DCIT, Central Circle - III, Kolkata v. Manoj Kumar Dhupelia, Kolkata

ITA 1837/KOL/2009 | 2006-2007
Pronouncement Date: 12-02-2010

Appeal Details

RSA Number 183723514 RSA 2009
Assessee PAN ADSPD4099F
Bench Kolkata
Appeal Number ITA 1837/KOL/2009
Duration Of Justice 3 month(s) 7 day(s)
Appellant DCIT, Central Circle - III, Kolkata
Respondent Manoj Kumar Dhupelia, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 12-02-2010
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 12-02-2010
Assessment Year 2006-2007
Appeal Filed On 04-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : KOLKATA [BEFORE HONBLE SHRI G.D.AGRAWAL SMT. DIVA SINGH JM] I.T. A. NO. 1837/KOL/2009 ASSESSMENT YEAR 2006-07 D.C.I.T. CENTRAL CIRCLE-III -VS- SHRI MANOJ KUM AR DHUPELIA KOLKATA KOLKATA PAN : ADSPD 4099 F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PIYUSH KOLHE SR. DR RESPONDENT BY : SHRI S.K.TULSIYAN ADVOCATE O R D E R PER SMT. DIVA SINGH JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)-XX KOLKATA DATED 14.08.2009 PERTAINING TO A.YR.2006-07 WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED BEFORE US :- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN ALLOWING OFFICE EXPENSES OF RS.10 75 713/- WHEN THE ASSESSEE HAS NOT BEEN CARRYING ON ANY BUSINESS ACTIVITIES FOR LAST SEVERA L YEARS. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING DEPRECIATION OF RS.1 19 729/- WHEN THE ASSESSEE HAS NOT BEEN CARRYING ON ANY BUSINESS ACTIVITIES FOR LAST S EVERAL YEARS. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS PATENTLY WRONG IN LAW AS WELL AS ON FACTS IN DIRECTING THE A O TO ALLOW DEDUCTIONS FOR BAD DEBT WRITTEN OFF OF RS.75 00 00/-. 4. ANY OTHER ISSUE WHICH MAY ARISE AT THE TIME OF H EARING. 2. AT THE TIME OF HEARING THE LD. AR MR.S.K.TULSIY AN ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE POINTS AT ISSUE ARE FULLY COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF THE ORDER OF KOLKATA BENC H IN ASSESSEES OWN CASE. ATTENTION WAS INVITED TO THE ORDER DATED 14 TH AUGUST 2009 WHEREIN THE DEPARTMENTAL APPEALS FOR 2004-05 AND 2005-06 A.YRS. WERE DISMISSED ON IDENTI CAL ISSUES BY THE COORDINATE 2 BENCH IN ITA NOS. 1100 & 1101/KOL/2008. DRAWING ATT ENTION TO THE SAME IT WAS SUBMITTED THAT THE CO-ORDINATE BENCH AT PAGE 2 OF T HE SAID ORDER HAD TAKEN COGNIZANCE OF THE OFFICE EXPENSES AND DEPRECIATION PERTAINING TO THE EARLIER YEARS AND THE SUBSEQUENT YEAR I.E. 2006-07 WHICH IS THE YEAR UNDE R CONSIDERATION IN THE PRESENT APPEAL. ACCORDINGLY AFTER CONSIDERING THE SAME FACT S AS ARE AVAILABLE ON RECORD TODAY AT PAGE 4 PARA-5 OF THE SAID ORDER THE TRIBUNAL HAD COME TO THE CONCLUSION THAT THE ASSESSEE IS CARRYING ON TRADE ACTIVITY IN SHARES AN D GOVT. SECURITIES AND NO DOUBT THE BUSINESS ACTIVITIES WERE FOUND TO BE SUBDUED IN THO SE YEARS THE POSITION IS THE SAME IN THE PRESENT YEAR ALSO THE ACTION OF THE LD. CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE IN REGARD TO OFFICE EXPENSES AND DEPRECIATION HAD B EEN UPHELD. 