Robinson Impex (I) Pvt.Ltd.,, Ahmedabad v. The Income tax officer, Ward-5(3),, Ahmedabad

ITA 997/AHD/2012 | 1996-1997
Pronouncement Date: 31-10-2013 | Result: Allowed

Appeal Details

RSA Number 99720514 RSA 2012
Assessee PAN AABCR6814P
Bench Ahmedabad
Appeal Number ITA 997/AHD/2012
Duration Of Justice 1 year(s) 5 month(s) 23 day(s)
Appellant Robinson Impex (I) Pvt.Ltd.,, Ahmedabad
Respondent The Income tax officer, Ward-5(3),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-10-2013
Date Of Final Hearing 23-10-2013
Next Hearing Date 23-10-2013
Assessment Year 1996-1997
Appeal Filed On 08-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI T.R. MEENA ACCOUNTANT MEMBER ITA NO.1369/AHD/2010 AND 997/AHD/2012 A.YS. 1996-97 ROBINSON IMPEX (INDIA) LTD. (NOW KNOW AS ROBINSON WORLDWIDE TRADE LTD.) IST FLOOR OM COMPLEX C.G. ROAD NAVRANGPURA AHMEDABAD. PAN: AABCR6814P VS INCOME TAX OFFICER WARD 5(3) AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI O.P. BATHEJA SR.D.R. ASSESSEE(S) BY : SHRI S.N. SOPARKAR A.R. / DATE OF HEARING : 23/10/2013 / DATE OF PRONOUNCEMENT: 31/10/2013 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER THESE TWO APPEALS PERTAIN TO THE SAME ASSESSEE HEN CE CONSOLIDATED AND HEREBY DECIDED BY THIS COMMON ORDER. A. ITA NO.1369/AHD/2010 (FOR A.Y. 1996-97) 2. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE EMANA TING FROM AN ORDER OF LEARNED CIT(A)-XI AHMEDABAD DATED 18.02.2010 A ND THE GROUNDS RAISED ARE REPRODUCED BELOW: 1. LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE DISALLOWANCE OF CLAIM OF BAD DEBT AMOUNTING TO RS. 2 70 22 276/ MADE BY AO SINCE THE APPELLANT HAD ONLY MADE THE PROVISION FOR BAD DEBTS AND NOT ACTUALLY WRITTEN OFF THE SAME AS IRRECOVERABLE. LD. CIT (A) HAS FURTHER ERRED IN NOT GRANTING THE ALTERNATE CLAIM OF THE APPELLAN T TO ALLOW THE SAME AS ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 2 - TRADING/BUSINESS LOSS U/S 28 OF THE ACT. THE DISALL OWANCE OF THE CLAIM BEING WITHOUT ANY MERITS OR JUSTIFICATION REQUIRES TO BE GRANTED AS BUSINESS LOSS AND THE ORDER OF CIT (A) OUGHT TO BE QUASHED. 2. LEARNED CIT (A) ERRED IN NOT APPRECIATING THE FA CT THAT THE HON'BLE ITAT IN PARA 4 OF THE ORDER AFTER CONSIDERING THE CONTENTIO N OF THE ID. A.R. OF THE APPELLANT ISSUED DIRECTIONS THAT EVEN IF THE CLAIM OF GRANT OF DEDUCTION IN RESPECT OF THE BAD DEBTS IS NOT ADMISSIBLE THE SAME SHALL BE STILL DEDUCTIBLE AS TRADING LOSS. LD. CIT (A) IN COMPLETE DISREGARD OF THE DIRECTION OF THE HON'BLE ITAT HAS HELD THE CLAIM OF THE APPELLANT TO TREAT T HE IMPUGNED AMOUNT AS TRADING LOSS TO BE BEYOND THE MANDATE GIVEN IN THE ORDER OF THE HON'BLE ITAT. THIS ACTION OF ID. CIT (A) BEING HIGHLY IMPROPER DE SERVES TO BE QUASHED. 3. LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN DISALLOWING THE CLAIM ALSO ON MERITS IGNORING THE SUBMISSIONS OF THE APPELLANT THAT THE AMOUNT DISALLOWED BEING IRRECOVERABLE EXPORT SALE PROCEEDS WAS INCIDENTAL TO THE CARRYING ON OF THE BUSINESS OF THE APPELLANT THAT D ESERVED TO BE ALLOWED UNDER THE PROVISIONS OF SECTION 28 OF THE ACT AS BUSINESS/TRADING LOSS. 4. LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN NOT GRANTING DEDUCTION ON DISALLOWANCE OF THE CLAIM OF BAD DEBT/ BUSINESS LOSS U/S 80HHC O F THE ACT THAT CLEARLY AFFECTED THE BUSINESS PROFIT S OF THE APPELLANT. BOTH THE LOWER AUTHORITIES IN COM PLETE DISREGARD OF THE DIRECTION OF THE HON'BLE ITAT MISINTERPRETED THE EX PLANATION (BAA) GIVEN AFTER SECTION 80HHC BY NOT GRANTING DEDUCTION ON EN HANCED BUSINESS PROFITS OF THE APPELLANT. LD. CIT (A) OUGHT TO HAVE GRANTED ENHANCED DEDUCTION U/S 80HHC WHEN THE ADDITION ON ACCOUNT OF DISALLOWANCE OF CLAIM OF BAD DEBT/ BUSINESS LOSS RESULTED IN HIGHER BUSINESS PROFITS. 3. THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED U/ S. 143(3) R.W.S. 144 AND 254 OF IT ACT DATED 30 TH OF NOVEMBER 2007. THE AO HAS MENTIONED THE BACKGROUND OF THE CASE THAT THERE WAS AN ASSESSMENT ORDER U/S. 143(3) DATED 23.3.1999 WHICH WAS ORIGINALLY P ASSED BY DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.2 61 89 260/ - AGAINST THE NIL RETURNED INCOME. AT THE TIME OF ORIGINAL ASSESSMENT THREE MAJOR ADDITIONS WERE MADE AS FOLLOWS: I) BAD DEBTS CLAIMED RS. 2 70 22 278/- II) SALES NOT RECORDED IN THE BOOKS RS. 13 75 92 1/- III) UNEXPLAINED INVESTMENT RS. 3 29 450/-. ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 3 - 3.1 THE MATTER REACHED BEFORE LEARNED CIT(A) WHO HA S GRANTED RELIEF TO THE ASSESSEE WHICH WAS CHALLENGED BY THE REVENU E DEPARTMENT. WHEN THE MATTER REACHED UPTO THE TRIBUNAL THEN ITAT C BENCH AHMEDABAD IN ITA NO.1429/AHD/2010 A.Y. 1996-97 TITLED AS D CIT AHMEDABAD V/S. ROBINSON IMPEX (INDIA) AHMEDABAD DATED 21.07. 2006 RESTORED THE ISSUED TO THE FILE OF THE AO AS PER FOLLOWING DIRE CTIONS: IN THE CASE BEFORE US THE ASSESSEE DID NOT HAVE OP PORTUNITY TO PLACE THE SUBMISSIONS AND EVIDENCE TO ESTABLISH HIS CLAIM FOR DEDUCTION IN RESPECT OF EXPLANATION U/S. 36(1)(VII)(I) AS IT WAS INSERTED B Y FINANCE ACT 2001. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AS WEL L AS THAT OF THE ASSSESSING OFFICER AND RESTORE THE MATTER BACK TO T HE FILE OF THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE AFRES H IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. WE ALSO DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE DEDU CTION U/S. 80HHC IN ACCORDANCE WITH LAW. IF THE ASSESSEE IS NOT ALLOWED DEDUCTION U/S. 80HHC IN RESPECT OF BAD DEBTS IN VIEW OF EXPLANATION GIVEN U /S. 36(1)(VII) AS WE AGREE WITH THE CONTENTION OF THE LD. AR THAT DISALLOWANCE OF THE BAD DEBTS WILL AFFECT THE BUSINESS PROFIT TO BE COMPUTED IN ACCORDANCE WI TH EXPLANATION (BAA) GIVEN AFTER SECTION 80HHC. THUS THIS GROUND IS ALLO WED FOR STATISTICAL PURPOSES 3.2 IN CONSEQUENCE THEREUPON THE AO HAS ASKED THE ASSE SSEE TO ESTABLISH THE CLAIM OF DEDUCTION IN THE LIGHT OF TH E EXPLANATION TO SECTION 36(1)(VII) OF IT ACT. ACCORDING TO AO AS PER THE EXPLANATION ANY BAD DEBT WRITTEN OFF OR IRRECOVERABLE IN THE AC COUNTS OF THE ASSESSEE IS NOT BE ALLOWED IF A PROVISION HAS BEEN MADE IN RESPECT OF THE BAD OR DOUBTFUL DEBT. THE AO HAS GIVEN A FINDING THAT ON P ERUSAL OF P& L ACCOUNT AND BALANCE- SHEET OF THE ASSESSEE ENDING O N 31 ST MARCH 1996 IT WAS FOUND THAT THE ASSESSEE HAD DEBITED AN AMOUN T OF RS.2 70 22 276/- AS A BAD DEBT RESERVE WHICH WAS CREDITED BY WAY OF MAKING A PROVISION IN THE BALANCE SHEET AS BAD DEBT RESERVE. ACCORDING TO AO BY MAKING A PROVISION THE ASSESSEE HAS A POSSIBILITY OR A RAY OF HOPE OF THE RECOVERY OF THE DEBTS. THOSE DEBTS WERE NOT WRITTEN OFF AS B AD DEBTS IN THE BOOKS ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 4 - OF ACCOUNT. THEREFORE AS PER AO THE ASSESSEE HAD NOT ESTABLISHED THAT ALL THOSE DEBTS HAVE BECOME FINALLY A BAD DEBT SO I RRECOVERABLE. IN THE RESULT THE CLAIM OF DEDUCTION OF BAD DEBT U/S. 36( 1)(VII) WAS DISALLOWED. IN RESPECT OF ALTERNATE PLEA COMPUTATION OF DEDUCTI ON U/S. 80HHC THE SAME WAS ALSO REJECTED BY HOLDING THAT THE DEDUCTIO N AS CALCULATED IN THE ORIGINAL ASSESSMENT OF RS.1 81 50 397/- WAS CORRECT LY COMPUTED. 4. SINCE THE AO HAS ONCE AGAIN DISALLOWED THE CLAI M OF BAD DEBTS OF RS.2 70 22 276/- AND SIMILARLY COMPUTED THE DEDUCTI ON U/S. 80HHC TO THE EXTENT OF RS.1 81 50 397/- AS IT WAS DONE IN T HE ORIGINAL ASSESSMENT THEREFORE AGAIN THE ASSESSEE PREFERRED AN APPEAL B EFORE LEARNED CIT(A). AS FAR AS THE ISSUE OF CLAIM OF BAD DEBT IS CONCERN ED VIDE PARAGRAPH 4 IT WAS NOTED BY LEARNED CIT(A) THAT THE FIRST ISSUE WA S ABOUT ALLOWABILITY OF BAD DEBTS TO BE VIEWED IN THE LIGHT OF THE EXPLA NATION TO THE SECTION 36(1)(VII) ACCORDING TO WHICH A BAD DEBT WRITTEN O FF SHALL NOT INCLUDE ANY PROVISION FOR BAD AND DOUBTFUL DEBT. S INCE THE ACCEPTED FACTUAL POSITION ACCORDING TO LEARNED CIT(A) WAS THAT THE A SSESSEE COMPANY HAD MADE THE PROVISION FOR THE BAD DEBTS IN THE P & L A/C THEREFORE IN THE LIGHT OF THE PROVISIONS OF THE ACT THE SAME WAS NO T ALLOWABLE. RATHER LEARNED CIT(A) HAS MENTIONED THAT QUOTE IN OTHER WORDS LD AR FAIRLY CONCEDED THAT IN VIEW OF THE EXPLANATION THE APPELL ANT IS NOT ENTITLED TO DEDUCTION U/S 36(1)(VII). THEREFORE I UPHOLD TH E A.O.S FINDING THAT THE APPELLANTS CLAIM U/S 36(1)(VII) IS NOT AL LOWABLE IN ACCORDANCE WITH THE PROVISIONS OF LAW. UNQUOTE. 4.1) AN ALTERNATIVE PLEA WAS THEREFORE RAISED BY THE ASSESSEE THAT THE AMOUNT IN QUESTION WAS IN THE NATURE OF IRRECOV ERABLE EXPORT SALE PROCEEDS SO THE IMPUGNED AMOUNT SHOULD BE ALLOWED A S A TRADING LOSS. ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 5 - THE ASSESSEE HAS REFERRED RAMCHANDRA SHIVNARAYAN 111 ITR 263 (SC) FOR THE LEGAL PROPOSITION THAT DURING THE COURSE O F BUSINESS OPERATION THE AMOUNT BECAME IRRECOVERABLE THEREFORE AS PER COMMERCIAL STANDARDS IT WAS A TRADING LOSS. HENCE IT WAS PLEADED THAT O N COMMERCIAL PRINCIPLES THE LOSS MAY BE TREATED AS A BUSINESS LOSS AS IT WA S HELD IN THE CASE OF SNASA ANNAMALI CHAITAIRH 86 ITR 607 (SC). FEW OTHER CASE LAWS IN SUPPORT OF THE ALTERNATIVE CLAIM OF TRADING LOSS WE RE CITED. IN THIS REGARD THE OBSERVATION OF LEARNED CIT(A) WAS THAT THE FORE MOST ISSUE FOR CONSIDERATION IS WHETHER THE MANDATE OF THE ORDER O F THE TRIBUNAL DATED 21.07.2006 HAD PERMITTED THE ADJUDICATION OF CLAIM OF TRADING LOSS. THE TRIBUNAL HAS NOT GIVEN ANY FINDING ON THE SAID ISSU E AND THE DIRECTION WAS TO RECONSIDER THE ISSUE OF DEDUCTION OF BAD DEBT IN THE LIGHT OF EXPLANATION TO SECTION 36(1)(VII) OF IT ACT. THEREF ORE IT WAS CONCLUDED BY LEARNED CIT(A) THAT HE WAS OF THE CONSIDERED OPI NION THAT THE IMPUGNED ALTERNATE PLEA OF CONSIDERING THE BAD DEBT AS TRADING LOSS WAS BEYOND THE MANDATE GIVEN BY THE TRIBUNAL. FOR THIS LEGAL PROPOSITION RELIANCE WAS PLACED ON INDIAN STEEL AND WIRE PRODUCTS 208 ITR 740 (KOL) AND MAHINDRA & CO. 269 ITR 426 (RAJ.). ACCORDING TO LEARNED CIT(A) IN THOSE DECISIONS IT WAS HELD THAT IF A MAT TER HAS BEEN REMANDED WITH SPECIFIC DIRECTION TO RE-COMPUTE THEN THE AO IS NOT JUSTIFIED IN ADJUDICATING UPON THE ISSUE OTHER THAN THE ISSUE RE STORED BACK. RELIANCE WAS ALSO PLACED ON A DECISION OF STATE BANK OF INDORE 29 ITR 459 (MP) WHEREIN IT WAS HELD THAT THE LOWER AUTHORITIES HAV E NO JURISDICTION TO PASS ANY ORDER CONTRARY TO THE DIRECTIONS GIVEN BY THE TRIBUNAL. IN SPITE OF FACT THAT LEARNED CIT(A) HAD HELD THAT THE ALTER NATE PLEA WAS BEYOND THE PURVIEW OF THE APPELLATE PROCEEDINGS HE HAD AL SO DISCUSSED THE MERITS OF THE ISSUE IN THE FOLLOWING MANNER: ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 6 - 6.2 AS REGARDS THE CLAIM OF THE APPELLANT FO R ALLOWING IMPUGNED AMOUNT AS TRADING LOSS U/S. 28 THE FIRST AND FOREM OST ISSUE FOR CONSIDERATION IS WHETHER THE MANDATE OF THE TRIBUNALS ORDER DATE D 21/7/06 (ON THE STRENGTH OF WHICH THE IMPUGNED ORDER WAS PASSED BY THE AO) P ERMITS THE ADJUDICATION OF THIS CLAIM. AS SEEN FROM THE OBSERVATIONS/DIRECT IONS OF THE ITAT REPRODUCED AT PAGE NO.2 OF THIS ORDER THE ONLY ISS UES FOR CONSIDERATION ARE (I) WHETHER THE APPELLANT IS ENTITLED TO DEDUCTION OF BAD DEBTS IN VIEW OF EXPLANATION U/S. 36(L)(VII)(I) AND (II) WHETHER THE APPELLANT IS ENTITLED TO HIGHER DEDUCTION U/S. 80HHC. ON BOTH THE COUNTS I CAME TO THE FINDING THAT THE CASE OF APPELLANT FAILS WHICH WAS CONCEDED BY THE LEARNED A.RS. THE ARGUMENT TAKEN BY THE LD. A.RS IS THAT AS SEEN FROM PARA 4 OF THE TRIBUNAL'S ORDER IT WAS CONTENDED BEFORE THE TRIBUNAL THAT EVE N IF THE AMOUNT IN QUESTION IS NOT ADMISSIBLE UNDER THE BAD DEBTS IT IS STILL D EDUCTIBLE AS TRADING LOSS AND THEREFORE THIS ALTERNATE CLAIM CALLS FOR ADJUDICATI ON. IN THIS CONNECTION IT IS SEEN THAT SUCH A CONTENTION WAS RAISED BY THE A.R B EFORE THE TRIBUNAL. HOWEVER THE TRIBUNAL DID NOT GIVE ANY FINDING ON T HIS ISSUE NOR WAS ANY DIRECTION GIVEN TO THE A.O. (TO WHOM THE MATTER WAS RESTORED) TO CONSIDER THE SAME. FURTHER IN THE ASSESSMENT PROCEEDINGS CONSEQU ENT TO THE TRIBUNAL'S ORDER NO SUCH PLEA WAS TAKEN AND THEREFORE THE AS SESSMENT ORDER DOES NOT CONTAIN ANY DISCUSSION WHAT SO EVER ON THIS ISSUE IN VIEW OF THE FOREGOING DISCUSSION I AM OF THE CONSIDERED OPINION THAT THE APPELLANT'S CLAIM FOR TREATING THE IMPUGNED AMOUNT AS TRADING LOSS IS BEY OND THE MANDATE GIVEN BY THE TRIBUNAL. . 7. SINCE THE ASSESSMENT YEAR UNDER CONSIDERATI ON IS ASSESSMENT YEAR 1996- 97 AND THIS IS THE SECOND ROUND OF THE APPELLANT PR OCEEDINGS I DEEM IT WORTHWHILE TO GO INTO THE MERITS OF THE APPELLANT'S CLAIM INSPITE OF MY ABOVE FINDING THAT THIS ISSUE IS BEYOND THE PURVIEW OF TH E PRESENT APPELLATE PROCEEDINGS. IN THE INSTANCE CASE THE APPELLANT MA DE A PROVISION FOR BAD AND DOUBTFUL DEBTS. THE DEBTS WERE NOT ACTUALLY WRITTEN OFF DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 1996-97; THE LD AR COULD NOT FURNISH ANY DETAILS REGARDING THE ACTUAL WRITE OFF OF DEBTS IN ANY SUBSEQUENT YEAR AND ALSO WHETHER THE CLAIM FOR ALLOWANCE OF BAD DEBTS WAS MA DE ON THE STRENGTH OF SUCH WRITE OFF IN SUCH SUBSEQUENT ASSESSMENT YEAR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 143(3) R.W.S.250 NOBODY APPEARED O N BEHALF OF THE APPELLANT AND NO SUCH ALTERNATE CLAIM FOR ALLOW ING THE IMPUGNED AMOUNT AS TRADING LOSS WAS MADE. ANY CLAIM U/S. 28 CAN BE MADE PROVIDED SUCH A CLAIM IS NOT FALLING U/S.30 TO 36 OF THE LT. ACT. I N THE INSTANT CASE THE APPELLANT IN FACT MADE THE CLAIM U/S. 36(L)(VII) A ND HAVING FAILED THERE THE APPELLANT CANNOT TAKE RECOURSE TO SECTION 28. RELIA NCE IS PLACED IN THIS REGARD IN THE CASE OF CIT VS. CARBORUNDUM UNIVERSAL LTD. 110 ITR 621 (MAD.) WHEREIN IT WAS HELD. ' IN THIS PARTICULAR CASE AS WE HAVE POINTED OUT ALR EADY THERE CAN BE NO DISPUTE ABOUT THE FACT THAT THE NATURE OF PAYMEN T IS ONE AS DESCRIBED IN S.36(1)(IV) BY THE SAID PAYMENT CANNOT BE DEDUCTED UNDER SECTION 36(1)(IV) BECAUSE IT IS NOT A CONTRIBUTION TO AN APPROVED SUPERANNUATION FUND. IN VIEW OF THIS POSITION IT CA NNOT BE HELD THOUGH ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 7 - THE PAYMENT IS NOT DEDUCTIBLE UNDER SECTION 36(1)(I V) STILL IT CAN BE DEDUCTED UNDER SECTION 28 ON THE GENERAL PRINCIPLE OF ARRIVING AT THE TRUE PROFITS AND GAINS OF THE BUSINESS IN A COMMERC IAL SENSE THERE IS AN IMPLIED PROHIBITION IN THE ACT ITSELF FOR DEDUCT ING THE AMOUNT FALLING WITHIN THE SCOPE OF SECTION 36(1)(IV) IF T HE CONDITIONS MENTIONED THEREIN ARE NOT SATISFIED. TO HOLD OTHERW ISE WILL HAVE THE EFFECT OF RENDERING THE SPECIFIC PROVISIONS CONTAIN ED IN THE ACT NUGATORY AND TO ALLOW THE ASSESSEE TO CIRCUMVENT TH E PROVISIONS OF THE ACT AND THEREBY MAKING THOSE PROVISIONS A DEAD LETT ER. THEREFORE ONCE A PAYMENT IS OF THE NATURE EXPRESSLY DEALT WITH IN THE PARTICULAR PROVISION OF THE STATUTE BUT DOES NOT QUALIFY FOR DEDUCTION SINCE IT DOES NOT FULFIL THE CONDITIONS PRESCRIBED IN THAT P ARTICULAR STATUTORY PROVISION THE SAID PAYMENT CANNOT BE ALLOWED TO BE DEDUCTED ON THE GENERAL PRINCIPLE OF ASCERTAINING THE PROFITS AND G AINS OF BUSINESS COMMERCIALLY. 5. FROM THE SIDE OF THE APPELLANT LEARNED AR M R. S.N. SOPARKAR APPEARED AND PLEADED THAT THE ALTERNATE CLAIM OF TR ADING LOSS WAS NOT ADJUDICATED UPON BY THE AUTHORITIES BELOW; THOUGH THE SAID CLAIM WAS MADE BEFORE THE TRIBUNAL THEREFORE NOW IT WAS REQ UESTED THAT THE CLAIM OF TRADING LOSS DESERVES TO BE CONSIDERED. HE HAS R AISED TWO FOLDS OF ARGUMENT FIRST THAT A BAD DEBT IS REQUIRED TO BE A LLOWED IF IT IS WRITTEN OFF BY DEBTING THE P & L A/C. AS PER THE PROVISIONS OF LAW. SECOND THAT IF THIS PLEA IS NOT ACCEPTABLE THEN THE SAME IS REQUIRED TO BE ALLOWED AS TRADING LOSS WHICH WAS NOT ADJUDICATED UPON BY THE LOWER AUTHORITIES. 6. FROM THE SIDE OF THE REVENUE LEARNED D.R. MR. O .P. BATHEJA APPEARED AND VEHEMENTLY OBJECTED THE ARGUMENT OF LE ARNED AR MAINLY ON THE GROUND THAT THE ISSUE OF TRADING LOSS WAS DU LY CONSIDERED BY LEARNED CIT(A) AND ON MERITS IT WAS DISALLOWED. IT IS NOT CORRECT ON THE PART OF LEARNED AR TO ARGUE THAT THE ALTERNATE CLAI M OF TRADING LOSS WAS NOT DULY CONSIDERED BY LEARNED CIT(A). LEARNED DR H AS THEREFORE ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 8 - PLEADED THAT BOTH THE ARGUMENTS ARE AGAINST THE FAC TS OF THE CASE HENCE DESERVES TO BE REJECTED. 