2013 (10) TMI 200 - HC - Income Tax

Bad debts Section 36(1)(vii) - Held that - Tribunal as in case of TRF(T.R.F.) Ltd (2010 (2) TMI 211 - SUPREME COURT) the Apex Court has made it clear inter alia that it is not necessary for the assessee to establish any more that the debt has become irrevocable after 01.04.1989. It would be sufficient for him to write off the debt as irrevocable in his account. Such being a ratio of the Apex Court when it was not noticed by the Tribunal it chose to recall its earlier order. In the instant case, Tribunal is yet to decide the entire aspect on merits. It has merely directed the office to to refix the hearing on the question whether the ratio would be applicable to the case of assessee. As applicability of ratio to the facts is yet to be decided by the Tribunal and when it was perfectly justified in recalling the order for not having considered such ratio at the time of deciding the entire case on merits, we see no reason to entertain this appeal as it does not give rise to any substantial question of law - Decided against Revenue.

Summary

Issues involved:
Challenging order of the Income Tax Appellate Tribunal based on the application of TRF Ltd. v. CIT decision and recalling of the earlier order for re-examination.

Analysis:
The appellant challenged the Income Tax Appellate Tribunal's decision, raising substantial questions of law regarding the reversal of the entire decision and the recall of the order for re-examination in light of the TRF Ltd. v. CIT decision. The appellant argued that the Tribunal wrongly applied the TRF Ltd. decision, emphasizing that it should only be applicable when bad debts become irrevocable. The appellant also cited the Assistant Commissioner of Income Tax Vs. Saurashtra Kutch Stock Exchange Ltd. case to highlight the jurisdiction in rectifying mistakes. The Tribunal considered all grounds of appeal raised by the revenue against the CIT(A) order and subsequently, the appellant filed a civil application stating that the TRF Ltd. decision was not considered, leading to an error on the face of the record. The Tribunal, acknowledging the oversight, recalled its order to re-examine the issue based on the TRF Ltd. decision. The Tribunal's decision to recall the order was justified as the TRF Ltd. decision clarified that it is not necessary for the assessee to prove the debt as irrevocable after a certain date, but sufficient for the debt to be written off as irrevocable in the accounts. Since the Tribunal had not yet decided the applicability of the TRF Ltd. decision to the case at hand, it was reasonable to recall the order for further examination. Therefore, the appeal was dismissed as it did not raise any substantial question of law.

This analysis highlights the legal arguments presented by the appellant, the Tribunal's rationale for recalling the order, and the applicability of the TRF Ltd. decision in the context of the case, leading to the dismissal of the appeal.