2016 (12) TMI 1866 - AT - Income Tax

Disallowance of bad debts written off - Admission of additional supporting documentary evidences - HELD THAT - As additional evidence as filed by the assessee has substantial bearings on the issue involved and raised by the assessee. We, therefore, in the interest of justice inclined to admit the same. We further find that these evidences are required to be examined and evaluated at the end of the AO. We, therefore, set aside the order of the ld.CIT(A) and restore the issue to the file of the AO for appreciation of evidences as may be filed by the assessee and adjudication of the issue denovo as per facts and law after allowing reasonable opportunity of hearing to the assessee. Levy of interest u/s 234C - non considering the computation furnished by the assessee evidencing the fact that interest levied u/s 234C not be charged - HELD THAT - As assessee has fully paid the advance tax on the basis of the returned income as per the income tax return as per the provisions of the Act. We, therefore, find merit in the submissions of the ld. Sr. Standing Counsel qua non charging of interest u/s 234C of the Act and accordingly restore the matter to the file of AO with a direction to the AO to examine the issue on the basis of facts of the case and decide the issue accordingly. This ground is allowed for statistical purposes.

Summary

Issues:
1. Disallowance of bad debts written off
2. Levy of interest under section 234C of the Act

Analysis:
1. The first issue pertains to the disallowance of bad debts written off amounting to ?30,57,413 by the CIT(A). The appellant filed an appeal against this order. During the proceedings, the appellant requested the admission of additional supporting documentary evidence to adjudicate the issue effectively. The ITAT found the additional evidence crucial for the case and decided to admit it in the interest of justice. The ITAT set aside the CIT(A)'s order and remanded the issue back to the AO for a fresh adjudication based on the new evidence, ensuring a fair opportunity for the appellant to present their case.

2. The second issue revolves around the levy of interest under section 234C of the Act, challenged by the appellant. The appellant contended that there was no shortfall in the payment of advance tax based on the original income tax return. After reviewing the submissions and documents, the ITAT concluded that the appellant had indeed paid the advance tax as per the returned income, complying with the Act's provisions. Consequently, the ITAT agreed with the appellant's argument and directed the AO to reexamine the issue based on the factual circumstances of the case. Ultimately, the ITAT allowed the appeal of the assessee on this ground for statistical purposes.

In conclusion, the ITAT Mumbai, comprising Hon'ble S/Shri Joginder Singh (JM) and Rajesh Kumar (AM), delivered a detailed judgment addressing the disallowance of bad debts written off and the levy of interest under section 234C of the Act. The ITAT emphasized the importance of admitting additional evidence for a fair adjudication and upheld the appellant's contentions regarding the advance tax payment, granting relief on both grounds. The judgment was pronounced on 5th December 2016, allowing the appeal of the assessee for statistical purposes.