SONPANKHI SHARES AND SECURITIES P. LTD, MUMBAI v. ITO 4(2)(2), MUMBAI

ITA 6223/MUM/2010 | 2006-2007
Pronouncement Date: 18-11-2011 | Result: Allowed

Appeal Details

RSA Number 622319914 RSA 2010
Assessee PAN AAFCS0822E
Bench Mumbai
Appeal Number ITA 6223/MUM/2010
Duration Of Justice 1 year(s) 3 month(s) 1 day(s)
Appellant SONPANKHI SHARES AND SECURITIES P. LTD, MUMBAI
Respondent ITO 4(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 18-11-2011
Date Of Final Hearing 09-11-2011
Next Hearing Date 09-11-2011
Assessment Year 2006-2007
Appeal Filed On 16-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI B.R. MITTAL (JUDICIAL MEMBER) AND SHRI T.R. SOOD (ACCOUNTANT MEMBER) ITA NO. 6223/MUM/2010 ASSESSMENT YEAR-2006-07 M/S. SONPANKHI SHARES & SECURITIES PVT. LTD. 12 REYFREDA SIR M.V. MARG CHAKALA ANDHERI(E) MUMBAI-400 093 PAN-AAFCS0822E VS. THE ITO 4(2)(2) AAYAKAR BHAVAN MUMBAI-400 020 (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI ALEXANDER CHANDY DATE OF HEARING :9.11.2011 DATE OF PRONOUNCEMENT: 18.11.2011 O R D E R PER B.R. MITTAL JM : THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT Y EAR 2006-07 AGAINST ORDER OF LD. CIT(A) DT.10.5.2010 ON FOLLOWING GROUN D: THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-8 ERR ED IN CONFIRMING DISALLOWANCE YOUR APPELLANTS CLAIM FOR BAD DEBT OF RS. 2 93 315/-.YOUR APPELLANT SUBMIT THAT THE WRITE OFF OF BAD DEBT BY YOUR APPELLANT IS IN ACCORDANCE WITH THE RE QUIREMENT OF SEC. 36 OF I.T. ACT 1961 AND PRAY A.O. BE DIRECTED TO ALLOW THE SAME AS CLAIMED BY YOUR APPELLANT. 2. NONE APPEARED ON BEHALF OF ASSESSEE INSPITE OF N OTICE BY REGD. POST. HOWEVER CONSIDERING THE MATERIAL PLACED ON RECORD AND ISSUE INVOLVED WE ITA NO.6223/M/2010 2 HAVE HEAD LD. DEPARTMENTAL REPRESENTATIVE AND DISPO SED OFF THIS APPEAL EX- PARTE. 3. WE OBSERVE THAT ASSESSEE CLAIMED BAD DEBT AGGREG ATING TO RS. 2 93 315/- AND SAME WERE WRITTEN OFF IN ASSESSMENT YEAR UNDER CONSIDERATION. IT IS OBSERVED THAT IT COMPRISES OF T WO AMOUNTS OF RS. 85 239/- OUTSTANDING IN THE NAME OF DEEPAK MAROLIA AND A SUM OF RS. 2 08 076/- WAS ON ACCOUNT OF MARGIN MONEY DUE FROM RAKESH BHARGAVA. THE ASSESSING OFFICER DID NOT ALLOW THE SAME ON THE GROUND THAT ASSESSEE HAS MADE ATTEMPT TO RECOVER SAID AMOUNT. IT IS FUR THER STATED THAT A SUM OF RS. 85 239/- WAS WRITTEN BACK IN NEXT ASSESSMENT YE AR AS THE SAME WAS RECOVERED. HE FURTHER STATED THAT IN RESPECT OF AM OUNT OF RS. 2 08 076/- ASSESSEE HAS FILED A SUIT AND THE MATTER IS UNDER D ISPUTE. THE LD. CIT(A) ALSO CONFIRMED THE ACTION OF AO. HENCE ASSESSEE IS IN FURTHER APPEAL BEFORE TRIBUNAL. 4. AT THE TIME OF HEARING LD. DEPARTMENTAL REPRESE NTATIVE SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT SAID AMOUNT THOUGH WRITTEN OFF BY ASSESSEE IN ITS BOOKS OF ACCOUNT BUT IT HAS NOT BECOME BAD DEBT BECAUSE ASSESSEE WAS TAKING STEPS TO RECOVER BY FIL ING THE SUIT AND/OR A PART OF AMOUNT RECOVERED IN NEXT ASSESSMENT YEAR. HOWEV ER WE DO NOT FIND ANY SUBSTANCE IN THE SUBMISSION OF LD. DR AS AFTER THE AMENDMENT WITH EFFECT FROM 1 ST APRIL 1989 IT IS NOT OBLIGATORY ON BEHALF OF ASSE SSEE TO PROVE THAT DEBT WRITTEN OFF IS INDEED A BAD DEBT FOR PURPOSES OF CLAIMING DEDUCTION U/S. 36(1)(VII) OF THE ACT. THE ABOVE ISSUE HAS BEEN CO NSIDERED BY SPECIAL BENCH OF ITAT IN THE CASE OF DCIT VS OMAN INTERNATIONAL BA NK (SAOG) 100 ITD 205 (SB). THE HONBLE BOMBAY HIGH COURT HAS ALSO H ELD IN THE CASE OF COMMISSIONER OF INCOME-TAX VS STAR CHEMICALS (BOMBAY ) P. LTD. (BOM) 11 DTR (BOM) 311 313 ITR 126 THAT IF ASSESSEE HAS WRITTEN OFF THE DEBT AS A BAD DEBT THAT WOULD SATISFY THE PURPOSE OF THE A CT TO ENABLE ASSESSEE TO CLAIM DEBT AS BAD DEBT. IN VIEW OF ABOVE WE SET A SIDE THE ORDERS OF AUTHORITIES BELOW BY ALLOWING THE GROUND OF APPEAL TAKEN BY ASSESSEE. ITA NO.6223/M/2010 3 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 18 TH DAY OF NOVEMBER 2011 SD/- SD/- ( T.R. SOOD) (B.R. MITTAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 18 TH NOVEMBER 2011 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI ITA NO.6223/M/2010 4 DATE INITIALS 1. DRAFT DICTATED ON: 9.11.2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 14.11.2011 SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/PS 6. ORDER PRONOUNCED ON: SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: SR. PS/PS 9. DATE ON WHICH FILE GOES TO AR 10. DATE OF DISPATCH OF ORDER: