ACIT, CHENNAI v. Shri K.M.Kader Ibrahim, CHENNAI

ITA 2094/CHNY/2010 | 2007-2008
Pronouncement Date: 18-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 209421714 RSA 2010
Assessee PAN AAAPI2042N
Bench Chennai
Appeal Number ITA 2094/CHNY/2010
Duration Of Justice 11 month(s) 9 day(s)
Appellant ACIT, CHENNAI
Respondent Shri K.M.Kader Ibrahim, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 18-11-2011
Date Of Final Hearing 09-11-2011
Next Hearing Date 09-11-2011
Assessment Year 2007-2008
Appeal Filed On 09-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI [BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER] I.T.A.NO.2094/MDS/2010 ASSESSMENT YEAR : 2007-08 THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE XIII CHENNAI VS SHRI K.M.KADER IBRAHIM NEWNO.2 OLD NO.30 RAILWAY COLONY 2 ND STREET CHENNAI 600 029 [PAN - AAAPI2042N] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.C.JOSEPH SR.AR RESPONDENT BY : SHRI S.SRIDHAR ADVOCATE DATE OF HEARING : 09-11-2011 DATE OF PRONOUNCEMENT : 18-11-2011 O R D E R PER HARI OM MARATHA JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE FOR ASSESSMEN T YEAR 2007-08 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-XII C HENNAI DATED 16.09.2010. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT S CRUTINY ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF ` 4 28 30 962/- AS AGAINST THE ORIGINALLY RETURNED INCOME OF ` 2 66 59 722/- WHICH WAS ITA 2094/10 :- 2 -: LATER REVISED ON 30.11.2007 AT A TOTAL INCOME OF ` 3 65 00 412/- PERTAINING TO ASSESSMENT YEAR 2007-08. THE ASSESS ING OFFICER DISALLOWED (I) BUILDING MAINTENANCE CLAIMED AT ` 2 60 544/- (II) STAFF SETTLEMENT CLAIMED AT ` 14 00 000/- AND (III) BAD DEBTS CLAIMED AT ` 25 09 000/-. HE ALSO ASSESSED THE SHORT TERM CAPIT AL GAINS AT ` 14 90 144/- WITHOUT ALLOWING THE STATUTORY DEPRECIA TION. ALL THE ABOVE DISALLOWANCES/ADDITIONS WERE DISPUTED BY THE ASSESS EE BEFORE THE LD. CIT(A) WHO HAS GIVEN PART RELIEF IN HIS IMPUGNED O RDER. NOW THE REVENUE IS AGGRIEVED. IN EFFECT TWO ISSUES HAVE B EEN RAISED IN THIS APPEAL (I) RELATING TO DELETION OF ADDITION OF ` 4 74 000/- BEING SALARY OF EARLIER YEARS SETTLED IN THE YEAR UNDER APPEAL; AND (II) BEING THE DELETION OF DISALLOWANCE OF BAD DEBTS OF ` 25 LAKHS. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. THE FACTS APROPOS THIS ISSUE ARE THAT WHILE ADJUDGING THE STAFF SETTLEMENT CLAIM ED AT ` 14 LAKHS WHICH COMPRISED AN AMOUNT OF ` 4.74 LAKHS BEING THE ARREARS OF SALARY THE CONTENTION OF THE ASSESSEE IS THAT THE YEAR IN WHICH THE SALARY ARREARS WAS PAID IS THE YEAR IN WHICH IT HAS TO BE CLAIMED AS EXPENDITURE AS AGAINST WHICH THE LD. CIT(A) HAS GI VEN A DIRECTION TO THE ASSESSING OFFICER TO ALLOW THIS ARREAR OF SALA RY IN THE RESPECTIVE YEARS IN WHICH THESE WERE ACTUALLY PAID AND HAS FUR THER DIRECTED TO ITA 2094/10 :- 3 -: REVISE THE ASSESSMENT FOR ALL THE ASSESSMENT YEARS IN WHICH SUCH EXPENSES ARE TO BE ALLOWED. AGAINST THIS DIRECTION THE REVENUE IS AGGRIEVED. THE CASE AS PUT FORTH BY THE LD.DR IS T HAT THIS DIRECTION AMOUNTS TO REOPENING OF THE ASSESSMENT RELATING TO EARLIER YEARS AND SALARY EXPENDITURE ON DUE BASIS. THE CASE OF THE L D.AR IS THAT THIS IS NOT A BLANK DIRECTION AND IS BASED ON THE FACTS REL ATED TO THIS ISSUE. AFTER HEARING BOTH SIDES IN THE LIGHT OF THE OBTAIN ING FACTS AND EVIDENCE ON RECORD WE FEEL THAT THIS ISSUE NEEDS TO BE REST ORED TO THE FILE OF THE ASSESSING OFFICER SO THAT THE ASSESSEE CAN PUT FORT H HIS LEGITIMATE ARGUMENTS WHICH WERE NOT MADE DURING ASSESSMENT PRO CEEDINGS. THE DIRECTION GIVEN BY THE LD. CIT(A) IN THIS REGARD SE EMS TO BE FAR FETCHED AND NOT COMING THROUGH THE ASSESSMENT ORDER. BUT T O BE FAIR ON THIS ISSUE WE FIND IT JUSTIFIABLE THAT WE MUST SET ASID E THE IMPUGNED DIRECTION OF THE LD. CIT(A) AND INSTEAD GIVE A FREE HAND TO THE ASSESSING OFFICER TO DECIDE THIS ISSUE AFRESH SO TH AT JUSTICE CAN BE DONE TO BOTH THE PARTIES. GROUND NO.2 (2.1 AND 2. 2) STANDS ALLOWED FOR STATISTICAL PURPOSES. 4. THE NEXT ISSUE PERTAINS TO DISALLOWANCE OF BAD DEBT S AMOUNTING TO ` 25 LAKHS. THE FACTS APROPOS THIS ISSUE ARE THAT T HE ASSESSING OFFICER HAS DISALLOWED BAD DEBTS TO THE TUNE OF ` 25 LAKHS ALTHOUGH THE ASSESSEE HAS WRITTEN OFF THESE DEBTS IN THE BOOKS O F ACCOUNT AS PER THE ITA 2094/10 :- 4 -: LATEST AMENDMENT IN THE RELEVANT PROVISION. THE PR EMISE OF THE LD.DR THAT BAD DEBT CAN BE ALLOWED ONLY IN THE YEAR IN WH ICH THEY BECAME IRRECOVERABLE. BUT THE LATEST LAW ON THE SUBJECT I S THAT ONCE A BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE IT BECOMES ALLOWABLE ONE. THE WRITING OFF THE DEBT AS BAD DEBT IN THE BOOKS OF ACCOUNT HAS NOT BEEN DISPUTED BY THE REVEN UE THEREFORE THE LD. CIT(A) HAS PASSED A CORRECT ORDER IN THIS R EGARD. ACCORDINGLY GROUND NO.3(3.1 & 3.2) THUS STANDS DISMISSED. 5. IN THE RESULT APPEAL OF THE REVENUE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 18 TH NOVEMBER 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR