Industrial Investment Bank Of India Limited, Kolkata v. D.C.I.T Cir - 6,kolkata., Kolkata

ITA 540/KOL/2013 | 2009-2010
Pronouncement Date: 28-09-2016

Appeal Details

RSA Number 54023514 RSA 2013
Assessee PAN AABCI0324D
Bench Kolkata
Appeal Number ITA 540/KOL/2013
Duration Of Justice 3 year(s) 6 month(s) 15 day(s)
Appellant Industrial Investment Bank Of India Limited, Kolkata
Respondent D.C.I.T Cir - 6,kolkata., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2016
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 28-09-2016
Date Of Final Hearing 26-09-2016
Next Hearing Date 26-09-2016
Assessment Year 2009-2010
Appeal Filed On 14-03-2013
Judgment Text
1 ITA NO. 540/KOL/2013 INDUSTRIAL INVESTMENT BANK OF INDIA LTD. AY 2009-1 0 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI P. M. JAGTAP AM & SHRI K. NARASIMHA CHARY JM] I.T.A NO. 540/KOL/2013 ASSESSMENT YEAR: 2009-10 INDUSTRIAL INVESTMENT BANK OF INDIA LTD. VS. DEPU TY COMMISSIONER OF INCOME-TAX (PAN:AABCI0324D) CIRCLE-6 KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 26.09.2016 DATE OF PRONOUNCEMENT: 28.09.2016 FOR THE APPELLANT: SHRI SANJAY BHATTACHARYA F CA FOR THE RESPONDENT: SHRI R. S. BISWAS CIT ORDER PER SHRI K. NARASIMHA CHARY JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-VI KOLKATA VIDE APPEAL NO. 282/CIT(A)-VII/CIR-6/2011-12/KOL DATED 14.01.2 013. ASSESSMENT WAS FRAMED BY DCIT CIRCLE-6 KOLKATA U/S. 143(3) OF THE INCOME T AX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2009-10 VIDE HIS ORDER DATED 29.1 2.2011. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDUSTRIAL INVESTMENT BANK. FOR THE AY 2009-10 IT HAD FILED REVISED RETURN OF INCOME ON 29.03.2010 DECLARING A LOSS OF RS.74 72 10 744/-. THE AO DISALLOWED BAD DEBTS WRI TTEN OFF TO A TUNE OF RS.51 95 96 000/-. ACCORDING TO ASSESSEE IT HAD WRITTEN BACK A SUM OF RS.207 51 95 000/- OUT OF PROVISION MADE FOR DOUBTFUL DEBTS AND REDUCED THE SAME WHILE COMPUTING BOOK PROFIT U/S. 115JB OF THE ACT. CHALLENGING THE DISALLOWANCE OF RS.51 95 96 000/- THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO BY WAY OF IMPU GNED ORDER DISMISSED THE RELEVANT GROUND ON THIS ISSUE AND UPHELD THE DISALLOWANCE. 3. AGGRIEVED BY THE SAME THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. THAT THE CIT(A) WAS WRONG IN CONFIRMING THE AC TION OF THE ASSESSING OFFICER IN DISALLOWING RS.51 95 96 000/- BEING BAD DEBTS WRITT EN OFF. 2. THAT WITHOUT PREJUDICE TO THE CONTENTION RAISED IN GROUND NO. 1 ABOVE THE CIT(A) FAILED TO APPRECIATE THAT DUE TO WRITING BACK OF PROVISION TO THE EXTENT OF RS.124 69 89 000/- IN THE ASSESSMENT YEAR 2004-05 THE BALANCE IN THE ACCOUNT OF PROVISION FOR DOUBTFUL DEBTS HAD BEEN SUBSTANTIALLY REDUCED AND THUS HE ERRED IN HOL DING THAT THE BAD DEBTS WRITTEN OFF WOULD NOT EXCEED THE BALANCE IN THE ACCOUNT OF PROVISION FOR DOUBTFUL DEBTS. 2 ITA NO. 540/KOL/2013 INDUSTRIAL INVESTMENT BANK OF INDIA LTD. AY 2009-1 0 4. AT THE TIME OF HEARING LD. AR DID NOT PRESS GROU ND NO. 2 AND HENCE THE SAME IS DISMISSED BEING NOT PRESSED. 5. IN RESPECT OF GROUND NO. 1 IT IS THE ARGUMENT O F THE LD. AR THAT THE ACCOUNT REFERRED TO IN PROVISO TO SECTION 36(1)(VII) OF THE ACT IS T HE ACCOUNT THAT HAD BEEN MADE UNDER CLAUSE (VIIA) OF SECTION 36(1) OF THE ACT AND NOT THE ACCO UNT OF THE PROVISION FOR BAD AND DOUBTFUL DEBTS AS APPEARING IN THE FINANCIAL ACCOUNT. IT IS HIS FURTHER ARGUMENT THAT UNLESS A RELATIONSHIP BETWEEN THE BAD DEBTS WRITTEN OFF AND THE PROVISIONS WHICH WAS ALLOWED EARLIER IS MADE OUT PROVISO TO SECTION 36(1)(VII) OF THE A CT HAS NO APPLICATION. 6. LD. DR ON THE OTHER HAND VEHEMENTLY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND URGED BEFORE THE BENCH TO CONFIRM THE ORDER OF LD. CIT(A) IN THIS REGARD. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. UNDER SECTION 36(1)(VIIA)(C) OF THE ACT A S TATE INDUSTRIAL INVESTMENT CORPORATION SHALL BE ALLOWED DEDUCTIONS IN RESPECT OF ANY PROVI SION FOR BAD AND DOUBTFUL DEBTS MADE BY IT AN AMOUNT NOT EXCEEDING 5% OF THE TOTAL INCOME COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THAT PARTICULAR CLAUSE AND CHAPTER VIA. PROV ISO TO SECTION36(1)(VII) OF THE ACT STATES THAT TO THE ASSESSEE TO WHOM CLAUSE (VIIA) OF THE A CT APPLIES THE AMOUNT OF BAD DEBT OR PART THEREOF WHICH IS WRITTEN OFF AS IRRECOVERABLE IN TH E ACCOUNT OF THE ASSESSEE FOR THE PREVIOUS YEAR THE AMOUNT OF THE DEDUCTION RELATING TO ANY S UCH DEBT OR PART THEREOF SHALL BE LIMITED TO THE AMOUNTS BY WHICH SUCH DEBT OR PART THEREOF EXCE EDS THE CREDIT BALANCE IN THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNT MADE UNDER THAT CLAUSE (VIIA) OF SECTION 36(1) OF THE ACT. 8. IN THE INSTANT CASE WE FOUND THAT IT IS AN ADMI TTED FACT THAT THE ASSESSEE MADE PROVISION FOR RS.126 67 12 600/- IN HIS BOOKS AND CLAIMED AS DEDUCTION IN THE AY 2003-04 U/S. 36(1)(VIIA)(C) OF THE ACT. OUT OF SAID PROVIS ION THE ASSESSEE HAS PERIODICALLY WRITING OF VARIOUS AMOUNTS AS FOLLOW: BAD DEBTS WRITTEN OFF DISALLOWED: AY AMOUNT 2003-04 70 15 873 2004-05 1 42 48 266 2005-06 8 20 27 924 2006-07 9 71 69 000 2007-08 3 ITA NO. 540/KOL/2013 INDUSTRIAL INVESTMENT BANK OF INDIA LTD. AY 2009-1 0 2008-09 19 59 35 000 2009-10 51 95 96 000 AFTER WRITING OFF THE AFORESAID AMOUNTS TILL 2009- 10 TO A TUNE OF RS.91 59 92 063/- THE UNABSORBED PORTION STILL LEFT WITH THE ASSESSEE WOR KS TO RS.35 22 62 228/-. THE LD. AR SUBMITTED THAT A SUM OF RS.12 95 83 000/- WAS ALSO DISALLOWED FOR AY 2007-08 AND IT SHOULD ALSO BE CONSIDERED. EVEN IN THAT EVENT ALSO THERE IS A CREDIT BALANCE OF MORE THAN RS.21 CR. 9. ADMITTEDLY THE AMOUNTS WRITTEN OFF AS STATED ABO VE INCLUDES A SUM OF RS. 51 95 96 000/- RELATING TO THE ASSESSMENT YEAR 2009 -10 WHICH THE ASSESSEE CLAIMS AS DEDUCTION UNDER SECTION 36(1)(VII) . WE FIND THAT IF THIS DEDUCTION IS ALLOWED THEN IT WOULD AMOUNT TO DOUBLE DEDUCTION GRANTED TO THE ASSESSEE IN VIEW OF THE FACT THAT THE ASSESSEE HAS ALREADY GRANTED DEDUCTION UNDER SECTION 36(1) (VIIA )(C) OF THE ACT IN VIEW OF MAKING PROVISION IN THE YEAR 2003-04. SINCE THE BAD DEBTS WRITTEN OFF IN THE CURRENT ASSESSMENT YEAR DO NOT EXCEED CREDIT BALANCE IN THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNT THE AUTHORITIES BELOW HAVE RIGHTLY DISALLOWED THE AMOUN T CLAIMED AS DEDUCTION BY THE ASSESSEE INASMUCH AS THE INTENTION OF THE LEGISLATURE WAS TO SEE THAT DEDUCTIONS FOR BAD DEBTS IN RESPECT OF THE VERY SAME AMOUNT COVERED BY CLAUSE ( VIIA) OF THE ACT IS NOT AGAIN CLAIMED UNDER CLAUSE (VII) OF THE ACT. WITH THIS VIEW OF T HE MATTER WE DO NOT FIND ANY MERITS IN THE CONTENTION OF THE LD. AR. HENCE WE FIND THAT THE ORDERS OF THE AUTHORITIES BELOW DO NOT WARRANT ANY INTERFERENCE AND THE SAME ARE HEREBY UP HELD. THIS GROUND OF APPEAL OF ASSESSEE IS DISMISSED. 10. IN THE RESULT THE APPEAL OF ASSESSEE IS DISMIS SED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 28.09.201 6. SD/- SD/- (P.M.JAGTAP) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28TH SEPTEMBER 2016 JD.(SR.P.S.) 4 ITA NO. 540/KOL/2013 INDUSTRIAL INVESTMENT BANK OF INDIA LTD. AY 2009-1 0 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT INDUSTRIAL INVESTMENT BANK OF INDIA LT D. 19 NETAJI SUBHAS ROAD KOLKATA-700 001. 2 RESPONDENT DCIT CIRCLE-6 KOLKATA. 3 . THE CIT(A) KOLKATA 4. 5. CIT KOLKATA DR KOLKATA BENCHES KOLKATA / TRUE COPY BY ORDER ASSTT. REGISTRAR .