7. HAVING HEARD THE SUBMISSIONS OF BOTH THE SI DES WE ARE OF THE CONSIDERED OPINION THAT EVEN IN THE SECOND ROUND OF APPEAL THE ASSESSEE HAS NOT IMPROVED HIS STAND IN RESPECT OF THE CLAIM OF BAD DEBT FOR WHICH UNDISPUTEDLY A PROVISION WAS MADE IN THE BOOKS OF ACCOUNT. RATHER IN ONE OF THE PARAGRAPH IT WAS NOTED BY LEARNED CIT(A ) THAT THE ASSESSEES REPRESENTATIVE HAD FAIRLY CONCEDED THAT IN VIEW OF THE EXPLANATION TO SECTION 36(1)(VII) THE PROVISION OF BAD AND DOUBTFU L DEBT SHOULD NOT BE ALLOWED. EVEN BEFORE US THE ARGUMENT OF LEARNED AR IS NOT THAT THERE WAS NO PROVISION FOR BAD AND DOUBTFUL DEBT MADE BY THE ASSESSEE. EVEN THE TRIBUNAL HAS RESTORED THE ISSUE BACK TO THE FIL E OF THE AO WITH THE DIRECTION TO CONSIDER THE LATEST AMENDED PROVISION OF THE ACT BECAUSE AN EXPLANATION WAS INSERTED BY FINANCE ACT 2001. IT I S WORTH TO MENTION THAT ONE THING IS CLEAR THAT THE DIRECTION OF THE T RIBUNAL WAS LIMITED TO THE APPLICATION OF THE EXPLANATION TO SECTION 36(1) OF IT ACT. SINCE THE AMENDED PROVISIONS ARE UNAMBIGUOUS THEREFORE THE ASSESSEE IS NOT ENTITLED FOR CLAIM OF BAD DEBT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS GROUND OF THE ASSESSEE IS DISMISSED. 7.1 AS FAR AS THE ALTERNATE CLAIM OF THE AS SESSEE THAT THE SAME IS TO BE ALLOWED AS A TRADING LOSS IS CONCERNED WE HAVE NOTED THAT THE LEARNED CIT(A) HAS COMMENTED THAT THE ASSESSEE WAS UNABLE TO FURNISH ANY DETAIL REGARDING THE ACTUAL PLIGHT OF THE DEBT. NO CLAIM WAS MADE THAT THE AMOUNT IN QUESTION WAS A TRADING LOSS. A CCORDING TO US ONCE A PARTICULAR CLAIM HAS BEEN EXPRESSLY DEALT WITH UNDE R A PARTICULAR PROVISION OF THE STATUTE THEN THE SAME SHOULD BE CO NSIDERED IN THE LIGHT OF ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 9 - THAT PROVISION OF THE STATUTE. IF THE SAID CLAIM DO NOT QUALIFY FOR DEDUCTION THEN THE ASSESSEE SHOULD BE SATISFIED WITH THE VERD ICT OF THE AUTHORITY. ALTHOUGH THERE IS NO LIMITATION THAT IF A CLAIM DO NOT FULFILL ONE CONDITION OF THE STATUTE THEN AN ALTERNATE PLEA CAN BE RAISED TO RESTORE THE CLAIM UNDER AN ANOTHER STATUTORY PROVISION. BUT FOR SUCH AN ALTERNATE ATTEMPT THE SAME SHOULD BE SUPPORTED BY SOME SPECIFIC CORRO BORATIVE EVIDENCES. IF A BAD DEBT CANNOT BE ALLOWED AS A DEDUCTION ON T HE GENERAL COMMERCIAL PRINCIPLES THEN HOW A TRADING LOSS COULD BE ALLOWE D SPECIALLY WHEN COULD NOT BE SUPPORTED BY SPECIFIC EVIDENCES. IF TH E ASSESSEE WANTED TO CLAIM BAD DEBT AS A TRADING LOSS THEN IT WAS ACCEPT ED TO PLACE ON RECORD THE SUPPORTING EVIDENCES. IT IS WORTH TO QUOTE AN O BSERVATION OF THE A.O. WHILE FRAMING THE ASSESSMENT THE A.O. EXAMINED THE ASSESSEES CLAIM AND ASKED THE ASSESSEE TO EXPLAIN THE REASONS FOR ITS CLAIM ALONG WITH ANY DOCUMENTARY EVIDENCE SUCH AS APPLICATION F OR EXTENTION FOR GETTING THE EXPORT PROCEEDS BACK TO THE OFFICE OF T HE CIT AND THE RELEVANT DOCUMENT WHICH SHOWS THAT THE PROCEEDS TO BE REALIZED HAD BECOME BAD AND ALSO WHETHER THE PERMISSION OF RBI H AS BEEN OBTAINED BEFORE DECLARING THE EXPORT PROCEEDS AS BAD DEBTS. THE ASSESSEE WAS ALSO ASKED TO PRODUCE DETAILS IN RESPECT OF STATUS OF THE DEBTOR WHETHER THE DEBTOR HAD BECOME BANKRUPT AND WAS NOT IN A POS ITION TO PAY. EVEN DURING THE FIRST ROUND OF PROCEEDINGS OR IN TH E SECOND ROUND OF APPELLATE PROCEEDINGS THE ASSESSEE HAS NOT GIVEN AN Y EVIDENCES IN SUPPORT OF THE CLAIM OF TRADING LOSS. THE CASE LAWS AS CI TED BY THE ASSESSEE ALSO DO NOT SUPPORT THE CLAIM OF BUSINESS LOSS IN THE AB SENCE OF ANY PROOF. WE THEREFORE HOLD THAT THE ASSESSEE IS NOT ENTITLED F OR SUCH CLAIM. THIS PART OF GROUND IS ALSO DISMISSED. ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 10 - 8. NOW WE ARE LEFT WITH THE CLAIM OF BAD DEBT VIZ-A -VIZ THE COMPUTATION OF THE DEDUCTION U/S. 80HHC OF IT ACT. THIS ISSUE HAS BEEN RAISED AS PER GROUND NO. 4 AS REPRODUCED ABOVE. AS FAR AS THE DIRECTION OF THE TRIBUNAL IN THE FIRST ROUND OF APPEAL WAS CONCE RNED THE RELEVANT PORTION OF THE SAID ORDER OF THE TRIBUNAL DATED 21 .07.2006 IS REPRODUCED ABOVE. THE TRIBUNAL HAS RESTORED THE ENTIRE ISSUE O F COMPUTATION OF DEDUCTION U/S.80HHC AS PER LAW. THE BUSINESS PROFIT WAS DIRECTED TO BE COMPUTED IN ACCORDANCE WITH SUB-SEC.