Search Results Page
Search Results
1 - 7 of 7 (0.02 seconds)Trf Ltd vs Commnr. Of Income Tax on 9 February, 2010
3.2. We have heard the rival submissions and perused the materials available on record.
We are in agreement with the arguments of the Learned AR that the substance of the
transaction is to be seen and that would always prevail over its form. Hence by the fact
that the assessee had categorized as 'advances written off' in his books alone would not be
the determinative factor for deciding the legitimate claim of deduction of the assessee. We
find from the paper book of the assessee that the assessee duly offered the sum of Rs.
26,06,750/- as income in Asst Year 2008-09 while raising the debit note dated 15.1.2008
in favour of M/s Stein Heurtey Bilbao for the work carried out by the assessee on behalf
of the said party. We also find that the said party had settled the dues other than this
amount on 30.7.2009 and hence the subsequent conduct of the said party also justifies the
conscious decision taken by the assessee to write off the part of the debit note amount in
the sum of Rs. 13,60,091/- in Asst Year 2009-10 itself. We find that the assessee had duly
complied with the requirements stipulated in section 36(1)(vii) read with section 36(2) of
the Act in claiming the deduction towards bad debts to the tune of Rs. 13,60,091/- and
accordingly is duly entitled for deduction. We find that the decision of the Hon'ble
Supreme Court in the case of TRF Ltd vs CIT reported in 323 ITR 397 (SC) is directly in
favour of the assessee on the impugned issue, wherein it was held that post 1.4.1989, it is
not necessary for any assessee to establish that the debt in fact has become bad. The
Hon'ble Court has further held that if the debt has been written off in the books of
accounts then it would be enough to allow the deduction.
Commissioner Of Income-Tax vs V. Ramakrishna Sons Ltd. on 8 January, 1992
Further reliance is placed on the decision of CIT vs Y. Ramakrishna & Sons Ltd
reported in 326 ITR 315 (Mad), wherein it was held that:-)
"Held, dismissing the appeal, that the transaction of the asessee of
financing the subsidiary company was genuine and bona fide. The assessee
paid further advances in its own interest with a view to recover the amount
given earlier, to sustain a share and to avoid the guarantee being invoked.
The mere fact of payment of money after stoppage of interest from the
ITA No.91/Kol/2011-C-AM
M/s. Fives Stein (I) Projects P.Ltd 3
subsidiary company by itself could not be a ground to hold that the
transactions were not in the course of the business. There was no bar in law
for financing the subsidiary company. The income received by the assessee
from the subsidiary company by way of intrest was subjected to tax and the
advance made by the assessee to that company was also subjected to tax. At
the time of writing off the debt, the subsidiary company had accumulated
huge losses. The assessee also suffered a loss while selling the shares of the
subsidiary company which resulted in the subsidiary company ceasing to be
the subsidiary of the assessee. Therefore, in the circumstances the money
advanced by the assessee had become irrecoverable and was given during
the course of the business. What was not paid by the subsidiary company
was only the interest and there was no principal amount due at the time of
advancing the amount thereafter. The advances made by the assessee were
also utilized by the subsidiary company for the purpose for which they were
obtained which was to run the foundry. This would also indicate that the
amount had been given out of commercial expediency as well. Both the
Commissioner (Appeals) as well as the Tribunal had considered the
materials on record and came to the conclusion that the transactions
involved were true and genuine. They had also held that the advances had
been made during the course of the business and they had become
irrecoverable as bad debts and hence the assessee was entitled to the
benefit under section 36(1). The question as to whether a debt had become
bad or not was a pure question of fact and, therefore, it could not be
construed as a question of. Law."
Ifb Agro Industries Ltd. vs Deputy Commissioner Of Income Tax on 29 July, 2002
4.5. We have heard the rival submissions and perused the materials available on record.
We find from the paper book filed by the assessee that Sunshine Commotrade Pvt Ltd had
been rendering various services to the assessee in consideration for receipt of commission
at an agreed rate pursuant to a duly executed agreement entered into by the assessee for a
long time. We find that the revenue before us has not controverted the findings given by
ITA No.91/Kol/2011-C-AM
M/s. Fives Stein (I) Projects P.Ltd 6
the Learned CITA with regard to the nature of services rendered by the said party and the
validity of the agreement entered into with them. We also find from the declaration filed
by the Managing Director of the assessee and confirmation vide letter dated 19.7.2012
from Sunshine Commotrade Pvt Ltd that they are not related to the assessee within the
meaning of section 40A(2) of the Act and hence disallowance made by the Learned AO
on this wrong understanding of facts is not appreciated. We find that the assessee's case
is also covered by the decision of this tribunal in the case of IFB Agro Industries Ltd vs
CIT in ITA No. 3756 (Cal.) 92 , 382 & 383 (cal.)/90 for Asst Years 1985-86 , 1984-85 &
1995-96 dated 9.4.1996 wherein it was held as follows:-
Radhasoami Satsang, Saomi Bagh,Agra vs Commissioner Of Income Tax on 15 November, 1991
M/s. Fives Stein (I) Projects P.Ltd 7
Reliance in this regard is placed on the decision of the Hon'ble Apex Court in the case of
Radhasoami Satsang vs CIT reported in 193 ITR 321 (SC), wherein it was held that :
Finance (No. 2) Act, 2019
Commissioner Of Income Tax.,New Delhi vs M/S Sun Pharmaceuticals Industries ... on 4 August, 2014
As held by Hon'ble Bombay High Court
in Glenmark's case (supra), the amendment in section 194C which lays down
that purchase of goods made as per the specifications of buyer will not attract,
the provisions of section 194C is only clarificatory in nature and will hold
filed for the earlier years as well. There is no contrary decision by the Hon'ble
ITA No.91/Kol/2011-C-AM
M/s. Fives Stein (I) Projects P.Ltd 11
jurisdictional High Court, or, for that purpose by any other High Court. The
esteemed views of Hon'ble Bombay High Court, therefore, bind us as well.
1