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TMI Blog2007 (7) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... "Project advances" amounted to Rs. 15,18,083. It was the case of the assessee before the Assessing Officer that the aforesaid amounts were given to the various parties in connection with the new project being set up by the assessee. It was also claimed by the assessee that the aforesaid amounts had become irrecoverable, as they were very old and therefore they were written off in the accounts. The Assessing Officer examined the aforesaid explanation and held that the aforesaid amounts were never taken into account in computing the total income of the assessee either in earlier years or in the previous year relevant to the assessment year under appeal. According to the Assessing Officer, the aforesaid advances were admittedly given for new project that was being set up by the assessee. The Assessing Officer therefore held that the primary condition of section 36(2) was not satisfied and therefore he disallowed the claim of the assessee to the extent of Rs. 15,18,083. In addition to the aforesaid, the assessee had also claimed bad debt of Rs. 34,51,801 being the amount given to the parties for supply of packing materials and raw materials. The assessee had written back a sum of Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng ITA No. 1948/Mum./2003 for assessment year 1998-99 filed before this Tribunal. The Tribunal considered the aforesaid order of the CIT(A) restored the matter to his file for a fresh decision with the following observations : "8. As regards the other claim of the assessee seeking to write off Rs. 19,62,171 being advances for purchase of raw materials, plant and machinery and for meeting project expenses, etc. we find that the ld. CIT(A) has allowed the claim of the assessee on the ground that mere writing off of advances is sufficient for claiming the deduction. We find that similar issue has recently come up for consideration before the Hon ble Madras High Court in South India Surgical Co. Ltd. v. ACIT (Judgment dated 6-1-2006 in Tax Case No. 40 of 2002 in Appeal No. 17 of 2002 for assessment year 1996-97). In the aforesaid case also the assessee had supplied goods to reputed hospitals but did not receive the payments and therefore had written off the amount. It was found that the assessee in that case was carrying on business with all those debtors and receiving payments. The Hon ble High Court held that unilateral act on the part of the assessee to write off the amounts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 (Mum.) and other orders of the Tribunal. 6. It is claimed by the assessee that the order passed by this Tribunal on 31-8-2006 suffers from the aforesaid mistakes and therefore the order should be amended and the claim of the assessee allowed. 7. In reply, the ld. Departmental Representative submitted that the mistakes pointed out by the assessee were not at all apparent from the record. According to him, the assessee was seeking a review of the Tribunal s order, which is not permissible under section 254(2) of the Income-tax Act. He supported his submissions by reference to the decision of the Hon ble Bombay High Court in CIT v. Ramesh Electric Trading Co. [1993] 203 ITR 497. 8. We have heard the parties. The first submission of the assessee in the MA is that it has claimed the impugned loss as trading loss under sections 28 37 and hence the Tribunal was not justified in considering the claim of the assessee under section 36(1)( vii )/36(2) of the Income-tax Act. In this connection, the Tribunal has stated in para 8 of its order dated 31-8-2006 that the impugned "amounts written off by the assessee cannot be allowed under the general provisions of section 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere writing off of the advances given for purchase of plant and machinery for setting up a new project would at all be eligible for treatment as trading loss. 9. Second submissions of the assessee is that this Tribunal has committed a grave error in preferring the judgment of Hon ble Madras High Court in South India Surgical Co. Ltd. s case ( supra ) over the decision of a Special Bench of this Tribunal in Oman International Bank SAOG s case ( supra ). According to him, the decision of a Special Bench of this Tribunal will prevail over the judgment of Hon ble Madras High Court in South India Surgical Co. Ltd. s case ( supra ). The plea taken by the assessee can better be answered by reference to the judgment of Hon ble Supreme Court in Asstt. CCE v. Dunlop India Ltd. [1985] 154 ITR 172 in which it has been held that the better wisdom of the Court below must yield to the higher wisdom of the Court above. The Hon ble Supreme Court has further observed that in a hierarchical system of Courts, which exists in our country, it is necessary for each lower tier to accept loyally the decision of the higher tiers. It can be nobody s case that High Courts are not superior Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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