Shipra Petro Products Pvt.Ltd.,, Baroda v. The Income tax Officer,Ward-4(3),, Baroda

ITA 533/AHD/2010 | 2006-2007
Pronouncement Date: 25-04-2014 | Result: Allowed

Appeal Details

RSA Number 53320514 RSA 2010
Assessee PAN AAHCS2533G
Bench Ahmedabad
Appeal Number ITA 533/AHD/2010
Duration Of Justice 4 year(s) 2 month(s) 8 day(s)
Appellant Shipra Petro Products Pvt.Ltd.,, Baroda
Respondent The Income tax Officer,Ward-4(3),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 25-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 25-04-2014
Date Of Final Hearing 04-04-2014
Next Hearing Date 04-04-2014
Assessment Year 2006-2007
Appeal Filed On 16-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMADABAD BEFORE SHRI D.K.TYAGI JUDICIAL MEMBER AND .. SHRI T.R. MEENA ACCOUNTANT MEMBER !.. ' # $ # $ # $ # $ ITA NO. 533/AHD/2010 ASSESSMENT YEAR :2006-07 SHIPRA PETRO PRODUCTS P. LTD 11 NARSINHDHAM COMPLEX OPP: SANGAM BUS STOP HARNI ROAD BARODA V/S . THE INCOME TAX OFFICER WARD-4(3) BARODA PAN NO. AAHC S 2533 G (APPELLANT) .. (RESPONDENT) %& ' ( / BY APPELLANT SHRI K. C. MATHEWS SR.D.R. )%& ' ( /BY RESPONDENT SRI M.K. PATEL A.R *+ ' -' /DATE OF HEARING 04.04.2014 ./0 ' -' /DATE OF PRONOUNCEMENT 25.04.2014 O R D E R PER : SHRI D.K. TYAGI JUDICIAL MEMBER THIS IS THE APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF LD. CIT(A)-III BARODA DATED. 15-10-2009. 2. ASSESSEE HAS TAKEN FOLLOWING EFFECTIVE GROUND:- 1. THE LD. CIT(A) ERRED IN HOLDING THAT THE LOSS O N ACCOUNT OF ADVANCES GIVEN FOR PURCHASE OF MATERIAL HAD NOT BEC OME FINAL DURING THE YEAR. ITA NO. 533/AHD/10 A.Y. 2006-07 SHIPRA PETRO PRODUCTS P. LTD VS. ITO PAGE 2 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD PL ACED AN ORDER TO PURCHASE A BASE OIL SN 500 TO M/S. SINA SHIMI ARYAN CO OF IRAN THROUGH SHRI KUNWER BABER INTERNATIONAL CONSULTANT INC OF DELHI AND HIS VADODARA AGENT M/S. VINUS IMPEX 2005 SAFFERN TOWERN FATHEGUNJ VADORDARA. THE SUPPLIER COMPANY HAD OFFERED TO SUP PLY 100 MT OF BASE OIL 500 @ 375 EURO PER MT CNF NAHVASHIYA PERFORMA O FFICER BIL) NO. SJ/ICI/PT/BO/0025 DT. 29.09.2005. AS PER THE PERFO RMA OFFER THE SUPPLER HAD DEMANDED 175 EURO PER MT AS AN ADVANCE PAYMENT AGAINST ABOVE PI THROUGH SWIFT TRANSFER TO HIS BANK SADERANT IRABN SANATI BRANCH-YAZD. BANK CODE 2761/C. O 140126 SWIFT BSIRITHSAY NAME M ORAD ROSTANI. THE BALANCE PAYMENT WAS TO BE GIVEN AGAIN ST THE COPY OF B/L I.E. AT THE TIME OF LOADING OF MATERIAL. BUT THE C ONSIGNMENT WAS NOT DELIVERED TO THE ASSESSEE AND THE AMOUNT ADVANCED W AS WRITTEN OFF AS BAD DEBTS. THE AO DID NOT ALLOW THE CLAIM HOLDING THAT AMOUNT GIVEN AS ADVANCE WITH A CAPITAL OUTGO WAS A CAPITAL LOSS. 4. IN APPEAL THE LD. CIT(A) AFTER TAKING INTO CONS IDERATION THE SUBMISSION OF THE ASSESSEE HELD THAT AO WAS NOT COR RECT IN TREATING THE LOSS A CAPITAL LOSS. HE ALSO HELD THAT CLAIM OF T HE ASSESSEE WAS NOT A BAD DEBT EITHER. HE WAS OF THE VIEW THAT THIS CLAIM CA N BE CONSIDERED U/S. 37 OF THE ACT BUT SINCE LEGAL PROCEEDINGS FOR RECOVERI NG OF THIS AMOUNT HAVE BEEN INITIATED BY THE ASSESSEE AND HAVE NOT REACHED A FINALITY DURING THE YEAR UNDER APPEAL THE CLAIM OF LOSS CANNOT BE ALLO WED AS BUSINESS EXPENDITURE. DURING THE APPELLATE PROCEEDINGS BEFO RE US AN AFFIDAVIT OF DIRECTOR OF THE ASSESSEE-COMPANY WAS FILED STATING THAT NO LEGAL PROCEEDINGS WAS PENDING FOR RECOVERY OF THIS AMOUNT . BESIDES GIVING A LEGAL NOTICE TO THE INDIAN AGENT FOR RECOVERY OF TH E AMOUNT ADVANCED NO FURTHER ACTION BY WAY OF FILING OF ANY LEGAL SUIT W AS TAKEN BY THE ASSESSEE- COMPANY. IN VIEW OF THIS FACTUAL POSITION WE ARE OF THE CONSIDERED OPINION THAT ASSESSEE HAD NO CHANCE OF RECOVERING THIS AMO UNT AND THE CLAIM OF ITA NO. 533/AHD/10 A.Y. 2006-07 SHIPRA PETRO PRODUCTS P. LTD VS. ITO PAGE 3 THE ASSESSEE CANNOT BE SAID TO BE PRE-MATURE AND HE NCE IS ALLOWABLE. THE ADDITION OF RS. 9 47 247/- MADE BY AO AND SUST AINED BY LD. CIT(A) IS THEREFORE HEREBY DELETED. 5. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 25.04.2014 SD/- SD/- (T.R. MEENA) (D.K.TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER A.K. 1 1 1 1 ' '' ' )-2 )-2 )-2 )-2 320- 320- 320- 320- / COPY OF ORDER FORWARDED TO:- 1. %& / APPELLANT 2. )%& / RESPONDENT 3. - *7 / CONCERNED CIT 4. *7- / CIT (A) 5. 2; )-+ / DR ITAT AHMEDABAD 6. = >? / GUARD FILE. BY ORDER/ 1 @/ B $