M/s. Achuthan Pillai &Co.,, Cochin v. ACIT, Mattancherry

ITA 374/COCH/2012 | 2006-2007
Pronouncement Date: 11-10-2013

Appeal Details

RSA Number 37421914 RSA 2012
Assessee PAN AADFA7301D
Bench Cochin
Appeal Number ITA 374/COCH/2012
Duration Of Justice 9 month(s) 25 day(s)
Appellant M/s. Achuthan Pillai &Co.,, Cochin
Respondent ACIT, Mattancherry
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 11-10-2013
Date Of Final Hearing 24-07-2013
Next Hearing Date 24-07-2013
Assessment Year 2006-2007
Appeal Filed On 17-12-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND B.R.BASKAR AN AM I.T.A. NOS. 373 & 374/COCH/2012 ASSESSMENT YEARS : 2005-06 & 2006-07 M/S. ACHUTHAN PILLAI & CO. INDIRA GANDHI ROAD W/ISLAND KOCHI-3 [PAN:AADFA 7301D] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-3(1) MATTANCHERRY. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI P.K. SASIDHARAN CA REVENUE BY SMT. S. VIJAYAPRABHA JR. DR & SHRI M. ANIL KUMAR CIT(DR) DATE OF HEARING 24/07/2013 DATE OF PRONOUNCEMENT 11/10/2013 O R D E R PER B.R.BASKARAN ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THESE TWO APPEALS CHALLENGI NG THE COMMON ORDER DATED 01-11-2012 PASSED BY LD CIT(A)-II KOCHI AND THEY R ELATE TO THE ASSESSMENT YEARS 2005-06 AND 2006-07. BOTH THE APPEALS WERE HEARD T OGETHER AND HENCE THEY ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. 2. THE ASSESSEE INTER ALIA IS ASSAILING THE DECIS ION OF LD CIT(A) IN UPHOLDING THE REOPENING OF ASSESSMENT OF THE TWO YEARS UNDER CONS IDERATION. WE SHALL FIRST DEAL WITH THIS LEGAL ISSUE URGED BEFORE US. THE ASSESSEE IS A CUSTOMS HOUSE CLEARING AND FORWARDING AGENT. THE RETURNS OF INCOME FILED FOR BOTH THE YEARS UNDER CONSIDERATION WERE PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY THE AO NOTICED THAT:- (A) THE ASSESSEE HAS DECLARED STORAGE CHARGES AS INCOME FROM HOUSE PROPERTY AND ACCORDINGLY CLAIMED STATUTORY DEDUCTION OF 30% THEREON. I.T.A. NOS. 373&374/COCH/2012 2 (B) THE ASSESSEE HAS CLAIMED PLOT RENT PAID TO CO CHIN PORT TRUST AS DEDUCTION WHILE COMPUTING THE INCOME FROM HOUSE PROPERTY. (C) THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE FOR TRANSPORT AND DELIVERY CHARGES WHICH ATTRACT DISAL LOWANCE U/S 40(A)(IA) OF THE ACT. (D) THE ASSESSEE HAS WRITTEN OFF BALANCES FROM SUN DRY CREDITORS ACCOUNT BUT DID NOT DECLARE IT AS INCOME U/S 41(1) OF THE ACT. AO NOTICED THAT ALL THE ABOVE SAID IRREGULARITIES IF CORRECTED WOULD RESULT IN ENHANCEMENT OF INCOME. HENCE THE AO FORMED THE BEL IEF THAT THE INCOME HAS ESCAPED ASSESSMENT AND ACCORDINGLY REOPENED THE ASSESSMENTS BY ISSUING NOTICES DATED 10-9- 2008 U/S 148 OF THE ACT. IN RESPONSE TO THE SAID N OTICES THE ASSESSEE FILED RETURNS OF INCOME ALONG WITH COVERING LETTERS WHEREIN THE ASS ESSEE REQUESTED THE AO TO INTIMATE THE REASON FOR REOPENING OF ASSESSMENT. 2.1 THE AO VIDE HIS LETTER DATED 5-8-2009 INT IMATED THE ASSESSEE ABOUT THE REASONS FOR RE-OPENING OF ASSESSMENT MENTIONING THE IRREGUL ARITIES NARRATED ABOVE. THE SAID LETTER READS AS UNDER:- SUB.: INCOME TAX ASST FOR ASST YEARS 2003-04 05 -06 TO 2007-08 REG. REF.: YOUR LETTER DATED 21-7-2009. PLEASE REFER TO THE ABOVE. ON VERIFICATION OF THE RETURNS FILED IN COMPUTING THE HOUSE PROPERTY INCOME YOU HAVE MADE SOME DEDUCTION WHICH IS NOT ALLOWABLE UND ER THE HEAD HOUSE PROPERTY. LIKEWISE CERTAIN IRREGULARITIES IN ARRIV ING THE TOTAL INCOME UNDER THE HEAD BUSINESS INCOME NON-DEDUCTION OF TDS ON CERTA IN PAYMENTS ARE FOUND. THEREFORE THE ASSESSING OFFICER HAS EVERY REASON T O BELIEVE THAT INCOME CHARGEABLE TO TAX TO CERTAIN EXTENT HAS ESCAPED ASS ESSMENT. IN ORDER TO REGULARISE THE SAME THE ASSESSMENTS HAVE BEEN RE-O PENED. IT APPEARS THAT THE ASSESSEE DID NOT FILE ANY OBJEC TION TO THE LETTER SENT BY THE AO AND ALSO PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. 2.2 BEFORE LD CIT(A) THE ASSESSEE RAISED OBJEC TION TO THE RE-OPENING OF ASSESSMENT ON THE GROUND THAT THE REOPENING IS BARRED BY LIMIT ATION AND ALSO WITHOUT SUFFICIENT I.T.A. NOS. 373&374/COCH/2012 3 REASONS AND FURTHER THE AO HAS FAILED TO COMMUNICAT E THE REASONS AS WELL AS THE PARTICULARS OF INCOME ALLEGED TO HAVE ESCAPED ASSES SMENT. IT WAS FURTHER CONTENDED THAT THE LETTER DATED 5-8-2009 ISSUED BY THE AO COM MUNICATING THE REASONS IS VERY VAGUE AND DOES NOT SATISFACTORILY COMPLY WITH THE R EQUIREMENTS OF A VALID REOPENING. IT WAS ALSO CONTENDED THAT THE AO HAS REOPENED THE ASS ESSMENTS ON THE BASIS OF AUDIT OBJECTIONS WHICH CANNOT FORM BASIS FOR REOPENING. 2.3 THE LD CIT(A) NOTICED THAT THE ORIGINAL RET URNS FILED BY THE ASSESSEE WERE ACCEPTED U/S 143(1) OF THE ACT. THE LD CIT(A) ALSO NOTICED THAT THE CONTENTION RAISED BY THE ASSESSEE THAT THE REOPENING WAS WITHOUT SUFF ICIENT REASONS IS ALSO NOT CORRECT SINCE THE REASSESSMENT HAS BEEN COMPLETED BY MAKING VARIOUS TYPES OF ADDITIONS. THE LD CIT(A) ALSO NOTICED THAT THE AO HAS COMMUNICATED THE REASONS BY HIS LETTER DATED 5.8.2009. ACCORDINGLY HE REJECTED THE CONTENTIONS RAISED BY THE ASSESSEE ON THE ABOVE SAID POINTS. THE LD CIT(A) BY DRAWING SUPPORT FROM THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF NEW LIGHT TRADING CO. VS. CIT (256 ITR 391) AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. PVS BE EDIS PVT LTD (237 ITR 13) HELD THAT THE AUDIT OBJECTION CAN FORM BASIS FOR RE-OPEN ING IF THE AO APPLIES HIS OWN MIND TO SUCH OBJECTION AND COMES TO HIS OWN CONCLUSIONS. A CCORDINGLY THE LD CIT(A) HELD THAT THE REOPENING OF IMPUGNED ASSESSMENTS IS VALID. 2.4 BEFORE US THE ASSESSEE IS CONTESTING THE DE CISION OF LD CIT(A) ON THE LEGAL ISSUE CITED ABOVE. THE LD A.R SUBMITTED THAT THE AO HAS NOT PROPERLY COMMUNICATED THE REASONS FOR REOPENING THE ASSESSMENTS AND HENCE THE REASSESSMENT PROCEEDINGS SHOULD BE HELD TO BE INVALID. ON THE OTHER HAND THE LD D .R SUBMITTED THAT THE LD CIT(A) HAS PROPERLY ADDRESSED ALL THE CONTENTIONS OF THE ASSES SEE AND ACCORDINGLY CONTENDED THAT THE ORDER OF LD CIT(A) ON THIS ISSUE SHOULD BE UPHE LD. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND CAR EFULLY PERUSED THE RECORD. ADMITTEDLY THE RETURNS FILED FOR BOTH THE YEARS UN DER CONSIDERATION HAVE BEEN PROCESSED U/S 143(1) OF THE ACT. FURTHER THE REASS ESSMENT NOTICES HAVE BEEN ISSUED WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YE AR. WITH REGARD TO THE CONTENTIONS I.T.A. NOS. 373&374/COCH/2012 4 OF THE ASSESSEE THAT THE INFORMATION HAS BEEN RECEI VED FROM AUDIT PARTY WE AGREE WITH THE DECISION OF LD CIT(A) THAT THE SAID INFORMATION CAN BE THE BASIS FOR REOPENING OF ASSESSMENT PROVIDED THAT THE AO HAS APPLIED HIS MI ND ON THE ISSUES AND FORMED THE BELIEF ABOUT ESCAPEMENT OF INCOME. AS POINTED OUT BY LD CIT(A) BOTH THE ASSESSMENT ORDERS SUFFICIENTLY DEPICT THE APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER. BESIDES THE ABOVE THE MAIN CONTENTION OF THE ASSES SEE IS THAT THE LETTER DATED 5.8.2009 SENT BY THE AO CANNOT BE CONSIDERED AS PROPER COMMU NICATION OF REASONS. WE ARE UNABLE TO AGREE WITH THE SAID CONTENTIONS. IT IS A WELL SETTLED PROPOSITION OF LAW THAT THE AO NEED NOT ACCURATELY PINPOINT THE QUANTUM OF ESCAPEMENT OF INCOME. FROM THE READING OF THE LETTER DATED 5.8.2009 SENT BY THE AO WHICH IS EXTRACTED ABOVE WE NOTICE THAT THE AO HAS SUFFICIENTLY EXPLAINED THE G ROUNDS ON THE BASIS OF WHICH HE HAS ENTERTAINED THE BELIEF ABOUT THE ESCAPEMENT OF INCO ME. HENCE WE ARE OF THE VIEW THAT THE SAID COMMUNICATION CANNOT BE FOUND FAULT WITH. 2.6 THE PROCEDURE TO BE FOLLOWED BY AN ASSESSEE WHEN HE CHALLENGES THE REOPENING OF ASSESSMENT HAS BEEN EXPLAINED BY THE HONBLE SUP REME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD VS. ITO AND OTHERS (259 ITR 19) AS UNDER:- WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH TH E ORDER UNDER CHALLENGE. HOWEVER WE CLARIFY THAT WHEN A NOTICE U/S. 148 OF THE INCOME-TAX ACT IS ISSUED THE PROPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE A RETURN AND IF HE SO DESIRES TO SEEK REASONS FOR ISSUING NOTICES. THE ASSESSIN G OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF R EASONS THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE A SSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS THE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTIONS IF FILED BY PASSING A SPEAKING ORDER BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE ABOVE SAID F IVE ASSESSMENT YEARS. IN THE CASE BEFORE US THE ASSESSEE HAS SOUGHT THE REASONS FOR ISSUING THE NOTICES AND THE AO HAS SUPPLIED THE REASONS. THEREAFTER THE AS SESSEE DID NOT OBJECT TO THE REOPENING NOR DID IT POINTED OUT THE ALLEGED INSUFF ICIENCY OF REASONS. INSTEAD WE NOTICE THAT THE ASSESSEE HAS PARTICIPATED IN THE ASSESSMEN T PROCEEDINGS WITHOUT RAISING ANY OBJECTION. SINCE THE ASSESSEE DID NOT OBJECT TO TH E SAID COMMUNICATION THERE WAS NO OCCASION FOR THE AO TO ADDRESS THE CONTENTIONS URGE D BEFORE THE LD CIT(A) AS WELL AS I.T.A. NOS. 373&374/COCH/2012 5 BEFORE US. HENCE WE DO NOT FIND ANY MERIT IN THE CONTENTIONS RAISED BEFORE US ALSO AND ACCORDINGLY UPHOLD THE ORDER OF LD CIT(A) ON THIS I SSUE. 3. NOW WE SHALL ADDRESS THE GROUNDS URGED ON ME RITS. IN BOTH THE YEARS THE ASSESSEE HAD CLAIMED DEDUCTION OF PLOT RENT (GROU ND RENT) PAID TO COCHIN PORT TRUST AGAINST INCOME COMPUTED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE AO DISALLOWED THE SAID CLAIM ON THE GROUND THAT SUCH A DEDUCTION IS NOT PROVIDED U/S 24 OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE SAID DIS ALLOWANCE MADE BY THE AO. ACCORDING TO THE ASSESSEE THE BUILDING FROM WHICH THE RENT WAS DERIVED IS SITUATED ON THE LAND OWNED BY COCHIN PORT TRUST. ACCORDING TO LD A.R THE RENT COLLECTED FOR THE BUILDING WAS A COMPOSITE RENT CONSISTING OF RENT FO R BUILDING AND RENT FOR LAND. ACCORDINGLY IT WAS SUBMITTED THAT THE RENTAL INCOM E SHOULD BE SEGREGATED INTO BUILDING RENT AND PLOT RENT. ACCORDINGLY IT WAS SUBMITTED T HAT THE BUILDING RENT ALONE WAS OFFERED AS INCOME UNDER THE INCOME FROM HOUSE PROPE RTY BY DEDUCTING THE PLOT RENT FROM THE TOTAL RENTAL INCOME. 3.1 WE HAVE ALSO HEARD LD D.R IN THIS REGARD. DURING THE COURSE OF HEARING A SPECIFIC QUERY WAS PUT TO LD A.R AS TO WHETHER THE COCHIN PORT TRUST WAS ALSO A PARTY TO THE RENTAL AGREEMENT AND IF SO WHETHER THE RENTAL A GREEMENT PROVIDES FOR BIFURCATION OF RENTAL INCOME INTO BUILDING RENT AND PLOT RENT. T HE LD A.R FAIRLY CONCEDED THAT THE COCHIN PORT TRUST WAS NOT A PARTY TO THE RENTAL AGR EEMENT AND THE SAID AGREEMENT DOES NOT PROVIDE FOR BIFURCATION OF RENT. HE SUBMITTED THAT THE ASSESSEE IS PAYING SEPARATELY THE PLOT RENT TO COCHIN PORT TRUST. WHEN IT WAS A SKED WHETHER THE ASSESSEE WOULD BE LIABLE TO PAY THE PLOT RENT EVEN IF IT DID NOT REC EIVE THE RENTAL INCOME FROM THE BUILDING THE LD A.R FAIRLY SAID THAT THE ASSESSEE WOULD BE L IABLE TO PAY THE PLOT RENT IN SUCH KIND OF SITUATION ALSO. THESE DISCUSSIONS MADE BY THE B ENCH WITH LD A.R CLEARLY POINT OUT THE FACT THAT THE RENTAL INCOME RECEIVED BY THE ASS ESSEE IS NOT LINKED WITH THE PAYMENT OF PLOT RENT. HENCE THERE IS NO MERIT IN THE CONTE NTIONS OF THE ASSESSEE THAT THE RENTAL INCOME RECEIVED BY HIM IS A COMPOSITE RENT. I.T.A. NOS. 373&374/COCH/2012 6 3.2 THE PROVISIONS OF INCOME TAX PROVIDE FOR ME THOD OF COMPUTATION OF INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. SECTION 24 OF THE ACT PROVIDES FOR THE SPECIFIC DEDUCTIONS TO BE ALLOWED FROM THE ANNUAL R ENTAL VALUE DETERMINED IN THE MANNER PRESCRIBED IN THE ACT. SEC. 24 OF THE ACT D OES NOT PROVIDE FOR DEDUCTION OF GROUND RENT (PLOT RENT) WHILE COMPUTING THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HENCE WE DO NOT FIND ANY INFIRMITY IN T HE DECISION OF LD CIT(A) ON THIS ISSUE. 4. THE NEXT ISSUE RELATES TO THE DISALLOWANCE M ADE U/S 40(A)(IA) OF THE ACT. THE AO NOTICED THAT THE ASSESSEE HAS PAID CHARGES FOR TRAN SPORTATION DELIVERY AND TRAILER HIRE CHARGES IN BOTH THE YEARS WITHOUT DEDUCTION OF TAX AT SOURCE. IN THE YEAR RELEVANT TO THE ASSESSMENT YEAR 2005-06 THE ASSESSEE HAD PAID A SUM OF RS.25 51 556/- AND IN THE SUCCEEDING YEAR IT HAD PAID A SUM OF RS.29 37 253/-. HENCE THE AO DISALLOWED THE ENTIRE AMOUNT OF PAYMENTS IN THE RESPECTIVE ASSESSM ENT YEARS. DURING THE COURSE OF APPELLATE PROCEEDINGS THE LD CIT(A) CALLED FOR A R EMAND REPORT FROM THE AO. IN THE SAID REPORT THE AO RECOMMENDED FOR DISALLOWANCE OF ONLY RS.2 52 779/- AND RS.3 47 482/- RESPECTIVELY FOR ASSESSMENT YEARS 200 5-06 AND 2006-07. ACCORDINGLY THE LD CIT(A) SUSTAINED THE ADDITION TO THE EXTENT RECO MMENDED IN THE REMAND REPORT AND GRANTED RELIEF IN RESPECT OF BALANCE AMOUNTS. STIL L AGGRIEVED THE ASSESSEE IS CONTESTING THE ADDITIONS SUSTAINED BY THE LD CIT(A). 4.1 THE LD A.R SUBMITTED THAT THE ENTIRE AMOUNT OF TRANSPORT CHARGES HAVE BEEN PAID DURING THE COURSE OF YEAR AND NOTHING REMAIN P AYABLE AS AT THE YEAR END. ACCORDINGLY HE SUBMITTED THAT THE PROVISIONS OF SEC . 40(A)(IA) OF THE ACT SHALL NOT APPLY TO IT. APPARENTLY THE ASSESSEE IS PLACING RELIANC E ON THE DECISION OF VISAKHAPATNAM SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING (138 ITD ). HOWEVER THE DECISION RENDERED IN THE ABOVE SAID CASE HAS BEEN HELD TO BE NOT A GOOD LAW IN THE FOLLOWING CASES. (A) CIT VS. CRESCENT EXPORT SYNDICATE (ORDER DATED 3.4.2013)(CAL) (B) CIT VS. SIKANDARKHAN T TUNVAR (ORDER DATED 2. 5.2013)(GUJ) HENCE WE ARE UNABLE TO AGREE WITH THE CONTENTIONS RAISED BY LD A.R. ACCORDINGLY WE UPHOLD THE ORDER OF LD CIT(A) ON THIS ISSUE. I.T.A. NOS. 373&374/COCH/2012 7 5. THE LAST ISSUE RELATES TO THE ADDITION MADE U/S 41(1) OF THE ACT IN RESPECT OF SUNDRY CREDITORS WRITTEN OFF BY THE ASSESSEE. THE AO NOTICED THAT THE ASSESSEE HAS WRITTEN OFF SUNDRY CREDITORS BALANCES TO THE TUNE OF RS.2 87 677/- IN ASSESSMENT YEAR 2005-06 AND CREDITED THE SAME IN THE PROFIT AND LOS S ACCOUNT. HOWEVER WHILE COMPUTING THE TOTAL INCOME THE ASSESSEE EXCLUDED T HE ABOVE SAID AMOUNT. THE AO HELD THAT THE LIABILITY SO WRITTEN OFF BY THE ASSES SEE IS ASSESSABLE U/S 41(1) OF THE ACT AND ACCORDINGLY ASSESSED THE SAME. THE LD CIT(A) A LSO CONFIRMED THE ORDER OF THE AO ON THIS ISSUE. 