Navjivan Roller Flour & Pulse Mills Pvt.Ltd.,, Dahod v. The ACIT., Panchmahal Circle,, Godhra

ITA 2108/AHD/2006 | 2002-2003
Pronouncement Date: 05-03-2010 | Result: Allowed

Appeal Details

RSA Number 210820514 RSA 2006
Bench Ahmedabad
Appeal Number ITA 2108/AHD/2006
Duration Of Justice 3 year(s) 5 month(s)
Appellant Navjivan Roller Flour & Pulse Mills Pvt.Ltd.,, Dahod
Respondent The ACIT., Panchmahal Circle,, Godhra
Appeal Type Income Tax Appeal
Pronouncement Date 05-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 05-03-2010
Date Of Final Hearing 02-03-2010
Next Hearing Date 02-03-2010
Assessment Year 2002-2003
Appeal Filed On 05-10-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND BHAVNESH SAINI JUDICIAL MEMBER) ITA.NO.2108/AHD/2006 ASSTT.YEAR : 2002-2003 NAVJIVAN ROLLER FLOUR & PULSE MILLS PVT. LTD. AT KUMBHARWADA OPP: MARKET YARD DAHOD 389 151. VS. ACIT PANCHMAHAL CIRCLE GODHRA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KARTIK CHOKSHI REVENUE BY : SHRI C.K. MISHRA O R D E R PER G.D. AGARWAL VICE-PRESIDENT: THIS IS ASSESSEES APPEAL AGAINST ORDER OF THE CIT(A)-VI BARODA DATED 25-08- 2006. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND IN THE MEMO OF APPEAL. 1. THE LD.CIT(A) ERRED IN UPHOLDING DISALLOWANCE MA DE IN ASSESSMENT MADE UNDER SECTION 147 OF DEDUCTION IN R ESPECT OF BAD DEBTS WRITTEN OFF TO THE EXTENT OF RS.10 63 538/- HOLDING THE CLAIMED TO BE NON- GENUINE. 2. AT THE TIME OF HEARING BEFORE US IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF T.R.F. LIMITE D VS. CIT IN CIVIL APPEAL NO.5293 OF 2003 DATED 9-2-2010. HE HAS STATED THAT THE ASSESSEE HAS ACTUALLY WRITTEN OFF THE AMOUNT IN THE ACCOUNTS. THE AO HAS ALSO NOT DISPUTED THE FACT OF WRITE OFF OF THE AMOUNT IN THE BOOKS OF ACCOUNTS . HE DISALLOWED THE BAD DEBTS ON THE GROUND THAT THE ASSESSEE COULD NOT PRO VE THAT THE DEBT HAD REALLY BECOME BAD. THE HONBLE APEX COURT IN THE ABOVE ME NTIONED CASE HAS HELD THAT IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABL ISH THAT THE DEBT IN FACT HAS ITA.NO.2108/AHD/2006 -2- BECOME BAD. HE THEREFORE SUBMITTED THAT THE ABOVE DECISION OF THE HONBLE APEX COURT WOULD BE SQUARELY APPLICABLE TO THE FACT S OF THE CASE. THE LEARNED DR ON THE OTHER HAND HAS RELIED UPON THE ORDER OF T HE AUTHORITIES BELOW AND STATED THAT AS PER THE PROVISIONS OF SECTION 36(1)( VII) OF THE ACT THE ASSESSEE CAN CLAIM DEDUCTION ONLY FOR THE BAD DEBTS AND NOT ANY OTHER DEBTS. THEREFORE THE ASSESSEE HAS TO ESTABLISH THAT THE AMOUNT WRITT EN OFF IN THE BOOKS OF ACCOUNTS WAS THE BAD DEBT AND NOT ANY OTHER DEBT. 3. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE ASSESSE E HAS CLAIMED THE DEDUCTION FOR AN AMOUNT RS.22 96 848/- AS BAD DEBT UNDER SECT ION 36(1)(VII) OF THE ACT. THE AO HAS EXAMINED THE ASSESSEES CLAIM IN DETAIL AND WAS OF THE OPINION THAT THE DEBT AMOUNTING TO RS.11 29 803/- HAS NOT BEEN E STABLISHED TO HAVE BECOME BAD. HE THEREFORE DISALLOWED THE SAME WHICH IS UPH ELD BY THE CIT(A) HENCE THIS APPEAL BY THE ASSESSEE. 4. WE FIND THAT THIS ISSUE IS NOW ADJUDICATED BY TH E HONBLE APEX COURT IN THE CASE OF T.R.F. LIMITED (SUPRA) WHEREIN THEIR LO RDSHIPS HELD AS UNDER: THIS POSITION IN LAW IS WELL-SETTLED. AFTER 1 ST APRIL 1989 IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DE BT IN FACT HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRI TTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. FROM THE ABOVE IT IS EVIDENT THAT THE HONBLE APEX COURT HAS HELD THAT AFTER 1 ST APRIL 1989 IT IS NOT NECESSARY FOR THE ASSESSEE T O ESTABLISH THAT THE DEBT HAS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS WRITTEN OFF THE DEBT IN ITS BOOKS OF A CCOUNTS. THEREFORE IN OUR OPINION THE DISALLOWANCE OF CLAIM OF BAD DEBTS ON THE GROUND THAT THE ASSESSEE COULD NOT ESTABLISH WHETHER THE DEBT HAS BECOME BAD OR NOT IS NOT TENABLE. IN VIEW OF THE ABOVE WE RESPECTFULLY FOLLOWING THE AB OVE DECISION OF THE HONBLE ITA.NO.2108/AHD/2006 -3- APEX COURT IN THE CASE OF T.R.F. LIMITED DIRECT THE AO TO ALLOW THE ASSESSEES CLAIM OF BAD DEBT. 5 . IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 5 TH MARCH 2010. SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 05-03-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR ITAT AHMEDABAD