(3) OF SECTION 80HHC OF IT ACT. THE AO HAS NOTED THAT AS PER THE ORIGINAL ASSESSMEN T COMPLETED U/S. 143(3) OF IT ACT THE DEDUCTION U/S.80HHC WAS ALLOW ED AT RS.1 81 50 397/-. THIS WAS THE CALCULATION WHICH WA S FURNISHED BY THE ASSESSEE ALONG WITH THE RETURN. ONLY A MINOR ARITHM ETICAL CORRECTION WAS MADE. SUBSEQUENTLY ON ACCOUNT OF AN ASSESSMENT MAD E U/S. 143(3) R.W.S. 250 ORDER DATED 20 TH OF AUGUST 2001 THE DEDUCTION U/S. 80HHC WAS ALLOWED AT RS.1 56 66 460/ WHICH WAS EQUAL TO THE INCOME AVAILABLE TO COVER-UP THE SAID DEDUCTION U/S. 80HHC OF IT ACT. N OW THE AO IS AGAIN REQUIRED TO RE-COMPUTE THE DEDUCTION U/S. 80HHC BEC AUSE THE TRIBUNAL HAS DIRECTED THAT IN A SITUATION IF A BAD DEBT IS N OT TO BE ALLOWED THEN THE DISALLOWANCE OF BAD DEBT IS GOING TO EFFECT THE BU SINESS PROFIT OF THE ASSESSEE. 8.1 IN THIS CONNECTION THE AO HAS NOTED THAT THE A SSESSEE IS A TRADING EXPORTER. THE EXPORT TURNOVER WAS AT RS.3 18 68 24 8/-. THE EXPORT PROFIT WAS ARRIVED AT AFTER REDUCING THE DIRECT CO ST AND INDIRECT COST ATTRIBUTABLE TO THE EXPORT TURNOVER WE REFER SEC. 80HHC(3)(B). ACCORDING TO AO THE PROFIT OF THE BUSINESS MEANS THE PROFIT COMPUTED UNDER THE HEAD PROFITS AND GAINS OF THE BUSINESS. ACCORDING TO AO THE ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 11 - ASSESSEE HAD ALREADY BEEN ALLOWED THE DEDUCTION IN RESPECT OF THE EXPORT PROFIT AS WORKED OUT ON EXPORT TURNOVER. HENCE TH E DEDUCTION U/S.80HHC WAS ALLOWED AT RS.1 81 50 397/ AS WAS CO MPUTED IN THE FIRST ROUND OF PROCEEDINGS. 8.2 WHEN THE MATTER WAS CARRIED BEFORE THE FIRST AP PELLATE TRIBUNAL IT WAS INFORMED THAT ORIGINALLY AN ASSESSMENT U/S. 143 (3) WAS MADE ON 23.03.1999 WHEREIN AGAINST THE NIL RETURN INCOME THE ASSESSMENT WAS COMPLETED AT RS.2 61 89 260/- AS PER THE FOLLOWING CALCULATION. GROSS TOTAL INCOME AS PER RETURN BEFORE BEFORE DEDUCTION U/S 80HHC RS.1 56 12 010/- ADD: BAD DEBTS CLAIMED BUT DISALLOWED RS.2 70 22 27 6/- SALES NOT RECORDED IN THE BOOKS RS. 13 75 921 UNEXPLAINED INVESTMENTS RS. 3 29 450/- GROSS TOTAL INCOME RS. 4 43 39 567/- DEDUCTION U/S 80HHC OF THE ACT RS. 1 81 50 397/- TOTAL ASSESSED INCOME RS. 2 61 89 260/- 8.3 IT WAS CONTENDED THAT THE PROFIT FROM EXPORT WA S REQUIRED TO BE WORKED OUT AS PROVIDED U/S. 80HHC(3)(B) OF IT ACT. FOR WORKING OUT THE PROFIT DERIVED FROM EXPORT OF TRADING GOODS IT SHA LL BE EXPORT TURNOVER AS REDUCED BY DIRECT AND INDIRECT COST ATTRIBUTABLE TO SUCH TURNOVER. FURTHER IN ACCORDANCE WITH EXPLANATION (B) BELOW SECTION 80 HHC(4C) EXPORT TURNOVER MEANS THE SALE PROCEEDS RECEIVED IN OR BR OUGHT INTO INDIA BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE. LEARN ED CIT(A) HAS GIVEN A FINDING THAT THE IMPUGNED BAD DEBT IS NOT THE SALE PROCEEDS RECEIVED IN OR BROUGHT INTO INDIA. BECAUSE OF THIS REASON THE ASS ESSEE IS NOT ELIGIBLE FOR FURTHER DEDUCTION PERTAINING TO THE DISALLOWANCE OF BAD DEBTS. RATHER LEARNED CIT(A) HAS NOTED THAT IN THE ABSENCE OF ANY REVISED COMPUTATION OF DEDUCTION U/S. 80HHC IT APPEARS THAT THE LEARNE D AR HAS FAIRLY ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 12 - ADMITTED THE VIEW TAKEN BY THE AO. HE HAS CONCLUDED THAT THERE WAS NO REQUIREMENT THAT THE DEDUCTION U/S. 80HHC WOULD UND ERGO ANY UPWARD REVISION ON ACCOUNT OF DISALLOWANCE OF BAD DEBTS. I N THE RESULT THE DEDUCTION AS MADE BY THE AO WAS UPHELD. 9. WE HAVE HEARD BOTH THE SIDES. ON CAREFUL C ONSIDERATION OF THE FACTS WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT ENTITLED FOR FURTHER DEDUCTION U/S. 80HHC IN RESPECT OF DISALLOWANCE OF BAD DEBTS. WE HAVE NOTED THAT THE ASSESSEE HAS RECEIVED EXPORT PROCEED S DURING THE YEAR ONLY TO THE EXTENT OF RS.3 18 68 248/-. REST OF THE AMOU NT WAS CLAIMED AS BAD DEBT. THIS FACT HAD COME TO OUR NOTICE AS PER THE P APER BOOK PAGE 13 CONTAINING THE WRITTEN SUBMISSION MADE BEFORE THE L EARNED CIT(A) RELEVANT PORTION IS REPRODUCED BELOW: THE ASSESSEE COMPANYS TOTAL EXPORT TURNOVER FOR TH E RELEVANT YEAR WAS RS.6 01 49 288/- OUT OF WHICH THE ASSESSEE RECEIVED EXPORT PROCEEDS OF RS.3 18 68 248/- DURING THE YEAR. ON THIS AMOUNT TH E COMPANY CLAIMED DEDUCTION U/S. 80HHC OF THE ACT. OUT OF REMAINING R S.2 82 81 040/- THE ASSESSEE COMPANY CLAIMED BAD DEBT OF RS.2 70 22 276 /- 9.1 UNDISPUTEDLY THE ASSESSEE HAD DEBITED AN A MOUNT OF RS.2 70 22 276/- AS BAD DEBT RESERVE ACCOUNT WHIC H WAS TRANSFERRED TO BALANCE SHEET. THE BALANCE SHEET WAS CREDITED BY WA Y OF A PROVISION OF BAD DEBT RESERVE. AS WE HAVE ALREADY HELD THAT THE EXPRESSION PROVISION FOR BAD AND DOUBTFUL DEBT SHOULD NOT