9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 2295 - AT - Income TaxDisallowance u/s 36(1)(viia)(c) - Provision of Bad Debt written off u/s 36(1)(viia)(c) by considering the closing balance in the Provision as credit balance - HELD THAT - AO has disallowed the claim of the assessee with the statement that the assessee has already taken a lot of time and the case was time barred on 31st March 2014. Accordingly a final opportunity was given to the assessee to give details by 18.03.2014. No reply was received by the AO and accordingly the claim of the assessee was disallowed considering the fact that there was no new provision for bad and doubtful debts made by the assessee. Now the assessee has filed the details of provision made for bad and doubtful debts and submitted that the assessee has made fresh provision though the written back of provision was more than the new provision made during the year therefore there was a credit balance in the NP Account. Assessee did not furnish the relevant details before the authorities below we set aside this issue to the record of the AO for verification of necessary details and particularly the fact of new provision made by the assessee during the year under consideration and then decide the issue as per law. Needless to say the assessee be given an opportunity of hearing before passing the fresh order - Appeal of the assessee is allowed for statistical purpose. MAT provisions applicability in the case of the financial corporations as the accounts are not maintained as per Schedule-VI of the Companies Act - HELD THAT - Identical issue was decided by the Hon ble Jurisdictional High Court in assessee s own case for the earlier assessment years 2017 (7) TMI 1196 - RAJASTHAN HIGH COURT as held question of law which has been framed is very clear whether the respondent assessee will be governed u/s 115JA read with Section 2(18)(a). On a plain reading as reproduced above and in view of forgoing conclusion and even as per statement of Mr. Mathur it will not be covered. However he has tried to take support of Section 43 which is misconceived. While interpreting the taxing statute the Court has to rely upon the taxing statute and not any other provisions. - Decided in favour of assessee. Disallowance of expenditure made on account of prior period - AO has made a disallowance on account of rent paid of the earlier years to the Directorate of Estate Government of Rajasthan for Bikaner House expenses New Delhi on the ground that these expenses pertain to the earlier years and therefore cannot be allowed for the year under consideration - CIT-A deleted the addition - HELD THAT - CIT (A) has given the finding that the demand was raised by the Government of Rajasthan during the year under consideration and therefore the same was crystallized during the year itself. Once the fact of raising the demand by the Government of Rajasthan during the year has not been disputed by the AO therefore we do not find any error or illegality in the order of ld. CIT (A) in allowing the claim of expenditure on the ground that the same is crystallized during the year under consideration. Addition on account of the Provision made against NPA which was written back during the year under consideration - assessee challenged the action of the AO but could not succeed as the CIT (A) has confirmed the addition made by the AO on the ground that the assessee has not furnished the relevant year-wise details to substantiate its claim - HELD THAT - As directed the AO to reconsider the claim of the assessee for the assessment years 2011-12 and 12-13 after verification of the new provision made during those years. Further if any part of the amount which is written back by the assessee during the year under consideration was already allowed in the earlier assessment years then to that extent the written back amount has to be included in the income of the assessee. The amount of written back of provision which was never allowed by the AO in the assessment proceedings cannot be added to the income of the assessee. Accordingly we set aside this issue to the record of the AO for verification of all the details relevant to this issue as how much of the amount written back during the year under consideration was allowed in the earlier years and only to that extent the same has to be added to the income of the assessee. Assessee be given an opportunity of hearing before passing the fresh order.
Issues Involved:
1. Validity of reopening of assessment under section 148. 2. Disallowance of Provision for Bad Debt under section 36(1)(viia)(c). 3. Applicability of Minimum Alternate Tax (MAT) provisions under section 115JB. 4. Disallowance of prior period expenses. 5. Addition of written-back provision for bad and doubtful debts. Issue-wise Detailed Analysis: 1. Validity of Reopening of Assessment (Assessment Year 2006-07): The assessee contested the reopening of the assessment under section 148, arguing that all necessary details were provided during the original assessment, and no new facts were available to the Assessing Officer (AO). The Tribunal noted that this ground was not pressed before the Commissioner of Income Tax (Appeals) [CIT (A)], and thus, the assessee cannot raise it directly before the Tribunal. Consequently, the Tribunal declined to entertain this ground, resulting in the dismissal of the appeal. 2. Disallowance of Provision for Bad Debt (Assessment Years 2010-11, 2011-12, 2012-13, 2013-14): For the assessment year 2010-11, the assessee did not press the ground, leading to the dismissal of the appeal. For the assessment years 2011-12 and 2012-13, the Tribunal noted that the AO disallowed the provision for bad debt due to a lack of fresh provision during the year. The Tribunal remanded these issues back to the AO for verification of new provisions made during the respective years, directing the AO to decide afresh after providing an opportunity for hearing. For the assessment year 2013-14, the Tribunal observed that the AO added the written-back provision for bad debts without verifying if it was allowed in earlier years. The Tribunal remanded the issue back to the AO for verification and appropriate action. 3. Applicability of MAT Provisions (Assessment Year 2012-13): The Tribunal addressed the revenue's appeal regarding the applicability of MAT provisions under section 115JB. The CIT (A) had held that MAT provisions were not applicable to the assessee, a financial corporation, as its accounts were not maintained as per Schedule VI of the Companies Act. The Tribunal upheld the CIT (A)'s decision, referencing the jurisdictional High Court's ruling in the assessee's favor for earlier years. 4. Disallowance of Prior Period Expenses (Assessment Year 2012-13): The AO disallowed Rs. 3,01,764/- as prior period expenses. The CIT (A) allowed the claim, noting that the demand was raised by the Government of Rajasthan during the relevant year, thus crystallizing the expense in that year. The Tribunal upheld the CIT (A)'s decision, finding no error or illegality in allowing the expense. 5. Addition of Written-back Provision for Bad and Doubtful Debts (Assessment Year 2013-14): The AO added Rs. 10,20,90,000/- to the assessee's income, representing the written-back provision for bad debts. The assessee argued that this provision was not allowed in earlier years. The Tribunal remanded the issue to the AO for verification of the amount allowed in earlier years and directed the AO to add only the portion previously allowed to the current year's income. Conclusion: The appeals of the assessee for the assessment years 2006-07 and 2010-11 were dismissed. The appeals for the assessment years 2011-12, 2012-13, and 2013-14 were allowed for statistical purposes, remanding the issues back to the AO for verification and fresh decision. The revenue's appeal for the assessment year 2012-13 was dismissed. The Tribunal pronounced the order in the open court on 16/07/2018.
|
