ITO, Noida v. Shri Ved Prakash Sachdev, Noida

ITA 1484/DEL/2016 | 2011-2012
Pronouncement Date: 09-11-2017 | Result: Dismissed

Appeal Details

RSA Number 148420114 RSA 2016
Assessee PAN ABDPS5802N
Bench Delhi
Appeal Number ITA 1484/DEL/2016
Duration Of Justice 1 year(s) 7 month(s) 22 day(s)
Appellant ITO, Noida
Respondent Shri Ved Prakash Sachdev, Noida
Appeal Type Income Tax Appeal
Pronouncement Date 09-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 09-11-2017
Assessment Year 2011-2012
Appeal Filed On 18-03-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENCH NEW DELHI BEFORE SHRI B.P. JAIN ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAV A JUDICIAL MEMBER ITA NO. 148 4 /D EL /20 1 6 [ ASSESSMENT YEAR : 20 11 - 12 ] THE I.T. O VS. SHRI VED PRAKASH SACHDEVA WARD 2(5) PROP. SAM OVERSEAS NOIDA B - 83 SECTOR 83 NOIDA PAN : A BDPS 5802 N [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 8 . 1 1 . 201 7 DATE OF PRONOUNCEMENT : 09 . 1 1 .201 7 ASSESSEE BY : NONE REVENUE BY : SHRI S .K. JAIN SR. DR ORDER PER B.P. JAIN ACCOUNTANT MEMBER T H IS APPEAL FILED BY THE REVENUE ARISE S FROM THE ORDER OF THE CIT(A) - I NOIDA VIDE ORDER DATED 28 / 12 /201 5 FOR A.Y 20 11 - 12 . 2 . T HE REVENUE HAS RAISED THE FOLLOWING GROUND S OF APPEAL : 2 1. THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1 57 67 013/ - MADE BY THE AO ON ACCOUNT OF BAD DEBTS AS WRITTEN OFF TREATING NOT GENUINE IN VIEW OF RBI GUIDELINES 2. THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADD ITION OF RS.3 60 000/ - MADE BY THE AO U/S 40A(3) OF THE ACT HOLDING THAT ONCE HT BOOKS OF ACCOUNTS HAVE BEEN ACCEPTED BY THE AO HE CANNOT HOLD THE INDIVIDUAL ISSUE RECORDED IN THE BOOKS OF ACCOUNTS TO BE INCORRECT. . 3. NONE APPEARED ON BEHALF OF THE ASS ESSEE. THEREFORE WE ARE PROCEEDING TO DECIDE THE ISSUE EXPARTE QUA THE ASSESSEE AFTER HEARING THE LD. DR AT LENGTH WHO RELIED ON THE ORDERS OF THE AO AND PERUSED THE RELEVANT MATERIAL ON RECORD. 4. BRIEFLY STATED THE FACTS OF THE CASE PERTAINING TO BOTH THE GROUNDS ARE THAT THE ASSESSEE HAS CLAIMED THE AMOUNT OUTSTANDING IN RESPECT OF 13 DEBTORS AMOUNTING TO RS. 1 57 67 013/ - ON THE BASIS OF INSTRUCTIONS ISSUED BY THE RESERVE BANK OF INDIA FOR PERMITTING WRITE OFF OF THE BAD DEBTS. HOW EVER THE AO WAS OF THE OPINION THAT THE WRITE OFF 3 CLAIMED BY THE ASSESSEE AS BAD DEBTS WERE NOT GENUINE AND NOT ALLOWABLE. ACCORDINGLY HE REJECTED THE CLAIM OF THE ASSESSEE WITH REGARD TO BAD DEBTS. 5. AS REGARDS THE ADDITION OF RS. 3 60 000/ - MADE U/S 40A(3) OF THE INCOME - TAX ACT 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' IT WAS HELD BY THE AO THAT THE ASSESSEE HAD SHOWN PAYMENTS EXCEEDING RS. 20 000/ - IN ONE GO IN A SINGLE DAY AND THE SAME HAS BEEN BIFURCATED IN MULTIPLE OF DAYS SO THAT PAYMENT OF CAS H SHOULD NOT EXCEED RS. 20 000/ - ON A SINGLE DAY EITHER IN AGGREGATE OR INDIVIDUALLY SO AS TO SAVE FROM PROVISIONS OF SECTION 40A(3) OF THE AC T . ACCORDINGLY THE AO DISALLOWED THE PAYMENTS SO MADE U/S 40A(3) OF THE ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 6. THE CIT(A) ALLOWED RELIEF TO THE ASSESSEE ON BOTH THE COUNTS VIDE PARAS 7 AND 8 OF HIS ORDER FOR THE REASONS MENTIONED HEREINBELOW: THE LAW RELATING TO THE WRITING OFF OF THE BAD DEBTS IS FAIRLY WELL SETTLED. ONCE AN ASSESSEE CHOOSES T O WRITE OFF A PARTICULAR DEBT ON THE GROUND THE SAME HAS BECOME BAD. THE ASSESSEE HAS THE FREEDOM TO ARRIVE AT SUCH A DECISION. NECESSARY ENTRIES ORE 4 REQ UIRED TO BE MADE IN THE BOOKS OF ACCOUNTS AND IF THE SAME HAS BEEN DONE THE ID. A.O. HAS NO JURISDICTION TO REJEC T T HE SAME. IN THE INSTANT CASE - THE APPELLANT HAS FOLLOWED THE DUN PROCEDURE TO WRITE OFF CERTAIN DEBTS HOLDING THAT THE SAME HAS BECOME BAD. THE ID . A.O. COULD NOT HAVE QUESTIONED THE DISCRETION OF THE APPELLANT IN DOING THE SAME IN ANY CASE THE WRITE OFF IS ALWAYS SUBJECT TO THE CONDITION THAT ANY RECOVERY IN FUTURE WILL BE LIABLE TO B E INCLUDED IN THE INCOME OF THE APPELLANT. IN VIEW OF THIS I DO NOT FIND ANY FORCE IN THE STAND OF THE ID. A.O. FURTHER THE ID. A.O. HAS HELD THAT THE BAD DEBTS WHICH WERE WRITTEN OFF WERE NOT GENUINE. I AM UNABLE TO COMPREHEND WHAT WAS INTENDED BY THE ID. A.O IF THE DEBTS WERE NOT GENUINE THE SAME NEEDED TO BE PROV ED. AS IN THE YEARS WHEN THE DEBTS WERE INCURRED THERE WAS NO SUCH CONCL USION DRAWN BY THE REVENUE IT IS NOT OPEN TO THE REVENUE TO ARRIVE AT SUCH A CONCLUSION IN THE YEAR WHEN THE DEBTS ARE WRITTEN OFF ON THE GROUNDS OF BEING BAD. IN VIEW OF THIS I AM U NABLE TO UPHOLD THE ORDERS OF THE ID. A.O. ON THE ISSUE OF ADDITION OF BAD DEBTS ON THE GROUNDS OF NOT BEING GENUINE. THE SAME IS THEREFORE DELETED. THE APPELLANT GETS RELIEF OF RS.1 57 67 013/ - . 8. THE ADDITION OF RS. 3 60 000/ - CAN ALSO NOT BE SUSTAINED AS ADMITTEDLY THE APPELLANT HAS RECORDED THE TRANSACTIONS ON VARIOUS DATES WITHIN THE LIMIT PRESCRIBED U/S. 40(A)(3) OF THE I T. ACT 1961. THE CONTENTION OF THE ID. A.O. THAT THE SAME WAS DONE DELIB ERATELY HAS NO STRENGTH IN LAW. ONCE THE BOOKS OF ACCOUNTS WERE VERIFIED AND ACCEPTED BY THE ID. A.O IT IS NOT OPEN TO HIM TO I MPUTE SUCH MANIPULATION OF BOOKS OF ACCOUNTS THAT TOO WITHOUT REJECTING THE BOOKS OF ACCOUNTS AND WITHOUT BRINGING ANY EVIDENCE ON THE RECORD T O . PROVE THE SAM E . IN VIEW OF THE FACT THAT THE AO HAS ACTED M ERELY O N ITS OPINIO N AND N OT ON THE BASIS O F THE MATERIAL EVIDENCE THE ADDITION OF RS. 3 60 0 00/ - CANNOT BE SU STAINED I N THE EYES OF THE L AW. THE SAME IS THEREFORE DELETED AND APP ELLANT GETS RELIEF TO THAT EXTENT. 5 7 . AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR WE FIND THAT AS PER SECTION 36(1)( VII) OF THE ACT IF THE ASSESSEE HAS WRITTEN OFF BAD DEBTS AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR THE SAME IS ALLOWABLE. THE PROVISIONS IN THE ACT SIMPLY SPEAK OF PASSING THE ENTRY FOR BAD DEBTS BY THE ASSESSEE AND THE AO CANNOT QUESTION THE SAME. THEREFORE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) WHO HAS ALLOWED THE CLAIM OF THE ASSESSEE REGARDING BAD DEBTS. THE GROUND RAISED BY THE REVENUE ON THIS COUNT IS DISMISSED . 8. AS REGARDS THE ADDITION OF RS. 3 60 000/ - THE OBSERVATION OF THE AO IS THAT THE SAME WAS DONE DELIBERATELY I.E. THE PAYMENTS HAVE BEEN BIFURCATED TO LESS THAN RS. 20 000/ - TO AVOID THE INVOCATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. IN THIS REGARD THE AO ON THE ONE HAND HAS ACCEPTED THE BOOKS OF ACCOUNTS WHEREAS ON THE OTHER HAND HE HAS NOT REJECTED THE SALE AND HAS NOT FOUND ANY DEFECT IN SUCH PAYMENTS. IN SUCH FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) WHO HAS 6 ALLOWED THE CLAIM OF THE ASSESSEE. ACCORDINGLY BOTH THE GROUNDS OF THE REVENUE ARE DISMISSED. 9 . IN THE RESULT THE APPEAL OF THE REVENUE IN ITA NO. 1484/DEL/2016 IS DISMISSED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 0 9 .1 1 .2017. S D / - S D / - [ SUDHANSHU SRIVASTAV A] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 9 T H NOVEM BER 201 7 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR ITAT NEW DELHI