BE CONSTRUED AS WRITING OFF BAD DEBT. WHERE THE EXPORT OUT OF INDIA IS OF TRADING GOODS THE PROFITS DERIVED FROM SUCH EXPORT SHALL BE ENTITLED FOR THE DEDUCTION BUT AS PER EXPLANATION (B) UNDER SUB-SEC (4C) OF SEC. 80HHC TH E EXPORT TURN OVER MEANS THE SALE PROCEEDS BROUGHT INTO INDIA IN CONVE RTIBLE FOREIGN ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 13 - EXCHANGE. WHEN THE ADMITTED FACTUAL POSITION IS THA T THE AMOUNT IN QUESTION REMAINED TO BE RECEIVED THEN THERE WAS NO QUESTION OF BRINGING- IN THE FOREIGN EXCHANGE. WE HAVE ALSO NOTED THAT IN RESPECT OF EXPORT OF TRADING GOODS THE EXPORT PROFIT FOR THE PURPOSE OF DEDUCTION U/S 80HHC IS EXPORT TURNOVER AS REDUCED BY THE DIRECT COSTS AND INDIRECT COSTS ATTRIBUTABLE TO SUCH EXPORT. IN THE PRESENT CASE WH EN THERE WAS NO EXPORT TURNOVER OF THE IMPUGNED AMOUNT OF BAD-DEBT THEN TH ERE WAS NO QUESTION TO CONSIDER THE SAME FOR THE DEDUCTION U/S 80HHC. I NTERESTINGLY IT IS WORTH TO MENTION THAT THIS ASSESSEE WAS ASKED TO FU RNISH THE COMPUTATION OF DEDUCTION U/S 80HHC BUT AT ALL STAGES OF PROCEED INGS THE ASSESSEE HAD NOT FURNISHED THE SAME. EVEN DURING THE COURSE OF H EARING THE BENCH HAS ASKED TO SHOW THE SAID COMPUTATION EITHER AS MADE A T THE TIME OF RETURN OR ANY TIME LATER ON BUT EXPRESSED THE INABILITY TO SHOW US THE SAME. IN ANY CASE WE HEREBY SUMMARIZE THE FOUR INGREDIENTS FOR ALLOWANCE OF DEDUCTION U/S 80HHC : (I) THERE SHALL BE AN EXPORT OF GOODS OUT OF INDIA (II) THERE SHALL BE A SALE OF THE EXPORTED GOODS (I II) THERE SHALL BE PROFIT ON EXPORTED SALES AND (IV) THERE SHALL BE RECEIPT OF FOREIGN EXCHANGE BROUGHT IN INDIA. ACCORDING TO US THESE BASIC CONDI TIONS HAVE NOT BEEN FULFILLED IN THE PRESENT CASE. FACTS OF THE CASE HA VE DEMONSTRATED THAT THE AMOUNT IS QUESTION PERTAINED TO THE YEAR UNDER CONS IDERATION. IT IS NOT A CASE THAT IT RELATED TO THE PAST YEARS. FOR ARGUMEN T SAKE EVEN IF IT PERTAINED TO THE PAST YEARS THEN BEING A DEBT MUST BE PART OF THE ASSETS REFLECTED IN THE BALANCE-SHEET MEANING THEREBY THA T THE SALES SHOULD HAVE BEEN SHOWN IN THOSE YEARS AND OVER WHICH ON THE PRO FIT THE ASSESSEE OUGHT TO HAVE GOT THE BENEFIT OF DEDUCTION U/S 80HH C. BECAUSE OF THIS REASON THE CLAIM FOR THIS YEAR EVEN THEN NOT PERMIS SIBLE. IF THE BAD-DEBT IS ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 14 - FOR THE YEAR UNDER CONSIDERATION THEN ALSO AS DISC USSED ABOVE NOT PERMISSIBLE AS PER LAW. WE THEREFORE HOLD THAT BOTH THE LOWER AU THORITIES HAVE CORRECTLY APPRECIATED THE FACTS OF THE CASE AS ALSO THE LAW A PPLICABLE IN RESPECT OF THE COMPUTATION OF DEDUCTION U/S.80HHC; HENCE NO I NTERFERENCE IS REQUIRED. THIS GROUND IS THEREFORE REJECTED. REST OF THE GROUNDS ARE IN RESPECT OF LEVY OF PENALTY PROCEEDINGS WHICH ARE NOT EMANATING AT PRESENT FROM THE ORDER O F THE LEARNED CIT(A) THEREFORE PREMATURE IN NATURE HENCE DISMISSED. 9. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. B. ITA NO. 997/AHD/2012 (FOR A.Y. 1996-97) 10. THE ASSESSEE HAS CHALLENGED THE LEVY OF PENALTY CONFIRMED BY LEARNED CIT(A)-XI AHMEDABAD OF RS. 1 20 47 061/- AS PER THE ORDER DATED 18.07.2011. AT THE OUTSET IT IS WORTH TO MEN TION THAT THE LEARNED CIT(A) HAD PASSED AN EX-PARTE ORDER. AS PER THE PEN ALTY ORDER U/S. 271(1)(C) DATED 30 TH OF DECEMBER 2010 THE ASSESSEE HAS DELIBERATELY CLAIMED BAD DEBT OF RS.2 70 22 276/- WHICH ACCORDIN G TO A.O. WAS NOT A GENUINE CLAIM. WE HAVE NOTED THAT FEW NOTICES WERE ISSUED BUT THOSE REMAIN NOT COMPLIED WITH HENCE THE AO HAD NO ALTER NATIVE BUT TO IMPOSE PENALTY ON THE IMPUGNED ADDITION. RESULTANTLY A PE NALTY OF RS.1 20 47 061/- WAS IMPOSED. 