3. IN VIEW OF THE FACT THAT THE PRESENT APPEAL HAS BEEN FILED BY THE DEPARTMENT THE LD. SR. DR SHRI PIYUSH KOLHE WAS REQUIRED TO ADDRES S THE SPECIFIC GROUNDS OF THE DEPARTMENT IN THE LIGHT OF THE ARGUMENTS ADVANCED O N BEHALF OF THE ASSESSEE 3.1. THE LD. DR SUBMITTED THAT THE CONTENTION OF TH E LD. AR THAT THE DEPARTMENTAL APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE IS NOT CORRECT. IT WAS HIS SUBMISSION THAT NO DOUBT GROUND NO. 1 AND 2 PERTAIN TO THE OFFICE EXPE NSES AND DEPRECIATION WHICH AS PER ASSESSEES CLAIM HAD BEEN ALLOWED BY THE CIT(A). IT WAS ALSO NOT DISPUTED BY HIM THAT THE TRIBUNAL HAD AN OCCASION TO CONSIDER THESE ISSU E IN THE EARLIER YEAR AS SUCH THE SAID GROUNDS HAVE BEEN CONSIDERED. HOWEVER AS FAR AS GR OUND NO.3 IS CONCERNED IT WAS HIS SUBMISSION THAT THE LD. CIT(A) HAS ERRED IN TAKING THE SAME TO BE IDENTICAL TO THE EARLIER TWO GROUNDS AND ALLOWED DEDUCTION FOR BAD D EBT WRITTEN OFF OF RS.75 00 000/-. IT WAS HIS ARGUMENT THAT THE REASONING WHICH HAS BE EN TAKEN FOR GROUND NO.1 AND 2 CANNOT BE APPLIED TO THE SAID ISSUE. IT WAS HIS SUB MISSION THAT AS PER THE PAPER BOOK FILED BY THE ASSESSEE THE SAID AMOUNT IS NOT A TRAD ING DEBT BUT IN FACT IT IS A DEPOSIT WITH THE CESC AND SINCE IT DOES NOT CONSTITUTE A TRADING DEBT THE OCCASION TO CONSIDER THE SAME AS A BAD DEBT DOES NOT ARISE. RELIANCE WAS PLA CED ON THE ASSESSMENT ORDER. IN THE CONTEXT OF THE SAME IT WAS SUBMITTED THAT THE LD. C IT(A) HAS NOT GIVEN DUE 3 CONSIDERATION TO THIS FACTUAL DISTINCTION WHICH IS ARISING FROM THE RECORD OF THE CASE ITSELF AND HE HAS PROCEEDED GENERALLY. 4. THE LD. AR IN THE CONTEXT OF GROUND NO.1 & 2 AND RELYING UPON HIS SUBMISSIONS MADE EARLIER SUBMITTED THAT THE SAME IS COVERED IN FAVOUR OF THE ASSESSEE. IN THE CONTEXT OF GROUND NO.3 IT WAS HIS SUBMISSION THAT T HE ASSESSEE IS ALSO IN THE BUSINESS OF MONEY LENDING APART FROM TRADING AND INVESTMENT IN STOCK CONSULTANCY ETC WHICH FACT IS BORNE OUT FROM PARA 3.1. OF THE IMPUGNED ORDER. ACCORDINGLY THE DEPOSIT WITH THE CESC DEFINITELY CONSTITUTES A BAD DEBT WHICH AS PE R RECORD HAS BEEN WRITTEN OFF BY THE ASSESSEE. THE GROUND RAISED BEFORE THE LD. CIT(A)HA S BEEN RIGHTLY ALLOWED AND AS SUCH DESERVES TO BE UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE SAME IT IS SEEN T HAT IN THE EARLIER YEARS THE TRIBUNAL HAD AN OCCASION TO CONSIDER THE DEPARTMENTAL APPEAL IN TWO CONSEQUENT A.YRS. 2004-05 AND 2005-06. IN THE FACTS OF THOSE CASES IT IS BORN E OUT THAT THE AO HELD THAT THE ASSESSEES BUSINESS EXPENSES DID NOT CORRESPOND TO HIS BUSINESS INCOME CONSIDERING THE FACTS SET OUT IN THOSE YEARS. THE COORDINATE BE NCH CAME TO THE CONCLUSION THAT THE ASSESSEE HAD CARRIED OUT TRADING ACTIVITY IN SHARES AND GOVT. SECURITIES AND NO DOUBT THE BUSINESS ACTIVITIES WERE SUBDUED IN COMPARISON TO T HE EARLIER AND SUBSEQUENT YEARS AS SUCH RELYING UPON THE DECISION TAKEN IN TO CONSIDER ATION BY THE LD. CIT(A) NAMELY : (I) S.A.BUILDERS LTD. VS CIT (2007) 288 ITR 1 (SC) (II) WOODCRAFT PRODUCTS LTD. 217 ITR 862 (III) ITO VS MOKUL FINANCE (P) LTD (2007) 11 TTJ (D EL) 445 THE CO-ORDINATE BENCH UPHELD THE ORDER OF THE LD. C IT(A). IN THE YEAR UNDER CONSIDERATION THE SAME ORDER OF THE LD. CIT(A) HAS BEEN FOLLOWED BY THE