M/S. PRATIK STOCK VISION PVT. LTD, v. ITO 4(2)(1),

MA 68/MUM/2011 | 2004-2005
Pronouncement Date: 27-07-2011 | Result: Dismissed

Appeal Details

RSA Number 6819924 RSA 2011
Assessee PAN AABCP8660P
Bench Mumbai
Appeal Number MA 68/MUM/2011
Duration Of Justice 5 month(s) 25 day(s)
Appellant M/S. PRATIK STOCK VISION PVT. LTD,
Respondent ITO 4(2)(1),
Appeal Type Miscellaneous Application
Pronouncement Date 27-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 27-07-2011
Assessment Year 2004-2005
Appeal Filed On 02-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH MUMBAI BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER MA NO. 68/MUM/2011 (ARISING OUT OF ITA NO. 2390/MUM/2008) (ASSESSMENT YEAR: 2004-05) M/S. PRATIK STOCK VISION P. LTD. INCOME TAX OFFICER - 4(2)(1) 17 KHATAU BLDG A.D. MODI MARG AAYAKAR BHAVAN M.K . ROAD FORT MUMBAI 400023 VS. MUMBAI 400020 PAN - AABCP 8660 P APPLICANT RESPONDENT APPLICANT BY: SHRI HARESH P. SHAH RESPONDENT BY: SHRI C.G.K. NAIR O R D E R PER B. RAMAKOTAIAH A.M. BY THIS MISCELLANEOUS APPLICATION ASSESSEE REQUESTS THAT THE DETAILS ENCLOSED IN THIS APPLICATION MAY BE ADMITTED AND AD JUDICATED IN THE INTEREST OF JUSTICE AS IT IS MOST RELEVANT TO SUBSTANTIATE T HE ISSUE RAISED IN RESPECT OF ALLEGED BAD DEBT. 2. THE REASONS FOR PREFERRING THE PRESENT MISCELLANEOU S APPLICATION IS THAT THE APPEAL BY THE ASSESSEE WAS DISPOSED OFF BY THE TRIBUNAL BY ITS ORDER DATED 30 TH DECEMBER 2010 IN ITA NO. 2390/MUM/2008 FOR A.Y. 20 04.05. THE ISSUE INVOLVED IN THE APPEAL IN GROUND NO. 1 WA S WITH REGARD TO THE CLAIM OF BAD DEBT UNDER SECTION 36(1)(VII) OF AN AM OUNT OF ` 15 70 490/- PERTAINING TO SHRI ATUL KHADILKAR IN HIS INDIVIDUAL WELL AS HUF CAPACITY. ASSESSEE CLAIMED BAD DEBT OF THE AMOUNT AT THE TIME OF FILING THE RETURN OF INCOME ALONGWITH ANOTHER BAD DEBT AND A.O. EXAMINED THE CLAIM OF BAD DEBT. HE ALLOWED THE BAD DEBT PERTAINING TO ANOTHER COMPANY WHEREAS DISALLOWED THE AMOUNT PERTAINING TO SHRI ATUL KHADI LKAR ON THE REASON THAT THE AMOUNT HAS NOT BECOME BAD. THE ITAT AFTER CONS IDERING THE ORDER OF THE CIT(A) AND THE SUBMISSIONS OF THE LEARNED COUNSEL C ONFIRMED THE DISALLOWANCE VIDE PARA 6 OF THE ORDER. MA NO. 68/MUM/2011 M/S. PRATIK STOCK VISION P. LTD. 2 3. IN THE MISCELLANEOUS APPLICATION IT WAS PRAYER OF THE ASSESSEE THAT THE ISSUE WAS TAKEN UP ON 13.12.2010 AS COVERED B Y THE DECISION OF THE HON'BLE SPECIAL BENCH IN THE CASE OF DCIT VS. SHREY AS MORAKHIA AND ATTENTION WAS DRAWN TO THE FACTS THAT THE BAD DEBT WAS RECOVERED AND OFFERED FOR TAXATION IN SUBSEQUENT YEARS I.E. A.Y. 2005-06 AND 2006-07. ON AN ENQUIRY BY THE BENCH ABOUT THE DATE OF RECOVERY AND WHETHER THE RECOVERY WAS MADE BY THE TIME OF THE ACCOUNTS BEING FINALISE D OR NOT IT WAS THE PRAYER THAT THE LEARNED COUNSEL WAS ASKED TO GIVE S UFFICIENT TIME AS THE DIRECTOR HAS GONE AWAY AND WAS NOT EXPECTED BY 18.1 2.2010. HOWEVER THE BENCH GAVE TIME ONLY UPTO 16.12.2010 AND IT WAS THE SUBMISSION THAT THE LEARNED COUNSEL EXPRESSED HIS INABILITY TO FURNISH THE ACCOUNT DETAILS. IT WAS FURTHER MENTIONED IN THE MA THAT AN OPINION WAS EXP RESSED BY THE BENCH THAT THERE IS NO NEED TO ADJOURN THE CASE FOR THE R EASON THAT THE ISSUE WILL BE SET ASIDE TO THE LEARNED ITO FOR VERIFICATION OF TH E FACTS AND AT THAT TIME IT WAS SUGGESTED TO PRODUCE THE DETAILS ON THE ISSUE A S TO WHETHER THE RECOVERY WAS MADE BY THE TIME THE ACCOUNTS BEING FINALISED O R NOT. IT WAS FURTHER SUBMITTED THAT ASSESSEE BONAFIDELY BELIEVED THAT TH E MATTER WOULD BE SET ASIDE WHEREAS THE DISALLOWANCE WAS CONFIRMED BY THE BENCH. IN SUPPORT OF THE CONTENTION ASSESSEE PLACED ON RECORD AN AFFIDAV IT BY THE AUTHORISED REPRESENTATIVE SHRI HARISH P. SHAH CHARTERED ACCO UNTANT WHO REITERATED THE SAME IN THE AFFIDAVIT FILED ALONG WITH THE MA. ASSESSEE ALSO ENCLOSED THE DETAILS OF RECOVERY BY WAY OF ANNEXURE C FROM PAGE 8 TO 12 TO THE MA. 4. DURING THE COURSE OF HEARING THE LEARNED COUNSEL RE ITERATED THE SUBMISSIONS MADE IN THE MA AND REQUESTED TO RECONSI DER THE ISSUE IN THE LIGHT OF THE FACTS BROUGHT ON RECORD. 5. THE LEARNED D.R. HOWEVER OBJECTED THAT THE MISCEL LANEOUS APPLICATION CANNOT BE CONSIDERED AS THE ITAT HAS RE CORDED THE FACTUAL FINDINGS ABOUT THE INABILITY TO FURNISH THE DETAILS WHEN ASKED FOR AND THE BAD DEBT WAS NOT ALLOWED AS THE CLAIM WAS NOT JUSTI FIED. 6. WE HAVE CONSIDERED THE ISSUE. WE ARE OF THE OPINION THAT THERE IS NO NEED TO CONSIDER THE MISCELLANEOUS APPLICATION NOW FILED BY THE ASSESSEE FOR THE FOLLOWING REASONS: - MA NO. 68/MUM/2011 M/S. PRATIK STOCK VISION P. LTD. 3 (A) THE ISSUE IN APPEAL WAS WHETHER THE BAD DEBT CL AIM WAS GENUINELY MADE OR NOT. THERE WAS A FINDING BY THE CIT(A) IN PARA 1 9 OF THE ORDER AS UNDER: - 1.9 THE CLAIM OF BAD DEBT THEREFORE IS NOT ALLOW ABLE ON ACCOUNT OF FOLLOWING: (I) THE DEBT NEVER BECOME BAD. (II) THE DEBT WAS NOT EVEN DOUBTFUL. (III) THE LAST TRANSACTION HAS TAKEN PLACE ON 14.12.2003 AND SHRI ATUL KHADILKAR HAS BEEN A CLOSE FRIEND OF THE DIREC TORS OF THE COMPANY MR. S.K. JHUNJHUNWALA AND BOTH APPEARED TO GETHER BEFORE A.O. ON 12.11.2007 TO GIVE HIS STATEMENT. TH E WRITING OFF OF THE DEBT ON 31.3.2004 WAS NOT BASED ON ANY B USINESS DECISION OF A PRUDENT BUSINESSMAN BUT WAS AN ATTEMPT TO REDUCE THE TAX LIABILITY OF THE YEAR. IN VIEW OF THE FINDINGS IN SUB-PARA 3 THAT IT WAS A N ATTEMPT TO REDUCE THE TAX LIABILITY OF THE YEAR THE LEARNED COUNSEL WAS SPEC IFICALLY ASKED TO JUSTIFY THE DATES OF PAYMENT WHETHER THEY WERE RECOVERED BY THE TIME THE ACCOUNTS WERE FINALISED OR NOT. THERE WAS NO PRAYER FOR FURT HER ADJOURNMENT NOR THERE WAS ANY ASSURANCE GIVEN BY THE BENCH REGARDING THE MATTER BEING SET ASIDE. THIS PART OF THE AFFIDAVIT AND PRAYER BY THE ASSESS EE WAS NOT BORNE OUT OF APPEAL RECORD. (B) THE CIT(A) HAS GIVEN AN OPPORTUNITY TO THE ASSE SSEE IN THE REMAND PROCEEDINGS BEFORE THE A.O. THE A.O. HAS RECORDED V ARIOUS STATEMENTS AND QUESTIONED BOTH THE DIRECTOR AND SHRI ATUL KHADILKA R ABOUT BAD DEBT CLAIM. VIDE PARA 5 OF CIT(A)S ORDER THE REMAND REPORT OF THE A.O. WAS EXTRACTED AND VIDE SUB-PARA VIII FOLLOWING FINDING WAS RECORD ED BY THE A.O.: - (VIII) MR. ATUL KHADILKAR IN HIS STATEMENT MENTION ED THAT HE HAS PAID HIS ALL DUES IN JAN-FEB. 2005 IN RESPECT OF HU F AND IN JUNE 2005 IN RESPECT OF INDIVIDUAL. HE HAS PRODUCE D THE EVIDENCES IN THIS REGARD. MR. S.K. JHUNJHUNWALA ALS O CONFIRMED THE ABOVE AND STATED THAT THEY HAVE OFFER ED IT AS INCOME IN THE A.Y. 2005-06 AND A.Y. 2006-07. THESE ARE THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE. THES E EVIDENCES WERE NEITHER PRODUCED DURING THE COURSE O F ASSESSMENT PROCEEDINGS NOR IN THE APPELLATE PROCEED INGS BEFORE YOUR HONOUR. HENCE IT CANNOT BE CONSIDERED AS THE ADDITIONAL EVIDENCES. THEREFORE IT WAS ALREADY ON RECORD THAT SHRI ATUL K HADILKAR HAS PAID ALL HIS DUES IN JANUARY-FEBRUARY 2005 AND THE RELEVANT ACCO UNT COPIES AND BANK STATEMENTS WHICH ARE ADDITIONAL EVIDENCES BEFORE T HE CIT(A) WERE TAKEN MA NO. 68/MUM/2011 M/S. PRATIK STOCK VISION P. LTD. 4 COGNIGANCE. SINCE THE ISSUE OF REPAYMENTS WERE ALRE ADY CONSIDERED BY THE A.O. AND EXAMINED THE PRAYER OF THE ASSESSEE NOW B EING MADE THAT THEY WERE OF THE OPINION THAT THE MATTER WOULD BE SET AS IDE SO THAT NECESSARY DETAILS CAN BE FURNISHED BEFORE THE A.O. DOES NOT A RISE AND IS MISLEADING. (C) THE ITAT ALSO HAS CONSIDERED THE STATEMENT ON R ECORD AND OTHER EVIDENCES PLACED IN THE PAPER BOOK AND CONCURRED WI TH THE FINDINGS OF THE CIT(A) THAT THE CLAIM WAS NOT BONAFIDE. THE FINDING S IN PARA 6 AFTER DISCUSSION IS AS UNDER: - 6. .. IN THE ABSENCE OF ANY JUSTIFICATION FOR CLA IMING THE AMOUNT AS BAD DEBT WHICH ITSELF WAS RECOVERED IMMEDIATELY IN THE LATER YEAR(S) THE FINDINGS OF THE A.O. AND CIT(A) THAT THE CLAIM OF BAD DEBT IS NOT GENUINE HAS TO BE UPHELD. IN VIEW OF THIS THE ASSE SSEES CLAIM OF BAD DEBT DURING THE YEAR AND IN THE ALTERNATIVE AS BUS INESS LOSS CANNOT BE ALLOWED. ORDERS OF THE A.O. AND THE CIT(A) ON TH IS ISSUE ARE THEREFORE UPHELD. GROUND NO. 1 IS ACCORDINGLY REJE CTED. IN VIEW OF THIS WE ARE OF THE OPINION THAT THERE I S NO NEED TO CONSIDER THE MISCELLANEOUS APPLICATION AS SOUGHT OUT BY THE ASSE SSEE. THERE IS NO MERIT IN THE CONTENTIONS. 7. IN THE RESULT THE MISCELLANEOUS APPLICATION IS REJ ECTED. ORDER PRONOUNCED IN THE OPEN COURT ON27TH JULY 2011 . SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 27 TH JULY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) IV MUMBAI 4. THE CIT IV MUMBAI CITY 5. THE DR C BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.