/Mum/2009
(Assessment Year: 2000-01)
Income Tax Officer 22(1)-1 Shri Deepak A. Shah
4th Floor, Tower No. 6 Vs. 21 LIL Niwas, Derasar Lane
Vashi Rly Stn. Complex Ghatkpoar (E), Mumbai 400077
Vashi, Navi Mumbai PAN - AAFPS 7609 M
Appellant Respondent
Appellant by: Smt. Chandra Ramkrishnan
Respondent by: Shri Pravin N. Shah
ORDER
Per B. Ramakotaiah, A.M.
This appeal by the Revenue is against the order of the CIT(A)-XXII, Mumbai dated 10.11.2008.
2. Revenue has raised the following grounds: -
"1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition of Rs.19,03,241/- made by the A.O. on account of claim of bad debt without appreciating the fact that inspite of giving several opportunities, the assessee was unable to prove the genuineness of the claim of bad debt.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the assessee's representative himself had expressed his inability to submit the requisite details and therefore documents were accepted in contravention of Rule- 46A."
3. Briefly stated, assessment in this case was originally completed under section 144 of the I.T. Act and the order was confirmed by the CIT(A), but set aside to the A.O. by the ITAT "D" Bench, Mumbai vide order in ITA No. 817/Mum/2004 dated 24.05.2006. One of the issues contested in all the proceedings was write off of bad debt claim of Rs.19,03,251/- pertaining to various debts in the books of account of ABG Corporation, which is one of the three proprietary concerns owned by the assessee. The A.O. in 2 ITA No. 1930/Mum/2009 Shri Deepak A. Shah reassessment proceedings did not accept the claim of bad debt on the pretext that inspite of giving sufficient opportunities the assessee failed to produce the necessary evidences that the debts have become bad. It was assessee's contention that the books of accounts were originally damaged in the earth quake in Ahemdabad and for that reason the matter was restored back to the A.O. to give enough opportunity and decide issue afresh. It was assessee's contention that the A.O. has not considered the various letters filed on different dates and the learned CIT(A) examined the issue exhaustively in para 7.5, considered the provisions of law in para 7.6 and allowed the claim of the assessee, hence the present appeal.
4. As far as the merits and legal principles are concerned the issue is now crystallised by the decision of the Hon'ble Bombay High Court in the case of DCIT vs. Oman International Bank 313 ITR 128 and CIT vs. Star Chemicals (Bombay) Ltd. 313 ITR 126. The same principle was upheld by the Hon'ble Supreme Court in the case of TRF Ltd. vs. CIT (civil appeal 5293 of 2003 dt.09-02-10) wherein the Hon'ble Supreme Court has held that bad debt need not be proved to be irrecoverable under section 36(1)(vii) and it is sufficient if they were written off in the books of account as irrecoverable. The facts as stated by the CIT(A) indicate that the assessee has written off the amount and accordingly there is no need to consider ground No. 1.
5. With reference to ground No. 2 the CIT(A) has analysed the findings by the A.O. and the non-furnishing of details by the assessee before the A.O. The assessee has furnished copy of the ledger account of M/s. ABG Corporation before the CIT(A) in the first round of appeal. It is also on record that the learned CIT(A) has dismissed the appeal of the assessee, filed earlier on the same ground, as the learned A.R. of the assessee could not explain whether the debt claim have become bad or not. In the re-assessment proceedings the assessee has furnished copy of the ledger account to the AO and the same were produced before the CIT(A). Since the copy of the ledger account was already on record at the time of proceedings in the first round and they were furnished before the A.O. also, we do not see how provisions Rule 46-A have been violated. There is nothing on record to 3 ITA No. 1930/Mum/2009 Shri Deepak A. Shah indicate that these are fresh documents. Accordingly, there is no merit in the ground of the Revenue. Since the matters are considered in the reassessment proceedings and assessee and CIT(A) have relied on the documents furnished in the first round of assessment proceedings the Revenue ground 2 is dismissed.
6. In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 19th March 2010.
Sd/- Sd/-
(R.K. Gupta) (B. Ramakotaiah)
Judicial Member Accountant Member
Mumbai, Dated: 19th March 2010
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A) - XXII, Mumbai
4. The CIT- XXII, Mumbai City
5. The DR, "D" Bench, ITAT, Mumbai
By Order
//True Copy//
Assistant Registrar
ITAT, Mumbai Benches, Mumbai
n.p.