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TMI Blog2013 (3) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... O.P. Kant, Sr. DR ORDER Per B. Ramakotaiah, A.M. This is an assessee s appeal against the orders of the CIT (A)- V, Mumbai dated 18.3.2010. The assessee is aggrieved on the disallowance of various amounts claimed in the Profit Loss A/c under the head bad debt/ advances written off. In addition the assessee is also objecting to bringing to tax unsecured loans of Rs.36,61,174/- credited to the Profit Loss A/c claiming nontaxable. We have heard the learned Counsel Dr.K.Shivaram and the learned Departmental Representative Shri O.P. Kant. 2. Ground No.1 to 8 are inter-related in the sense that the assessee claimed amount of remission of Rs.4,77,936/-, bad debt of Rs.51,33,489/-, advances written off Rs.4,02,200/- as a deduction after writing off in the books of account. Assessing Officer did not allow on the reason that the assessee has not justified the amounts as covered by the provisions of Section 36(1)(vii) r.w.s. 36(2). The CIT (A) even after considering the legal principles in favour of the assessee confirmed the additions on the reason that the details were not furnished in support of the claims. 3. Before us the paper book containing pages 1 to 184 has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of the remission included the amounts to be received from various concerns which were due for more than 10 years and from customers. These were shown in the balance sheet of earlier years and since the amounts were outstanding for number of years, these were written off in the year. Now the assessee filed number of details supporting the contention that these amounts were receivable which include certain octroi payments which could not be recovered and have been written off. 5.1 It was the submission that most of the amounts were receivable on contracts undertaken earlier but not recovered out of various dues in the last 10 years and accordingly these amounts were written off. Prima facie there seems to be justification in the assessee s claim. However, even though the Assessing Officer had given finding that the assessee could not substantiate its claim by producing necessary documents, We are of the opinion that the issue was not correctly examined by the Assessing Officer. The details filed by the assessee do indicate that the amounts were accounted for in the earlier years in the course of business. However, it is one of the contention that the amounts were receivable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery of the above amounts, these were written off during the year and this satisfies conditions as decided by the decision of the Hon'ble Bombay High Court in the case of DCIT vs. Oman International Bank 313 ITR 128 (Bom) and the principles laid down by the Hon'ble Supreme Court in the case of T.R.F. Limited vs. CIT (2010) 323 ITR 397 (SC). It was further submitted that it was not necessary to establish that the debts have become irrecoverable. Alternate claim was that the amount claimed can also be allowed as loss following the principles laid down by the Hon'ble Bombay High Court judgment in the case of CIT vs. Wockhardt International Ltd 314 ITR 11 (Bom). It was also submitted that both the Assessing Officer and the CIT (A) mistook the account to another contract with the same authority and therefore, the amounts were not allowed. 5.3 After considering the above submissions, we are of the view that this matter require factual examination by the Assessing Officer. There seems to be confusion with reference to the contracts undertaken 10 years back and contracts now being undertaken from the same authority for different projects. As these issues were not examined by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s A/c as income. There is no dispute with reference to the fact that these unsecured loans were not payable. Therefore, assessee has taken them as income in the Profit Loss A/c. Assessing Officer has disallowed various other amounts discussed above in the assessment and reduced the loss from Rs.1.52 crores to Rs.0.92crores. Before the CIT(A) the assessee has raised this issue for excluding the above amount from the computation. The CIT (A) did not allow the claim on the reason that there is no basis for claiming that the said amounts to be excluded and there is no material placed on record to show that the impugned sum was claimed deductible either in the original return or in the revised return. 6.1 Before us the learned Counsel submitted that this issue can be raised as a legal ground and the assessee is entitled to claim the amount as not taxable. Reliance was placed on the decision of the Coordinate Bench decision in the case of Chicago Pneumatic India Ltd vs. DCIT, 15 SOT 252 for the proposition that the Apex Court judgment in the case of Goetze India Ltd vs. CIT 284 ITR 323 does not bar the assessee raising its legal claim before the appellate authorities. Even though the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of the amounts not receivable. The Assessing Officer examined debits only and disallowed the amounts, which were considered in the grounds from 1 to 8 above. Since all the amounts are of similar nature, in the interest of justice, we restore this issue to the file of the Assessing Officer to examine the nature of amount taken to the Profit Loss A/c as credit and see whether the amounts are arising in the course of business. If it arises in the course of business in a trading transaction/contract work, there is justification in bringing it to tax. If it is on capital a/c parameters will apply differently. Therefore, the Assessing Officer is directed to examine the nature of the amounts taken to Profit Loss A/c and give a clear finding after analyzing the respective case law as stated above. This issue is also restored to the file of the Assessing Officer for proper examination on facts. 7. Assessing Officer is free to call for necessary details and give clear finding on all the issue restored to him. Since various details were already placed on record by the assessee before the Assessing Officer at the time of assessment itself, we are of the view that the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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