LD. CIT(A)IN THE PRESENT PROCEEDINGS WHEREIN VIDE PARA 3.4 HE HO LDS THAT IT IS NOT A CASE OF THE AO THAT THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT G ENUINE. HE ALSO GIVES A FINDING THAT THE AO HAS FAILED TO POINT OUT EVEN A SINGLE INSTAN CE OF EXPENDITURE WHICH HE FOUND 4 WAS NOT GENUINE. ACCORDINGLY RELYING UPON THE DECIS ION TAKEN BY THE LD. CIT(A) IN THE EARLIER YEARS ON THE FACTS OF THE CASE THE LD. CIT( A) HELD THAT THE ASSESSEE HAS CARRIED ON BUSINESS ACTIVITY. IN THE COURSE OF THE HEARING BEFORE US QUA THE GROUNDS NO.1 & 2 NO DISTINGUISHING FACT CIRCUMSTANCE OR POSITION OF LAW WAS BROUGHT TO THE NOTICE OF THE BENCH. IN THE AFORE MENTIONED FACTS AND CIRCUMSTANC ES WE ARE OF THE VIEW THAT THE IMPUGNED ORDER DESERVES TO BE UPHELD. RESPECTFULLY RELYING UPON THE ORDER OF THE TRIBUNAL PASSED BY THE CO-ORDINATE BENCH TO WHICH O NE OF US IS A PARTY (LD. AM) GROUND 1 AND 2 OF THE DEPARTMENT ARE DISMISSED. 5.1. CONSIDERING THE ARGUMENTS ADVANCED PERTAINING TO GROUND NO.3 WHICH HAVE BEEN DISCUSSED IN THE EARLIER PART OF THIS ORDER W E ARE OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE ARGUMENTS A DVANCED BY THE LD. SR.DR HAVE MERIT IN AS MUCH AS IT IS SEEN THAT IT CANNOT BE SA ID THAT THE SAID ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL IN THE EARLIER ASSESSMENT YEA RS VIDE ITA NO.1100 AND 1101/KOL/2008. IN THE FACTS OF THE PRESENT CASE AS PER THE DOCUMENTS AVAILABLE ON RECORD THE AMOUNT UNDER QUESTION IS A DEPOSIT. THE SAID ISSUE NEVER HAD AN OCCASION TO BE CONSIDERED IN THE IMMEDIATELY TWO PRECEDING YEAR S. IT IS ALSO SEEN ON A PERUSAL OF THE IMPUGNED ORDER THAT WHILE ALLOWING THE CLAIM OF THE ASSESSEE QUA THE OFFICE EXPENSES AND DEPRECIATION THE LD. CIT(A ) HAS NOT T AKEN INTO CONSIDERATION THE SPECIFIC FACTS THAT OF THE CASE AND HAS PROCEEDED GENERALLY. THE MATERIAL DISTINCTION THAT RS.75 00 000/- WAS NOT A TRADING DEBT AND IN FACT W AS A DEPOSIT WITH THE CESC HAS NOT BEEN TAKEN NOTE OF BY HIM AS HAS BEEN POINTED OUT B Y THE LD. DR WHO WAS AT PAINS TO EMPHASISE THIS FACT. THE FACT THAT IT WAS A DEPOSIT HAS ALSO NOT BEEN DISPUTED BY THE LD. AR WHO HAS INSTEAD ARGUED THAT THE ASSESSEE WAS IN THE BUSINESS OF MONEY LENDING AND AS SUCH THE AMOUNT HE COULD NOT RECOVER SHOULD HAVE BEEN EVEN OTHERWISE ALLOWED. ACCORDINGLY IN THE LIGHT OF THE FACTS AND CIRCUMSTA NCES WHICH HAVE BEEN SET OUT ABOVE WE ARE OF THE VIEW THAT IT WOULD BE APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FILE OF THE AO WITH THE DIRECTION TO DECIDE THE SAME IN ACC ORDANCE WITH LAW AFTER GIVING THE 5 ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. A CCORDINGLY GROUND NO. 3 RAISED BY THE DEPARTMENT IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 12.02.2010. SD/- SD/- (G.D.AGRAWAL) (DIVA SINGH) VICE PRESIDENT JUDICIAL MEMB ER DATED : 12.02.2010. COPY OF THE ORDER IS FORWARDED TO :- 1) SHRI MANOJ KUMAR DHUPELIA 11 R.N.MUKHERJEE ROAD NILHAT HOUSE 6 TH FLOOR KOLKATA-700001. 2) D.C.I.T. CENTRAL CIRCLE-III KOLKATA 3) CIT (A)-XX KOLKATA (4) CIT - KOLKAT A. 5) D. R. I.T.A.T. KOLKATA. (TRUE COPY) BY ORDER ASSISTANT REGISTRAR (RG) I.T.A.T. KOLKATA.