The Acit Circle 5 Baroda v. Shri Parasmal V Jain Baroda

In The Income Tax Appellate Tribunal Ahmedabad Bench D Before Shri Bhavnesh Saini Judicial Member And Shri A N Pahuja Accountant Member Date Of Hearing 18 01 2010 Drafted On 18 01 2010 Ita No 03 Ahd 2009 Assessment Year 2005 06 The Asst Cit Circle 5 Baroda Vs Shri Parasmal V Jain Prop Of Laxmi Metal Distributors Narsingh Estate Yamuna Mill Road Baroda Pan Gir No Abppj 8381 B Appellant Respondent Appellant By Shri C K Mishra Sr D R Respondent By None O R D E R Per Bhavnesh Saini Judicial Member This Appeal By The Revenue Is Directed Against The Order Of The Learned Cit Appeals V Baroda Dated 15 10 2008 Pas Sed For Assessment Year 2005 06 Challenging The Deletion Of Addition On Account Of Bad Debts In A Sum Of Rs 6 56 732 2 It Was Submitted Before The Learned Cit Appeals That Assessee Has Claimed Bad Debts In Respect Of Five Parties Name Ly Aditya Forge Ltd Industrial Profile Prestige Metal Industries Shre Eji Barrels And Solar Equipment Pvt Ltd It Was Explained That The Above Debtors Have Not Paid The Amount Since Financial Year 2002 03 And As Suc H These Debts Have Become Time Barred And There Are No Chances Of Reco Very It Was Also Ita No 03 Ahd 2009 Acit Vs Shri Parasmal V Jain Asst Year 2005 06 2 Explained That Seeking Remedy In The Civil Court Wo Uld Have Put The Assessee To Additional Cost Therefore Assessee Ha S Treated The Amount As Bad Debt And Written Off In The Books Of Account Copies Of The Accounts Of The Parties Were Also Furnished In Support Of Th E Same And Circular Of The Cbdt No 551 Dated 23 01 1990 Was Also Relied Up On In Which The Amended Provisions Of Section 36 1 Vii Of The I T Act 1961 Has Been Explained To Provide That The Claim For The Bad Deb T Will Be Allowed In The Year In Which Such A Bad Debt Has Been Written Off As Irrecoverable In The Amount Of The Assessee And There Is No Necessity To Prove That The Debt Had Become Bad The Learned Cit Appeals Accepted The Contention Of The Assessee Because The Claim Of The Assessee Was As P Er The Amended Provisions Of Section 36 1 Vii Of The I T Act 1 961 And Addition Was Accordingly Deleted 3 The Learned Departmental Representative Relied U Pon The Order Of The Assessing Officer 4 None Appeared On Behalf Of The Assessee Despite Notifying The Date Of Hearing 5 Considering The Above And The Ground Of Appeal We Find That Tax Effect Is Below Rs 2 Lacs In This Departmental Appe Al As Per Departmental Instructions Departmental Appeal Coul D Be Filed Before The Tribunal If The Tax Effect Exceeds Rs 2 Lacs Th Erefore Departmental Appeal Would Not Be Maintainable And Even No Questi On Of Law Arises In The Ita No 03 Ahd 2009 Acit Vs Shri Parasmal V Jain Asst Year 2005 06 3 Above Departmental Appeal We May Also Add Here T Hat The Claim Of The Assessee Was As Per Section 36 1 Vii Of The I T Act 1961 Because The Assessee Has Written Off The Bad Debts As Irrecover Able In The Accounts For The Previous Year As Is Noted By The Learned Cit Ap Peals 6 Considering The Above We Do Not Find Any Merit In The Departmental Appeal The Same Is Accordingly Dismis Sed 7 In The Result The Appeal Of The Revenue Is Dism Issed Order Pronounced In The Court On 18 Th January 2010 Sd Sd A N Pahuja Bhavnesh Saini Accountant Member Judicial Member Ahmedabad Dated 18 01 2010 T C Nair Copy Of The Order Forwarded To 1 The Appellant 2 Th E Respondent 3 The Cit Concerned 4 The Ld Cit Appeals V Baroda 5 The Dr Ahmedabad Bench 6 The Guard File By Order True Copy Dy Asstt Registrar Itat Ahmedabad