DCIT, New Delhi v. M/s Image India Pvt. Ltd., New Delhi

ITA 1299/DEL/2011 | 2006-2007
Pronouncement Date: 16-09-2011 | Result: Dismissed

Appeal Details

RSA Number 129920114 RSA 2011
Bench Delhi
Appeal Number ITA 1299/DEL/2011
Duration Of Justice 6 month(s) 2 day(s)
Appellant DCIT, New Delhi
Respondent M/s Image India Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 16-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 16-09-2011
Date Of Final Hearing 14-09-2011
Next Hearing Date 14-09-2011
Assessment Year 2006-2007
Appeal Filed On 14-03-2011
Judgment Text
ITA NO. 1299/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 1299/DEL/2011 A.Y. : 2006-07 DCIT CIRCLE-11(1) VS. M/S IMAGE INDIA PVT. LTD. NEW DELHI F-3/12 OKHLA INDUSTRIAL AREA ROOM NO. 312 CR BUILDING PHASE-I NEW DELHI NEW DELHI (PAN : AAAC12979R) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : NONE DEPARTMENT BY : SH. SALIL MISHRA SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 08.12. 2010 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE FIRST ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF ` 1 76 035/- ON ACCOUNT OF DEPRECATION ON COMPUTER PERIPHERALS. 3. IN THIS CASE ASSESSING OFFICER NOTED THAT ASSES SEE HAS CLAIMED DEPRECIATION ON COMPUTER PERIPHERALS @ 60%. ASSESSI NG OFFICER WAS OF THE OPINION THAT 15% DEPRECATION IS ALLOWABLE. ACCORDINGLY HE DISALLOWED THE CLAIM OF ` 176035/- ON THIS ACCOUNT. ITA NO. 1299/DEL/2011 2 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT PRINTER SCANNER UPS ARE THE PA RT OF THE COMPUTER AND NOT OF MACHINERY AND HENCE HE DIRECTED THE ADD ITION OF ` 1 76 035/- BE DELETED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RELEVANT RECORDS. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER IN OUR CONSIDERED OPINION THE MATTER CAN BE ADJUDICATED UPON BY HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSING THE RECORDS. WE FIND THAT JURISDICTIONAL HIGH COU RT IN ITA NO. 1266/DEL/2010 IN THE CASE OF C.I.T. VS. BSES RAJDHANI POWERS LIMITED VIDE ORDER DATED 31.8.2010 HAS HELD THAT THE COURT WAS IN AGREEMENT WITH THE VIEW OF THE TRIBUNAL THAT THE COMPUTER PER IPHERALS SUCH AS PRINTER SCANNER ETC. FORM AN INTEGRAL PART OF COMPU TER SYSTEM. IN FACT THE COMPUTER ACCESSORIES AND PERIPHERALS CANNOT BE U SED WITHOUT THE COMPUTER. CONSEQUENTLY AS THEY ARE THE PART OF TH E COMPUTER SYSTEM THEY ARE ENTITLED TO DEPRECIATION @ 60%. RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. THE NEXT ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF ` 21022 28/- ON ACCOUNT OF BAD DEBT. 8. ON THIS ISSUE ASSESSING OFFICER NOTED THAT ASSE SSEE HAS CLAIMED 2102228/- AS BED DEBT. THE ASSESSEE WAS REQUIRED TO JUSTIFY THE SAME. ASSESSING OFFICER NOTED THAT IN WRITTEN S UBMISSION THE ITA NO. 1299/DEL/2011 3 ASSESSEE SUBMITTED ONLY THE LEDGER ACCOUNTS OF THE S AME WITHOUT MENTIONING THE PARTIES AGAINST WHICH SUCH DEBTS HAVE BEEN WRITTEN OFF. ASSESSING OFFICER FURTHER HELD THAT TWO BASIC CONDI TIONS THAT THE ASSESSEE REQUIRES TO PROVE ON RECORD WHICH ARE : (I) THE DEBTS HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF TH E ASSESSEE OF THAT PREVIOUS YEAR OR OF AN EARLIER PREVIOUS YEAR; AND (II) SUCH DEBTS HAVE BEEN WRITTEN OFF AS IRRECOVERABLE IN THE ACCOU NTS OF THE ASSESSEE FOR THAT PREVIOUS YEAR. ASSESSING OFFICER HELD TH AT BOTH THESE CONDITIONS HAVE NOT BEEN ESTABLISHED BY THE ASSESSE E. THEREFORE THE CLAIM IS DISALLOWED AND ADDED TO THE TOTAL INCOME. 9. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) IT WAS SUBMITTED THAT ASSESSING OFFICER HAS NOT DEMANDED THE DETAIL OF BAD DEBTS EXCEPT COPY OF LEDGER ACCOUNT AND HAS NOT AL SO ASKED FOR ANY JUSTIFICATION FOR ALLOWABILITY OF BAD DEBTS. THE ASS ESSEE SUBMITTED THAT AS PER SECTION 36(2)(I) OF THE ACT DEDUCTION FOR B AD DEBTS SHALL BE ALLOWED IF SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARLIER PREVIOUS YEAR. IN THE PRESENT CASE ASSESSEE HAS T AKEN THE AMOUNT OF BAD DEBTS INTO INCOME DURING THE PREVIOUS FINANCIA L YEARS AND WRITTEN OFF IN THE PRESENT FINANCIAL YEAR. IT WAS SUBMIT TED THAT IN ASSESSEES CASE THE BAD DEBTS WERE ACTUALLY BAD AND NOT IRREC OVERABLE AT ALL AND WHEN THE ASSESSEE COMPANY KNEW THAT IT WILL NOT BE R ECOVERED IT IS GOOD ACCOUNTING PRACTICE TO WRITE IF OFF INSTEAD T O SHOWING IT AS AN ASSET. LD. COMMISSIONER OF INCOME TAX (APPEALS) PROCE EDED TO ALLOW THE ASSESSEES CLAIM IN THIS REGARD. 10. AGAINST THE ABOVE ORDER THE REVENUE IS IN APP EAL BEFORE US. ITA NO. 1299/DEL/2011 4 11. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSED THE RELEVANT RECORDS. NONE APPEARED ON BE HALF OF THE ASSESSEE. HOWEVER IN OUR CONSIDERED OPINION THE MATTER CAN BE ADJUDICATED UPON BY HEARING THE LD. DEPARTMENTAL REP RESENTATIVE AND PERUSING THE RECORDS. WE FIND THAT IT WAS THE SUBMITTED TO THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT THE AMOUNT WAS TAKEN INTO ACCOUNT AS INCOME IN THE EARLIER PREVIOUS YEAR AND A MOUNT WAS GENUINELY WRITTEN OFF IN THE CURRENT ASSESSMENT YEA R WHEN IT BECAME BAD. WE FIND THAT THERE IS NO JUSTIFICATION FOR DIS ALLOWANCE OF BAD DEBT CLAIM OF THE ASSESSEE IN THIS REGARD. THE ASSESSIN G OFFICER HAS NOT BROUGHT ON RECORD ANY COGENT MATERIAL TO PROVE TH AT THE CLAIM OF BAD DEBT IS NOT ALLOWABLE. HENCE WE UPHOLD THE ORDER O F THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 12. IN THE RESULT THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/9/2011. SD/- SD/- [I.P. BANSAL] [I.P. BANSAL] [I.P. BANSAL] [I.P. BANSAL] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 16/9/2011 SRB COPY FORWARDED COPY FORWARDED COPY FORWARDED COPY FORWARDED TO: TO: TO: TO: - -- - 1.APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES