The ACIT,Vapi Circle,, Vapi v. Jet Electronics,, Daman

ITA 2233/AHD/2010 | misc
Pronouncement Date: 23-08-2010 | Result: Dismissed

Appeal Details

RSA Number 223320514 RSA 2010
Assessee PAN AACFJ3681N
Bench Ahmedabad
Appeal Number ITA 2233/AHD/2010
Duration Of Justice 1 month(s) 21 day(s)
Appellant The ACIT,Vapi Circle,, Vapi
Respondent Jet Electronics,, Daman
Appeal Type Income Tax Appeal
Pronouncement Date 23-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 23-08-2010
Assessment Year misc
Appeal Filed On 02-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : SMC BENCH : AHMEDABA D (BEFORE HON'BLE SHRI T.K. SHARMA JUDICIAL MEMBER ) I.T.A. NO. 2233/AHD./2010 ASSESSMENT YEAR : 2006-2007 ASSISTANT COMMISSIONER OF INCOME TAX -VS.- M/S. JET ELECTRONICS DAMAN VAPI CIRCLE VAPI (PAN : AACFJ 3681 N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.M. MAHESH S R. D.R. RESPONDENT BY : SHRI D.K. PARIKH O R D E R THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 23.04.2010 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) VALSAD ALLOWI NG THE CLAIM OF DEDUCTION OF BAD DEBTS/ DISCOUNTS AMOUNTING TO RS.9 68 733/- FOR THE ASSESS MENT YEAR 2006-07. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING OF PLASTIC COVERS AND HOUSING USED FO R MANUFACTURING AUDIO CASSETTES AND JEWEL BOXES FOR C.D. FOR THE ASSESSMENT YEAR UNDER APPEAL IT FILED THE RETURN OF INCOME DECLARING LOSS OF RS.6 24 587/-. ON PERUSAL OF PROFIT & LOSS A/C. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED RS.9 68 733/- AS BAD DEBTS/ DI SCOUNT. THE ASSESSING OFFICER ASKED THE DETAILS WHICH WERE FURNISHED BY THE ASSESSEE. THES E DETAILS ARE AS UNDER :- OPENING BALANCE AS ON 01.04.2002 RS. 88 98 295/- SALES FROM 01.04.2002 TO 31.03.2006 RS. 21 21 969 /- RS.1 10 20 264/- AMOUNT RECEIVED FROM 01.04.2002 TO 31.03.2006 RS. 63 01 722/- RS. 41 18 542/- LESS : DISCOUNT/ BAD DEBTS DURING THE YEAR RS. 10 03 631/- NET RECEIVABLE AS ON 31.03.2006 RS. 37 14 911/- 2 ITA NO. 2233/AHD/2010 2.1. FROM THE AFORESAID DETAILS THE ASSESSING OFFI CER OBSERVED THAT THE ASSESSEE HAS REGULAR BUSINESS WITH M/S. SAGARIKA ACCOUSTRONICS P. LTD. F ROM YEAR AFTER YEAR. THE SALES TO THE SAID PARTY ARE BEING MADE AND PAYMENTS ARE ALSO BEING RE CEIVED BY THE ASSESSEE. THEREFORE THERE WAS NO LEGITIMATE BUSINESS EXIGENCY TO CLAIM AN AMOUNT OF RS.10 03 631/- AS EITHER DISCOUNT OR BAD DEBTS. THE ASSESSING OFFICER ALSO NOTED THAT EVEN A COPY OF MOU DATED 23.11.2005 FILED BY THE ASSESSEE BETWEEN THE ASSESSEE ITSELF AND SAGARIKA A CCOUSTRONICS DOES NOT HAVE ANY MENTION OF SUCH DISCOUNT OF RS.10 03 631/- AS CLAIMED BY THE A SSESSEE. THE ASSESSING OFFICER DISALLOWED THE ENTIRE CLAIM FOLLOWING THE JUDGMENT OF THE HON' BLE GUJARAT HIGH COURT IN THE CASE OF DHALL ENTERPRISES & ENGINEERS P. LTD. REPORTED IN 295 ITR 481 (GUJ.). 3. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER REFERRING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF BRITANNIA INDUSTRIES LTD. VS. - CIT [2005] ITR 596 (SC) DELETED THE DISALLOWANCE OF RS.9 68 733/- HOLDING THAT THE ASSE SSEE HAS SATISFIED THE CONDITIONS LAID DOWN IN SECTION 36(2) TO WRITE OFF THE BAD DEBTS. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE REVENUE IS IN APPEAL BEFOR E THE TRIBUNAL. 4. AT THE TIME OF HEARING ON BEHALF OF REVENUE SHRI K.M. MAHESH LD. SR. D.R. APPEARED AND RELYING ON THE REASONING GIVEN BY THE ASSESSING OFF ICER IN THE ASSESSMENT ORDER CONTENDED THAT THE ASSESSEE IS HAVING REGULAR BUSINESS WITH THE SA ID PARTY NAMELY M/S. SAGARIKA ACCOUSTRONICS P. LTD. IN THESE CIRCUMSTANCES THE ASSESSING OFFIC ER RIGHTLY DELETED THE CLAIM OF BAD DEBTS AMOUNTING TO RS.9 68 733/-. 5. ON THE OTHER HAND SHRI D.K. PARIKH LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). THE LD COUNSEL OF THE ASSESSEE ALSO RELIED ON THE LATEST J UDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF T.R.F. LTD. VS.- COMMISSIONER OF INCOME TA X [2010] 323 ITR 397 (SC). THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT IN THIS JU DGMENT THE HON'BLE SUPREME COURT HAS HELD THAT AFTER THE AMENDMENT OF SECTION 36(1)(VII) OF THE IN COME TAX ACT 1961 WITH EFFECT FROM APRIL 1 1989 IN ORDER TO OBTAIN A DEDUCTION IN RE LATION TO BAD DEBTS IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT IN FACT HAS B ECOME IRRECOVERABLE : IT IS ENOUGH IF THE BAD DEBT 3 ITA NO. 2233/AHD/2010 IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. ON THIS BASIS THE LD. COUNSEL OF THE ASSESSEE CONTENDED THAT THE VIEW TAKEN BY THE L EARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 6. HAVING HEARD BOTH THE SIDES I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS TRUE THAT THE ASSESSEE HAS REGULAR BUS INESS WITH M/S. SAGARIKA ACCOUSTRONICS P. LTD. FROM YEAR AFTER YEAR. THE SALES TO THE SAID PARTY A RE BEING MADE AND PAYMENTS ARE ALSO BEING RECEIVED BY THE ASSESSEE. HOWEVER IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS CLAIMED THE AMOUNT IN QUESTION AS DISCOUNT/ BAD DEBTS AND THIS AMOUNT HAS ACTUALLY WRITTEN OFF IN THE BOOKS OF ACCOUNTS. THEREFORE FOLLOWING THE JUDGMENT OF TH E HON'BLE SUPREME COURT IN THE CASE OF T.R.F. LTD. (SUPRA) THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS UPHELD. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 23.08.20 10 SD/- (T.K. SHARMA) JUD ICIAL MEMBER DATED : 23/ 08 / 2010 COPY OF THE ORDER IS FORWARDED TO : (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT(A.) CONCERNED (4) CIT CONCERNED (5) D.R . ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD LAHA/SR.P.S.