5.1 BEFORE US THE LD A.R SUBMITTED THAT THE PR OVISIONS OF SEC. 41(1) SHALL BE ATTRACTED ONLY IF THE AMOUNT SO CREDITED TO THE PRO FIT AND LOSS ACCOUNT REPRESENTS THE AMOUNTS ALREADY ALLOWED AS DEDUCTION WHILE COMPUTIN G THE INCOME. HE SUBMITTED THAT THE AO HAS FAILED TO SHOW THAT THE AMOUNT WRITTEN O FF BY THE ASSESSEE WAS ALREADY ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME. BY PLACING RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VAR DHAMANA OVERSEAS LTD (342 ITR 408) THE LD A.R CONTENDED THAT THE SUMMARY ADDITIO N MADE BY THE AO WITHOUT CONSIDERING VARIOUS ASPECTS IS NOT SUSTAINABLE IN L AW. HE FURTHER SUBMITTED THAT THE UNILATERAL WRITING OFF OF SUNDRY CREDITORS BALANCES ARE NOT LIABLE TO BE ASSESSED U/S 41(1) OF THE ACT AND FOR THIS PROPOSITION HE PLACED RELI ANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. KESARIA TEA CO . LTD (254 ITR 434). 5.2 WE HEARD LD D.R IN THIS REGARD. IT IS AN A DMITTED FACT THAT THE ASSESSEE HAS WRITTEN OFF THE SUNDRY CREDITORS BALANCE IN ITS BOO KS OF ACCOUNT MEANING THEREBY IT HAS TREATED CERTAIN LIABILITIES AS NO LONGER PAYABLE. HENCE THE PRIMA FACIE PRESUMPTION IS THAT THE PROVISIONS OF SEC. 41(1) MAY BE ATTRACTED TO THE AMOUNTS SO WRITTEN OFF. HOWEVER AS SUBMITTED BY LD A.R THE PRIMARY CONDIT ION TO BE SATISFIED FOR ASSESSING AN AMOUNT UNDER THE PROVISIONS OF SEC. 41(1) IS THAT T HE AMOUNT SO WRITTEN OFF SHOULD HAVE BEEN ALLOWED AS A DEDUCTION WHILE COMPUTING THE INC OME FOR INCOME TAX PURPOSES. THOUGH THE ASSESSEE CONTENDS THAT THE AO HAS NOT ES TABLISHED THAT THE ABOVE SAID CONDITION IS SATISFIED IN THIS CASE YET WE NOTICE THAT THE ASSESSEE HAS ALSO FAILED TO I.T.A. NOS. 373&374/COCH/2012 8 SHOW THAT THE IMPUGNED AMOUNTS HAVE NOT BEEN ALLOWE D AS A DEDUCTION. WE NOTICE THAT THE ASSESSEE INSTEAD OF PROVING ITS CLAIM WIT H MATERIAL EVIDENCES SIMPLY FINDS FAULT WITH THE ASSESSING OFFICER THAT TOO WITH ORAL SUBM ISSIONS. IN OUR VIEW SUCH TYPES OF ORAL CONTENTIONS CANNOT BE RECOGNISED. FURTHER WE NOTICE THAT THE EXPLANATION 1 TO SEC. 41(1) PROVIDES FOR ASSESSING OF LIABILITIES WRITTEN OFF BY UNILATERAL ACT ALSO. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT MADE U/S 41(1) OF THE ACT. 6. IN THE RESULT BOTH THE APPEALS FILED BY TH E ASSESSEE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 11-10-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 11TH OCTOBER 2013 GJ COPY TO: 1. M/S. ACHUTHAN PILLAI & CO. INDIRA GANDHI ROAD W/ISLAND KOCHI-3. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE -3(1) MATTANCHERRY. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II KOCH I. 4.THE COMMISSIONER OF INCOME-TAX KOCHI 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T COCHIN I.T.A. NOS. 373&374/COCH/2012 9