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TMI Blog2008 (6) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the facts stated and material available. Thus the Tribunal is justified. (ii) In the absence of non-furnishing of particulars by the assessee to claim the benefit before the Assessing officer for the purpose of section 80-O, the claim could not be accepted. Deduction under section 80-O of the Act was to be allowed as against the net income computed in accordance with the provisions of the Act as contemplated under section 80AB of the Act. X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Assessing Officer ignoring the Explanation to the aforesaid provision of the Act which clearly states that there shall not be a provision made by the assessee while claiming the benefit of deduction for the purpose of bad debt and the Tribunal has erroneously set aside the same in the absence of material particulars produced by it before the Assessing Officer, first appellate authority or before it. 4. The learned counsel in support of his submission has placed reliance upon the Division Bench decision of the Allahabad High Court in the case of Jubilant Organosys v. CIT reported in [2004] 265 ITR 420 (All) wherein the said Division Bench has placed reliance upon the Explanation to section 36(1) (vii) of the Act which was inserted by the Finance Act of 2001 and held that the deduction is not permissible in respect of any provision for bad and doubtful debts made in the accounts of the assessee The said deci sion, according to the learned counsel the for the Revenue is affirmed by the apex court by dismissing the SLP in SLP No. 3828/04 filed by the asses- see and he has also placed reliance upon another decision of the Madras High Court in the case of CIT v. Micromax Systems P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has been followed by another Division Bench of this court (of which V. G. G. J was a member) in I. T. A. Nos. 438-444/2002 c/w. I. T. A. Nos. 3047/2005 and 6/2004 dated September 21, 2007. He has also placed reli ance upon the Division Bench decision of the Bombay High Court in the case of CIT v. Asian Cable Corporation Ltd. (No. 2) reported in [2003] 262 ITR 537 wherein the Bombay High Court has interpreted section 80-0 read with section 80AB and section 80B(5) of the Act, claiming the benefit under the above provision of the Act and came to the conclusion that it is the net income after deducting the expenses incurred by the assessee to earn the gross income upon which the benefit of deduction in the returns can be claimed under section 80-0 of the Act. 7. Further, it is contended by the learned counsel for the Revenue that the Appellate Tribunal has committed an error in law in setting aside the order regarding deduction of 10 per cent. of the expenses out of gross income claimed by the assessee by placing reliance upon the decision of M. N. Dastur's case [2000] 243 ITR 10 (Cal), further on the basis of the said decision approved by this court in C. P. No. 58/98 (IT) dispose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent finding of fact as recorded by the first appellate authority in its order at paragraph 6 on the contentious point that arose for his consideration with reference to the legal submissions made on behalf of the assessee's counsel that the Assessing Officer without verifying the particulars made available before him has passed the assessment order. There fore, he has submitted that the concurrent finding recorded by the first appellate authority is erroneous for non-consideration of material evidence on record and urged that the Tribunal after referring to the same and extracting the item-wise claim made by the assessee with reference to the bad and doubtful debts for the deduction claimed by it under section 36(1)(viii) of the Act has been rightly set aside by the Tribunal and remanded the matter back to the Assessing Officer to reconsider the same by recording its reasons at paragraph 3.11 in the impugned judgment. Therefore, the finding recorded by the Appellate Tribunal in the impugned judgment for setting aside the concurrent finding of the first appellate authority is neither erroneous nor error in law. Therefore, the learned counsel submits that the first substantial questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he software to claim the benefit of deduction under section 80-0 of the Act by the assessee for the assessment years in question. 13. The Tribunal has recorded a finding of fact on the basis of material particulars furnished by the assessee which are on the record to show that no expense was incurred by the assessee, therefore, there was no need for it to deduct expenses out of gross income earned by the assessee for the manufacture of software exported as provided under section 80AB of the Act in respect of the assessment years and, therefore, the learned counsel submits that the Tribunal has rightly set aside the concurrent findings of first appellate authority in exercise of its appellate jurisdiction and power, therefore, he submits that the second substantial question of law referred to above does not arise for consideration of this court these appeals and requested to answer the same against the Revenue. 14. After hearing these appeals at length and on a careful consideration of rival legal contentions urged on behalf of the parties, we answer substantial question of law No. 1 in favour of the assessee by assigning the following reasons: (i) In all these appeals the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing authority has not considered the material evidence on record before him to justify the claim under the aforesaid provisions of the Act under two items, viz., provision of debt/advances by debiting to the books of account for the assessment years in question in respect of different items though the same are not written off against each individual debtor, but, the same is written off as bad and doubtful debt which is permissible in law. Merely because the nomenclature of bad and doubtful debts is used in the annual returns, the Assessing Officer was required to examine as to whether on the facts and in law the same is in respect of various items claimed by the assessee for deduction in all these appeals is shown as provision as stated in the Explanation to clause (vii) of section 36(1) of the Act. On a careful consideration of the accounts and appreciating the material facts he has recorded a finding of fact holding that it is only a provision but not written off in books of account as the debt is irrecoverable from its debtors. The said finding is challenged by the assessee before the first appellate authority as erroneous in law urging the same legal grounds which contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the facts stated and material available before him, that has not been done either by the assessing authority or by the first appellate authority. Therefore, the Tribunal is perfectly justified in setting aside the concurrent finding of the first appellate authority on that contentious point, in the absence of additional evidence the Tribunal must have come to the conclusion that the matter requires reconsideration, hence the same was remanded back to the assessing authority to give an opportunity to the assessee which is in compliance with the principles of natural justice. Therefore, we are of the view that the first substantial question of law framed in this appeal placing reliance on the various provisions of the Act and decisions referred to in the earlier paragraph of this judgment by the learned counsel for the appellant does not arise for our consideration for the reason that we have to accept the conclusions arrived at by the Tribunal in its judgment on the contentious point that arose for its consideration for remanding the matter to the Assessing Officer. We are in respectful agreement with the finding of fact recorded by the Appellate Tribunal with regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be held that section 80AB was enacted to declare the law as it always stood in relation to the deductions to be made in respect of the income specified under the head "C" in Chapter VT-A of the Act. The special deduction under section 80HH is allowable on the net income and not the gross income." 16. The above referred judgment is followed by this court in its subsequent unreported decision in I. T. A. Nos. 433-444 of 2002 c/w I. T. A. Nos. 3047 of 2005 and 6/2004 disposed of on September 21, 2007. In the instant case, on a perusal of the order passed by the first appellate authority after careful examination of the concurrent finding of fact recorded by it is that the assessee has preferred claim without furnishing the details with regard to expenses incurred for earning gross income for the assessment years in question. In the absence of non-furnishing of particulars by the assessee to claim the benefit before the Assessing Officer for the purpose of section 80-0, the same cannot be accepted by us. The said finding of fact recorded by the first appellate authority has been set aside by the Tribunal following the earlier decision in the case of M. N. Dastur and Co. (P.) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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