PRANA PUBLIC RELATIONS P. LTD, MUMBAI v. DCIT (OSD) CIR 2(2), MUMBAI

ITA 2842/MUM/2010 | 2007-2008
Pronouncement Date: 28-07-2011 | Result: Allowed

Appeal Details

RSA Number 284219914 RSA 2010
Assessee PAN AAACI6163M
Bench Mumbai
Appeal Number ITA 2842/MUM/2010
Duration Of Justice 1 year(s) 3 month(s) 19 day(s)
Appellant PRANA PUBLIC RELATIONS P. LTD, MUMBAI
Respondent DCIT (OSD) CIR 2(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Date Of Final Hearing 28-07-2011
Next Hearing Date 28-07-2011
Assessment Year 2007-2008
Appeal Filed On 09-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C : MUMBAI BEFORE SHRI D.MANMOHAN VICE PRESIDENT AND SHRI PRAMOD KUMAR ACCOUNTANT MEMBER ITA. NO. 2842/MUM/2010 ASSESSMENT YEAR 2007-2008 PRANA PUBLIC REALTORS P. LTD. MUMBAI 400 051 PAN AAACI6163M VS. DCIT (OSD) CIRCLE 2 (2) MUMBAI 400 020 (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI ARVIND DALAL FOR RESPONDENT : SHRI G.P. TRIVEDI SR. D.R. DATE OF HEARING : 28-7-2011 DATE OF PRONOUNCEMENT : 28-7-2011 ORDER PER D. MANMOHAN V.P. 1. THIS APPEAL IS FILED AT THE INSTANCE OF THE ASS ESSEE- COMPANY AND IT PERTAINS TO THE ASSESSMENT YEAR 2007 -2008. ASSESSEE CLAIMED DEDUCTION OF RS.1 39 353/- AS BAD DEBT UNDE R SECTION 36(1)(VII) OF THE ACT. IT MAY BE NOTICED THAT THE A SSESSEE HAD WRITTEN-OFF A SUM OF RS.4 18 408/-. THOUGH THE ASSESSEE WAS REQ UESTED TO FILE PARTY-WISE BREAK-UP ACCORDING TO THE ASSESSING OFF ICER NO DETAILS WERE SUBMITTED. HE FURTHER OBSERVED THAT IN RESPECT OF THE DEBT IN THE NAME OF NIHILENT TECHNOLOGIES PVT. LTD. (WHICH WAS A DEBTOR OF RS.1 39 353/-) THOUGH AMOUNT WAS WRITTEN-OFF AS ON 31-3-2007 THE ASSESSEE CONTINUED TO HAVE BUSINESS RELATIONSHIP WI TH THE SAID PARTY AND THUS THERE IS NO BASIS FOR WRITING OFF THE IMP UGNED AMOUNT AS BAD DEBT. 2. ON AN APPEAL FILED BY THE ASSESSEE LEARNED CI T(A) OBSERVED THAT ON ONE HAND DEDUCTION WAS CLAIMED UN DER SECTION 36(1) (VII) ACT BUT ON THE OTHER HAND ASSESSEE CO NTINUES TO MAINTAIN RELATIONSHIP WITH THE PARTY. HE FURTHER OBSERVED TH AT WHEN ASSESSEE ADMITTED THAT IT IS NOT A BAD DEBT BUT THE SAID AMO UNT WAS IN THE FORM OF A REBATE IT IS THE DUTY OF ASSESSEE TO EXPLAIN O F REBATE AND IN THE ABSENCE OF ANY MATERIAL NO DEDUCTION CAN BE CLAIMED AS BAD DEBT. ITA.NO.2842/M/2010 PRANA PUBLIC RELATIONS PVT. LTD. 2 3. FURTHER AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US. LEARNED COUNSEL STRONGLY SUBMITTED THAT THE ISSUE STANDS COVERED BY THE DECISION OF THE APEX COURT IN THE CASE OF TRF L IMITED 323 ITR 397 AND THE ASSESSEE HAVING WRITTEN-OFF THE SAME UNDER SECTION 36(1)(VII) OF THE ACT AS BAD DEBT ASSESSING OFFICER IS NOT JU STIFIED IN DISALLOWING THE CLAIM. IT IS NOT THE CASE OF THE REVENUE THAT T HE ASSESSEE HAS RECEIVED THIS SUM IN SUBSEQUENT YEAR OR THE PARTY I NTENDED TO PAY THE SAID AMOUNT AT A LATER DATE. IT IS ALSO NOT IN DISP UTE THAT IT WAS ORIGINALLY DECLARED AS INCOME. WHETHER IT WAS IN TH E FORM OF A REBATE OR A BAD DEBT THE FACT REMAINS THAT ASSESSEE HAD AN UNDERSTANDING WITH THE PARTY WHEREBY THE AMOUNT HAD TO BE WRITTEN -OFF. 4. ON THE OTHER HAND LEARNED DR RELIED UPON THE O RDERS OF THE ASSESSING OFFICER AS WELL AS CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. IT IS NOT DISPUTED BY THE TAX A UTHORITIES THAT IMPUGNED SUM WAS DECLARED BY THE ASSESSEE AS INCOME AT THE TIME OF ACCRUAL. IT IS NOT THE CASE OF THE REVENUE THAT THE DISALLOWANCE WAS CLAIMED WITH A MALAFIDE INTENTION. NOWHERE IT IS ST ATED THAT ASSESSEE HAS A CHANCE OF RECOVERING THAT AMOUNT AT A LATER P OINT OF TIME. IN THE LIGHT OF SECTION 36(1)(VII) OF THE ACT AND ALSO HAV ING REGARD TO THE DECISION OF THE APEX COURT (SUPRA) WE ARE OF THE V IEW THAT A DEDUCTION CLAIMED UNDER SECTION 36 (1) (VII) OF THE ACT CANNO T BE DISALLOWED UNLESS IT IS SHOWN THAT OTHER CONDITIONS PRESCRIBED UNDER THAT SECTION ARE NOT COMPLIED. HAVING REGARD TO THE CIRCUMSTANCE S OF THE CASE WE DIRECT THE ASSESSING OFFICER TO GRANT DEDUCTION OF RS.1 39 353/-. 6. IN THE RESULT AS PRONOUNCED IN THE OPEN COURT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. SD/- SD/- (PRAMOD KUMAR) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI DATE 28 TH JULY 2011 VBP/- ITA.NO.2842/M/2010 PRANA PUBLIC RELATIONS PVT. LTD. 3 COPY TO 1. PRANA PUBLIC REALTORS P. LTD. 2 ND FLOOR MANEK MAHAL 90-VEER NARIMAN ROAD CHURCHGATE MUMBAI 400 020 PAN AAACI6163M 2. DCIT (OSD) CIRCLE 2 (2) AAYAKAR BHAVAN MUMBAI 400 020 3. CIT(A)-5 MUMBAI. 4. CIT-2 MUMBAI 5. DR C BENCH 6. GUARD FILE TRUE COPY BY ORDER ASST. REGISTRAR ITAT MUMBAI BENCHES MUMBAI.