Shaw Wallace Breweries Ltd.,, Bangalore v. CIT, Bangalore

ITA 553/BANG/2013 | 2003-2004
Pronouncement Date: 04-10-2013 | Result: Dismissed

Appeal Details

RSA Number 55321114 RSA 2013
Assessee PAN AAFCS3230E
Bench Bangalore
Appeal Number ITA 553/BANG/2013
Duration Of Justice 5 month(s) 9 day(s)
Appellant Shaw Wallace Breweries Ltd.,, Bangalore
Respondent CIT, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 04-10-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 04-10-2013
Date Of Final Hearing 04-09-2013
Next Hearing Date 04-09-2013
Assessment Year 2003-2004
Appeal Filed On 25-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN JUDICIAL MEMBER AND SHRI JASON P. BOAZ ACCOUNTANT MEMBER ITA NO.825/BANG/2012 ASSESSMENT YEAR : 2003-04 THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 12(3) BANGALORE. VS. M/S. SHAW WALLACE BREWERIES LTD. UB TOWERS 6 TH FLOOR 24 VITTAL MALLYA ROAD BANGALORE 560 001. PAN : AAFCS 3230E APPELLANT RESPONDENT ITA NO.553/BANG/2013 ASSESSMENT YEAR : 2003- 04 M/S. SHAW WALLACE BREWERIES LTD. UB TOWERS 6 TH FLOOR 24 VITTAL MALLYA ROAD BANGALORE 560 001. PAN : AAFCS 3230E VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 12(3) BANGALORE. APPELLANT RESPONDENT REVENUE BY : SHRI PRAVEEN KARANTH JT. CIT (DR) ASSESSEE BY : MISS GIRIJA G.P. C.A. DATE OF HEARING : 27.09.2013 DATE OF PRONOUNCEMENT : 04.10.2013 ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 2 OF 13 O R D E R PER BENCH ITA NO.825/B/12 IS AN APPEAL BY THE REVENUE WHIL E ITA NO.553/BANG/13 IS AN APPEAL BY THE ASSESSEE. BOTH THESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 01.03.2012 OF THE CIT(APPEALS)-III BANGALORE RELATING TO ASSESSMENT YEAR 2003-04. 2. FIRST WE SHALL TAKE UP FOR CONSIDERATION THE APP EAL BY THE REVENUE. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READS A S FOLLOWS: 1. THE ORDER OF THE LEARNED CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) ERRED IN HOLDING THAT THE BAD DEBTS OF RS 1 90 22 677 HAVING BEEN WRITTEN OFF IN THE BOOK OF ACCOUNTS SHOULD BE ALLOWED IGNORING THE FACT THAT THE ASSESS EE FAILED TO PROVE AS TO HOW THESE DEBTS HAVE BEEN BROUGHT INTO ITS BOOKS BEFORE WRITE OFF AND SUCH DEBTS BELONG TO ITS SUBS IDIARY COMPANY WHICH OUGHT NOT TO HAVE BEEN TAKEN OVER FOLLOWING T HE TERMS OF CONTRACT FOR MANUFACTURING OF BREWERY PRODUCT. 3. THE CIT(A) OUGHT TO HAVE APPRECIATED THE ASSESS ING OFFICERS VIEW THAT BEING A WHOLESALE DISTRIBUTOR O F BREWERY PRODUCTS THE LOSSES BY WAY OF WRITE OFF OF DEBTS A RISING ON SEDIMENTATION SHOULD HAVE BEEN BORNE BY THE MANUFAC TURER OR SUBSIDIARY COMPANY. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE CIT( A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND TH AT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND AND / OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 3 OF 13 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MARKETING OF BEER MANUFACTURED BY ITS GROUP CONCERNS. THE ASSES SEE CLAIMED A DEDUCTION OF RS.1 90 22 677 UNDER THE HEAD BAD DEB TS. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE FOR DE DUCTION ON THE GROUND THAT THE ASSESSEE FAILED TO ESTABLISH THAT THE DEBT S HAVE BECOME BAD. ON APPEAL BY THE ASSESSEE THE CIT(APPEALS) CONFIRMED THE ORDER OF THE AO FOR THE REASON THAT THE ASSESSEE FAILED TO FILE THE RELEVANT DETAILS TO JUSTIFY THE CLAIM FOR DEDUCTION ON ACCOUNT OF BAD DEBTS. T HE ASSESSEE PREFERRED APPEAL AGAINST THE ORDER OF THE CIT(A) BEFORE THE M UMBAI BENCH OF THE TRIBUNAL IN ITA NO.5355/MUM/2006. THE MUMBAI TRIBU NAL HELD THAT AS LAID DOWN BY THE MUMBAI SPECIAL BENCH OF THE ITAT IN THE CASE OF DIT V. OMAN INTERNATIONAL BANK 100 ITD 285 (SB)(DEL) THE ASSESSEE WAS NOT REQUIRED TO ESTABLISH THAT THE DEBT HAS BEC OME BAD. THE TRIBUNAL HOWEVER HELD THAT SINCE THE DETAILS OF THE DEBTS A ND THE JUSTIFICATION FOR ITS WRITING OFF WHICH WAS FILED BEFORE THE CIT(A) WAS N OT EXAMINED BY THE AO IT WOULD BE APPROPRIATE TO SET ASIDE THE ORDER OF THE CIT(A) AND REMAND THE ISSUE TO THE FILE OF THE AO TO DECIDE THE SAME IN A CCORDANCE WITH LAW. 4. PURSUANT TO THE ORDER OF THE TRIBUNAL THE AO TO OK UP THE ISSUE FOR CONSIDERATION. THE ASSESSEE FILED THE DETAILS OF T HE SUM OF RS.1 90 22 677 WHICH WAS CLAIMED AS BAD DEBTS AS FOLLOWS:- 1. SWASTIK ENTERPRISES RS. 1 50 000 2. SHYAM WINES RS. 2 64 708 3. SAI TRADERS RS. 1 05 621 ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 4 OF 13 4. MOHIT LIQUORS RS. 7 82 570 5. SUPER TRADERS RS. 7 18 999 6. HONEST MARKETING RS. 3 64 478 7. SKOL RS. 1 62 52 987 5. BEFORE THE AO THE ASSESSEE SUBMITTED THAT IT EN GAGES THE SERVICES OF MANUFACTURERS OF BEER. AS PER THE AGREEMENT WIT H SUCH MANUFACTURERS THEY HAVE TO GIVE THE ASSESSEE THE REQUIRED QUANTIT Y OF BEER. THE QUANTITY GIVEN BY THE MANUFACTURERS IS GENERALLY LESS THAN W HAT WAS AGREED TO BE GIVEN. THE MANUFACTURERS WOULD CLAIM THAT THE DIFF ERENCE IS DUE TO LOSS ON ACCOUNT OF SEDIMENTATION. THE PROCESS OF SEDIMENTAT ION IS THAT CERTAIN QUANTITY OF BEER MANUFACTURED BECOMES UNUSABLE BECA USE OF THE FORMATION OF SEDIMENTS WHICH RESULTS IN THE BEER BEING RENDER ED UNFIT FOR CONSUMPTION. ACCORDING TO THE ASSESSEE IT RECOGNI ZED THE LIABILITY OF THE BEER MANUFACTURERS IN ITS BOOKS OF ACCOUNTS BUT TH E BEER MANUFACTURERS REFUSE TO PAY THE SAID LIABILITY ON THE GROUND THAT THE LOSS IN QUESTION WAS A SEDIMENTATION LOSS. THE AO CALLED FOR THE AGREEMEN T BETWEEN THE ASSESSEE AND HARYANA BREWERIES LTD. IN WHICH PARA 11 PROVIDED AS FOLLOWS:- THE PRESENCE OF THE SWBL TECHNICAL REPRESENTATIVE DOES NOT ABSOLVE HBL OF ITS RESPONSIBILITY TO MANUFACTUR E BEER TO SWBL SPECIFICATIONS AND STANDARDS. IF THERE ARE ANY MANUFACTURING COMPLAINTS FROM THE MARKET FOR SUBSTA NDARD QUALITY OR PACKAGING HBL SHALL AT ITS COST ARRANGE TO COLLECT THE SUBSTANDARD STOCKS (AFTER GETTING NECESSARY EXCISE AND OTHER PERMISSIONS) REPROCESS AND RESUPPLY THE STOCKS. IF SUCH REPROCESSING IS NOT POSSIBLE THEN HBL WILL INDEMNIF Y SWBL AGAINST ALL CLAIMS PROCEEDINGS LOSSES DAMAGES CH ARGES EXPENSES ETC. WHICH MAY BE MADE AGAINST OR SUFFERE D BY SWBL. ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 5 OF 13 6. ACCORDING TO THE AO THE ABOVE CLAUSE IN THE AGR EEMENT WOULD SHOW THAT THE MANUFACTURER HAS TO MANUFACTURE BEER ACCOR DING TO SPECIFICATIONS AND STANDARDS AND ANY SUB-STANDARD QUALITY OR LOSS IN MANUFACTURING HAS TO BE BORNE ONLY BY THE MANUFACTURER AND NOT BY THE AS SESSEE. THE AO THEREFORE WAS OF THE VIEW THAT THE LIABILITY IN QUE STION ITSELF WAS NOT THAT OF THE ASSESSEE BUT THAT OF THE MANUFACTURER AND THER EFORE THE QUESTION OF ALLOWING THE CLAIM OF THE ASSESSEE ON ACCOUNT OF BA D DEBTS CANNOT BE ENTERTAINED. 7. IT WAS CONTENDED BEFORE THE CIT(APPEALS) THAT TH E LOSS IN QUESTION WAS INCIDENTAL TO THE BUSINESS OF THE ASSESSEE AND HAD TO BE ALLOWED AS DEDUCTION. RELIANCE WAS ALSO PLACED ON THE DECISIO N OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD. V. CIT 323 ITR 397 (SC) FOR THE PROPOSITION THAT TO CLAIM DEDUCTION ON ACCOUNT OF BAD DEBTS IT WAS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DE BT IN QUESTION HAS BECOME BAD. 8. THE CIT(APPEALS) AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE NOTED THAT THE ISSUE TO BE DECIDED WAS TH E EXISTENCE OF THE DEBT. HE OBSERVED THAT SEDIMENTATION CLAIMS ARE THE NORMA L FEATURES OF THE BUSINESS CARRIED ON BY THE ASSESSEE. HE FOUND THAT AS PER THE AGREEMENT BETWEEN THE ASSESSEE AND THE MANUFACTURER OF THE BR EWERY THE MANUFACTURER HAS TO BEAR THE LOSS DUE TO SEDIMENTAT ION. HE THEREFORE ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 6 OF 13 CAME TO THE CONCLUSION THAT THE LOSS ON ACCOUNT OF SEDIMENTATION WHICH THE MANUFACTURERS HAVE TO BEAR IS A DEBT DUE BY THE MAN UFACTURER TO THE ASSESSEE. HE THEREFORE HELD THAT THE EXISTENCE OF THE DEBT OF THE MANUFACTURERS TOWARDS THE ASSESSEE CANNOT BE DISPUT ED. THEREAFTER THE CIT(A) HELD THAT AS LAID DOWN BY THE HONBLE SUPREM E COURT IN THE CASE OF TRF LTD. (SUPRA) IT WAS NOT NECESSARY FOR THE ASSESSEE TO PROVE TH AT THE DEBT IN QUESTION HAS BECOME BAD AND IRRECOVERABLE. HE THEREFORE DIRECTED THE AO TO ALLOW THE ASSESSEES CLAIM OF DEDUCTION O N ACCOUNT OF BAD DEBT. 9. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS) THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 10. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR WH O REITERATED THE STAND OF THE REVENUE AS REFLECTED IN THE GROUNDS OF APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BE FORE THE CIT(A). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT I S CLEAR FROM THE FACTS AS IT EMANATES FROM THE ORDERS OF THE REVENUE AUTHO RITIES THAT THE QUANTITY SHORT SUPPLIED BY THE MANUFACTURERS OF BEER ARE DUE TO SEDIMENTATION. IT IS NO DOUBT TRUE THAT AS PER THE AGREEMENT BETWEEN THE ASSESSEE AND THE MANUFACTURERS OF BEER THE SEDIMENTATION LOSS HAS T O BE BORNE ONLY BY THE MANUFACTURERS. THE ASSESSEE HAS THEREFORE RECOGNIZ ED THE LIABILITY WHICH THE BEER MANUFACTURER HAS TO PAY THE ASSESSEE ON AC COUNT OF SHORT SUPPLY OF BEER DUE TO SEDIMENTATION LOSS IN ITS BOOKS OF A CCOUNT. THIS LIABILITY HAS ALL THE INGREDIENTS OF A DEBT. IT IS NOT IN DISPUT E THAT THIS DEBT HAS BEEN ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 7 OF 13 TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE A SSESSEE IN THE EARLIER PREVIOUS YEAR. THE ASSESSEE IN ITS WISDOM HAS PREF ERRED TO TREAT THIS DEBT AS NOT RECOVERABLE AND ACCORDINGLY WROTE IT OFF AS A BAD DEBT. ON THE FACTS OF THE CASE WE FIND THAT THE CONDITIONS FOR ALLOWI NG THE DEDUCTION CLAIMED BY THE ASSESSEE ON ACCOUNT OF BAD DEBTS AS LAID DOW N IN SECTION 36(1)(VII) AND SECTION 36(2) OF THE ACT HAVE BEEN FULFILLED. THE GRIEVANCE OF THE REVENUE AS PROJECTED IN THE GROUNDS OF APPEAL APPEA RS TO BE THAT THE BEER MANUFACTURERS WERE SUBSIDIARY COMPANIES AND THAT TH E LOSSES IN QUESTION OUGHT TO HAVE BEEN BORNE BY THEM. AS WE HAVE ALREA DY SEEN THIS WILL NOT BE A RELEVANT CRITERION FOR DISALLOWING THE CLAIM O F THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF BAD DEBTS. FOR THE REASONS GIVEN ABOVE WE DO NOT FIND ANY GROUNDS TO INTERFERE WITH THE ORDER OF THE LD. CIT(APPEALS). CONSEQUENTLY THE APPEAL BY THE REVENUE IS DISMISSE D. ITA NO.553/BANG/2013 12. THERE IS A DELAY OF ABOUT 319 DAYS IN FILING TH E PRESENT APPEAL BY THE ASSESSEE. IN THE PETITION FOR CONDONATION OF DELAY IN FILING THE APPEAL IT HAS BEEN STATED BY THE DIRECTOR OF THE ASSESSEE THAT ON RECEIPT OF THE IMPUGNED ORDER OF THE CIT(A) THE APPEAL WAS PREPARED AND SE NT TO THE ASSESSEE FOR SIGNATURE. AS THE DIRECTOR OF THE ASSESSEE WAS TRA VELLING THE PAPERS WERE LEFT UNSIGNED AND LATER MISPLACED. WHEN THE ASSESS EE RECEIVED THE NOTICE OF APPEAL BY THE DEPARTMENT AGAINST THE IMPUGNED OR DER OF THE CIT(A) IT WAS REALIZED THAT THE ASSESSEES APPEAL HAD NOT BEE N FILED. THE ASSESSEE ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 8 OF 13 HAS THEREFORE PRAYED THAT THE DELAY IN FILING THE A PPEAL IS ACCIDENTAL AND INADVERTENT. THE CONTENTS OF THE PETITION HAVE BEE N AFFIRMED AS TRUE BY AN AFFIDAVIT OF ONE SHRI S. ANANDA PRASAD WHO CLAIMS TO BE THE EMPLOYEE AND INCHARGE OF TAX MATTERS OF THE ASSESSEE. 13. WE HAVE CONSIDERED THE REASONS FOR THE DELAY IN FILING THE APPEAL. WE FIND THE REASONS GIVEN FOR CONDONATION OF THE DE LAY TO BE VERY VAGUE AND LACKING IN PARTICULARS. HOWEVER KEEPING IN MI ND THAT A LIBERAL APPROACH HAS TO BE ADOPTED WHILE CONSIDERING APPLIC ATIONS FOR CONDONING DELAY IN FILING THE APPEALS ARISING OUT OF TAX MATT ERS BY THE ASSESSEES WE CONDONE THE DELAY IN FILING THE APPEAL BY THE ASSES SEE. 14. AS FAR AS THE MERITS OF THE GRIEVANCE PROJECTED BY THE ASSESSEE IN ITS APPEAL THE FACTUAL BACKGROUND IS AS FOLLOWS. AS W E HAVE ALREADY SEEN THE ASSESSMENTS WERE ORIGINALLY COMPLETED U/S. 143(3) O F THE ACT ON 07.03.2006 IN WHICH THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF BAD DEBTS OF RS.1 90 22 677 WAS DISALLOWED BY THE A O. AGAINST THE AFORESAID DISALLOWANCE THE ASSESSEE PREFERRED APPE AL BEFORE THE CIT(APPEALS). THE ASSESSEE FOR THE FIRST TIME SUBM ITTED BEFORE THE CIT(A) THAT IT HAD INCURRED AN EXPENDITURE OF RS.3 65 62 6 25 IN THE EARLIER YEARS AND THE SAME HAS TO BE WRITTEN OFF AS DEBTS AND ADV ANCES NOT RECOVERABLE. THE ASSESSEE FURTHER SUBMITTED THAT OUT OF THE AFOR ESAID SUM OF RS.3 65 62 625 A SUM OF RS.1 56 46 055 HAS ALREADY BEEN INCLUDED IN THE CLAIM OF RS.1 90 22 677 (WHICH IS ALREADY CONSIDERE D IN THE APPEAL OF THE ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 9 OF 13 DEPARTMENT). THE REMAINING SUM OF RS.2 09 16 570 ( RS.3 65 62 625 MINUS 1 56 46 055) WAS CLAIMED AS DEDUCTION ON ACCOUNT OF BAD DEBTS. ON THE AFORESAID CLAIM MADE BY THE ASSESSEE BEFORE THE CIT (A) THE CIT(A) TOOK THE VIEW THAT THE EXPENSES WERE NOT ALLOWABLE AS TH E EXPENSES WERE INCURRED AGAINST INCOME PERTAINING TO EARLIER YEARS . THE CIT(A) ALSO OBSERVED THAT THE ISSUE WAS NOT RAISED BEFORE THE A O AND REJECTED THE CLAIM OF THE ASSESSEE. 15. ON FURTHER APPEAL BY THE ASSESSEE THE TRIBUNAL IN ITA NO.5355/MUM/2006 BY ITS ORDER DATED 29.04.2009 SET ASIDE THE ORDER OF THE CIT(A) AND DIRECTED THE AO TO EXAMINE THE CLAIM OF THE ASSESSEE AFRESH. 16. IN THE PROCEEDINGS BEFORE THE AO AFTER THE ORDE R OF THE TRIBUNAL THE ASSESSEE DID NOT FURNISH ANY EVIDENCE REGARDING THE DEBT CLAIMED TO BE WRITTEN OFF AS BAD. ON THIS ISSUE THE CIT(A) AGRE ED WITH THE AO AND HIS RELEVANT OBSERVATIONS WERE AS FOLLOWS:- 4.3 GROUNDS NO. 5 AND 6 : VIDE THESE GROUNDS THE APPELLANT CHALLENGES THE DE CISION OF THE AO NOT TO ALLOW THE ADDITIONAL CLAIM FOR BAD DEBTS AMOUNTING TO RS.2 09 15 560/-. THE ITAT BY ITS ORDER DT. 29.4.20 09 HAD REMANDED THIS ISSUE TO THE AO TO REEXAMINE THE CLAI M SINCE THE APPELLANT HAD STATED THAT THIS AMOUNT REPRESENTS TH E BALANCE OUT OF A TOTAL AMOUNT OF RS.3 65 62 625/- AFTER ALLOWING F OR RS.1 56 46 055/- ALREADY INCLUDED IN THE CLAIM OF R S. 1 90 22 677/- COVERED IN GROUND NO. 4 ABOVE. HOWEVE R IN THIS REGARD THE AO AFTER ENQUIRY HOLDS THAT BOTH THE E XISTENCE OF THE DEBTS AND THAT OF THE BAD DEBTS WERE NOT PROVED BY THE ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 10 OF 13 APPELLANT BEFORE HIM. THOUGH THE APPELLANT OBJECTS TO THIS BY STATING IN THE GROUNDS THAT THE AO REJECTED THE CLA IM ON SPECIOUS GROUNDS NO FURTHER CLARIFICATION IS GIVEN IN COUR SE OF THE APPELLATE PROCEEDING WITH REFERENCE TO THIS CLAIM. THIS IS SO EVEN THOUGH I FIND FROM THE ITAT ORDER THAT THIS GROUND WAS NOT RAISED IN THE ORIGINAL APPEAL AT ALL BUT WAS SOUGHT TO BE INTRODUCED AT THE FIRST APPELLATE STAGE DURING THE FIRST ROUND. THE I TAT SENT THE MATTER BACK TO THE AO FOR VERIFICATION AND THE AO IN THE ORDER HAS GIVEN A FACTUAL FINDING THAT THE DEBTS REMAINED UNEXPLAINED BY THE APPELLANT. THAT BEING SO IT WAS INCUMBENT U PON THE APPELLANT TO HAVE PROVIDED THE DETAILED EXPLANATION AT THE APPELLATE STAGE HAVING BEEN GIVEN ANOTHER OPPORTUN ITY TO DO SO. I HAVE TO NOTE THAT THIS OPPORTUNITY WAS NOT TAKEN BY THE APPELLANT THOUGH THREE APPELLATE HEARINGS WERE GRANTED IN ORD ER TO DEFEND THE GROUNDS RAISED IN APPEAL. SIMPLY RAISING A GROU ND AND ASSUMING THAT IT REQUIRES NO EXPLANATORY SUPPORT OR DETAILS IS NOT A REASONABLE DEFENCE OF THE SAME. HENCE IN THESE CI RCUMSTANCES I SEE NO REASON TO INTERFERE WITH THE ORDER OF THE AO ON THESE GROUNDS AND THEY ARE ACCORDINGLY DISMISSED. 4.4 GROUNDS NO.7-9 : THESE GROUNDS CARRY THE APPELLANTS OBJECTION TO TH E LEVY OF INTEREST U/S 234D BY THE AO. IN THIS CONNECTION IT MAY BE STATED THAT CHARGING OF INTEREST U/S 234D IS MANDATORY & A CCORDINGLY CHARGEABLE WHEREVER THERE IS INCIDENCE OF THE SAME. THEREFORE NO APPEAL CAN LIE AGAINST THE ORDER CHARGING INTEREST U/S IF THERE IS INCIDENCE UNLESS IT CONCERNS A PERCEIVED AND APPAR ENT MISAPPLICATION OF MIND. THE APPELLANT HAS NOT POINT ED OUT ANY SUCH CIRCUMSTANCE IN HIS GROUNDS. THE AO IS ACCORDI NGLY DIRECTED TO LEVY THE INTEREST APPLICABLE AS PER LAW AFTER TA KING INTO CONSIDERATION THE FINDINGS OF THIS APPELLATE ORDER. ACCORDINGLY THIS GROUND OF APPEAL IS NOT ADJUDICATED UPON. 17. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS) THE ASSESSEE HAS FILED THE APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWIN G GROUNDS: 1. THAT THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS AGAINST THE LAW FACTS CI RCUMSTANCES NATURAL JUSTICE EQUITY WITHOUT JURISDICTION BAD IN LAW AND ALL OTHER KNOWN PRINCIPLES OF LAW. ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 11 OF 13 2. THAT THE TOTAL INCOME AND TOTAL TAX LIABILITY C OMPUTED IS HEREBY DISPUTED. 3. THAT THE AUTHORITIES BELOW HAVE NOT APPRECIATED THE ENTIRE ISSUE IN THE RIGHT PERSPECTIVE AND THE FINDINGS ARE TOTALLY AGAINST THE FACTS ON RECORD. 4. THE AUTHORITIES BELOW ERRED IN NOT ALLOWING WRI TE OFF DEBTS AMOUNTING TO RS.2 09 15 560/-. 5. THE APPELLANT DENIES THE LIABILITY FOR INTEREST U/S 234D. FURTHER PRAYS THAT THE INTEREST IF ANY SHOULD BE LE VIED ONLY ON RETURNED INCOME. 6. NO OPPORTUNITY HAS BEEN GIVEN BEFORE LEVY OF IN TEREST U/S 234D OF THE I T ACT. 7. WITHOUT PREJUDICE TO THE APPELLANTS RIGHT OF S EEKING WAIVER BEFORE APPROPRIATE AUTHORITY THE APPELLANT BEGS FOR CONSEQUENTIAL RELIEF IN THE LEVY OF INTEREST UNDER SECTIONS 234D OF THE ACT. 8. FOR THE ABOVE AND OTHER GROUNDS AND REASONS WHI CH MAY BE SUBMITTED DURING THE COURSE OF HEARING OF THIS A PPEAL THE ASSESSEE REQUESTS THAT THE APPEAL BE ALLOWED AS PRA YED AND JUSTICE BE RENDERED. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE FILED BEFORE US A COPY OF THE LETTER DATED 03.03.2006 FILED BEFORE THE AO IN THE PROCEEDINGS U/S. 143(3) OF THE ACT. ANNEXURES TO THIS LETTER WERE ALSO FILED BEFORE US. WE OBSERVE THAT THIS LE TTER WAS FILED BEFORE THE AO PRIOR TO HIS PASSING THE FIRST ORDER OF ASSESSME NT U/S. 143(3) OF THE ACT DATED 07.03.2006. WE HAVE ALSO SEEN THAT IN RESPEC T OF BAD DEBT OF RS.2 09 15 560 THE ASSESSEE DID NOT MAKE A CLAIM F OR DEDUCTION ORIGINALLY BEFORE THE AO AND CLAIMED THE SAME FOR THE FIRST TI ME BEFORE THE CIT(A) IN THE FIRST ROUND. THEREFORE THIS LETTER IN OUR VI EW IS OF NO RELEVANCE ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 12 OF 13 WHATSOEVER TO THE CLAIM OF DEDUCTION ON ACCOUNT OF BAD DEBTS OF RS.2 09 15 560. THE LD. COUNSEL FOR THE ASSESSEE D REW OUR ATTENTION TO THE BAD DEBTS WRITTEN OFF ACCOUNT ENCLOSED WITH THIS LE TTER WHEREIN A SUM OF RS.2 07 36 784 IS WRITTEN OFF AS BAD DEBTS. THE AM OUNT SO WRITTEN OFF PERTAINS TO TWO AMOUNTS DUE TO SWASTIC ENTERPRISES AND MOUNT SHIVALIK. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT EXPLAIN THE DISCREPANCIES IN THE FIGURES OF BAD DEBTS CLAIMED IN THE GROUNDS OF APPE AL AND THESE BAD DEBTS ACCOUNT FILED BEFORE US (WHICH WAS ORIGINALLY FILED BEFORE AO IN THE FIRST ROUND OF ASSESSMENT PROCEEDING U/S.143(3) OF THE AC T). WE ARE OF THE VIEW THAT EVEN BEFORE THE TRIBUNAL THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO SUBSTANTIATE ITS CLAIM FOR DEDUCTION ON ACCOUNT OF BAD DEBTS AMOUNTING TO RS.2 09 15 560. IN THIS REGARD WE FIND THE OBSERV ATIONS OF THE CIT(A) ARE CORRECT AND DO NOT CALL FOR ANY INTERFERENCE. CONS EQUENTLY THE APPEAL BY THE ASSESSEE IS DISMISSED. 19. IN THE RESULT BOTH THE APPEALS BY THE ASSESSEE AND THE REVENUE ARE DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF OCTOBER 2013. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE DATED THE 4 TH OCTOBER 2013. /D S/ ITA NOS.825/BANG/2012 & 553/BANG/2013 PAGE 13 OF 13 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.