11. WHEN THE MATTER WAS CARRIED BEFORE LEARNED CIT( A) IT WAS HELD AS UNDER: ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 15 - IT IS OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED ANY REPLY IN RESPONSE TO THREE NOTICES ISSUED BY AO DURING THE PENALTY PROCE EDINGS AND EVEN BEFORE ME DURING THE APPELLATE PROCEEDINGS. IN VIEW OF NON-CO MPLIANCE THE AO HAD NO ALTERNATIVE BUT TO IMPOSE THE PENALTY. IT IS NOW WE LL SETTLED THAT EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT AUTOMATICALLY COMES IN TO OPERATION WHEN IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF TOTAL INCOME OF ANY ASSESSEE THERE IS FAILURE TO OFFER AN EXPLANATION OR AN EXPLANATION IS OFFERED WHICH IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR AN EXPLANATION IS OFFERED WHICH IS NOT SUBSTANTIATED. IN SUCH A CASE THE AMO UNT ADDED IN COMPUTING THE TOTAL INCOME IS DEEMED TO REPRESENT THE INCOME IN R ESPECT OF WHICH THE PARTICULARS HAVE BEEN CONCEALED AND CONSEQUENTLY T HE ASSESSEE BECOMES LIABLE TO THE PENALTY PROVIDED BY SECTION 271(1)(C) OF THE ACT. IN NUTSHELL THE EXPLANATION SHIFTS THE BURDEN OF PROOF ON THE ASSES SEE. K.P. MADHUSUDAN V. CIT 251 ITR 99 (SC). IN THE INSTANT CASE THE ASSES SEE DID NOT DISCHARGE THAT BURDEN BEFORE THE AO AND ACCORDINGLY IT IS LIABLE T O PAY PENALTY. IN VIEW OF THE ABOVE I AM OF THE VIEW THAT IN THE INSTANT CASE THE APPELLANT HAS CONCEALED/FURNISHED INACCURATE PARTICULARS OF ITS I NCOME. THEREFORE IN VIEW OF THE ABOVE DISCUSSION I AM OF THE CONSIDERED VIE W THAT THE ASSESSING OFFICER IS JUSTIFIED IN LEVYING THE PENALTY UNDER SECTION 2 71(1)(C) OF THE IT ACT 1961. ACCORDINGLY THE ORDER LEVYING THE IMPUGNED PENALTY AMOUNTING TO RS.1 20 47 061/- IS HEREBY CONFIRMED. 12. FROM THE SIDE OF THE APPELLANT LEARNED AR MR. SOPARKAR ARGUED THAT THE RETURN WAS FILED UNDER A BONAFIDE BELIEF T HAT THE CLAIM OF BAD DEBT WAS ADMISSIBLE AS PER LAW. LEARNED AR HAS FURTHER A RGUED THAT AT THE TIME WHEN THE RETURN WAS FILED THERE WAS NO PROVISI ON FOR DISALLOWANCE OF BAD DEBT WHICH WAS INTRODUCED SUBSEQUENTLY. HE HAS PLEADED THAT EVEN THE MATTER WAS DISPUTED ONE THAT IS WHY THE TRIBUN AL HAD RESTORED THE ISSUE BACK TO AO FOR DENOVO CONSIDERATION. ON ACCOU NT OF THESE FACTS AND CONSIDERING THE DOUBTFUL NATURE OF THE CLAIM THE AS SESSEE COULD NOT BE PENALIZED. ALL THE FACTS IN RESPECT OF THE CLAIM OF BAD DEBT WAS VERY MUCH ON RECORD AND THE ASSESSEE HAD NOT ANTICIPATED WHE N THE RETURN WAS FILED THAT ON THOSE FACTS THAT THE CLAIM OF BAD DEBT WAS GOING TO BE DISALLOWED BY THE REVENUE DEPARTMENT. HOWEVER LEARNED DR HAS DRAWN OUR ATTENTION PRIMARILY ON THE NON-GENUINENESS. ACCORDI NG TO LEARNED DR THE ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 16 - ASSESSEE HAD PREFERRED NOT TO APPEAR BEFORE THE AO AND EVEN BEFORE LEARNED CIT(A). IN THE ABSENCE OF ANY EXPLANATION F ROM THE SIDE OF THE ASSESSEE LEARNED CIT(A) HAD NO OBJECTION BUT TO CO NFIRM THE LEVY OF PENALTY. 13. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES WE ARE OF THE CONSIDERED OPINION THAT ALTHOUGH THE ASSESSEE HAD N OT APPEARED BEFORE THE REVENUE AUTHORITIES BUT STILL IN THE LIGHT OF T HE ORDER NOW PRONOUNCED BY US PERTAINING TO THE QUANTUM ADDITION THE ASSES SEE DESERVES RIGHT TO EXPLAIN HIS CASE PERTAINING TO THE CONCEALMENT OF P ENALTY TO LEARNED CIT(A). THEREFORE WE HEREBY RESTORE THIS ISSUE OF CONCEALMENT PENALTY BACK TO THE STAGE OF FIRST APPEAL TO BE DECIDED DE NOVO AFTER PROVIDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. SIDE BY SIDE WE HEREBY STRICTLY DIRECT THE ASSESSEE TO BE PRESENT B EFORE LEARNED CIT(A) WITHIN 30 DAYS ON RECEIPT OF THIS ORDER WITHOUT FAI LING AND REPRESENT EITHER PERSONALLY OR THROUGH HIS REPRESENTATIVE TH E ISSUE OF LEVY OF CONCEALMENT PENALTY. THE ASSESSEE SHALL NOT SEEK UN NECESSARILY ADJOURNMENT HOWEVER LEARNED CIT(A) IS AT LIBERTY TO DECIDE THIS APPEAL AS PER LAW. THE MATTER BEING RESTORED BACK; HENCE THE GROUNDS RAISED IN THIS REGARD MAY BE TREATED AS ALLOWED ONLY FOR STAT ISTICAL PURPOSE. 14. IN THE RESULT QUANTUM APPEAL OF THE ASSESSEE I S DISMISSED AND THE PENALTY APPEAL IS ALLOWED ONLY FOR STATISTICAL PURP OSE. SD/- SD/- (T.R. MEENA) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDI CIAL MEMBER AHMEDABAD; DATED 31/10/2013 PRABHAT KR. KESARWANI SR. P.S. TRUE COPY TRUE COPY TRUE COPY TRUE COPY ITA NO.1369/AHD/2010 & 997/AHD/2012 ROBINSON IMBEX (I) P. LTD. (NOW ROBINSON WORLDWIDE TRADE LTD.) VS. ITO AHMEDABAD. FOR A.YS. 1996-97 - 17 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III AHMEDABAD 5. / DR ITAT AHMEDABAD 6. / GUARD FILE. / BY ORDER / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD