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TMI Blog2016 (3) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... .H. Naniwadekar For The Revenue : Shri Hitendra Ninawe ORDER PER VIKAS AWASTHY, JM : ITA No. 870/PN/2014 has been filed by the Revenue against the order of Commissioner of Income Tax (Appeals)-III, Pune dated 19-02-2014 for the assessment year 2009-10. The assessee has filed cross appeal against the said order of Commissioner of Income Tax (Appeals) in ITA No. 919/PN/2014. 2. The facts of the case as emanating from the records are: The assessee company filed its return of income for the impugned assessment year on 20-09-2009 declaring income of ₹ 3,89,73,479/-. The case of the assessee was selected for scrutiny and accordingly notice u/s. 143(2) was issued to the assessee. During the course of scrutiny assessment proceedings, the Assessing Officer made certain additions/disallowances in the income returned by the assessee and assessed the total taxable income at ₹ 5,40,22,640/-. Aggrieved by the assessment order dated 09-12-2011, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide impugned order partly accepted the appeal of the assessee. Now, both the Revenue and the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of the assessee. The ld. AR placed on record a copy of the order of the Coordinate Bench of the Tribunal in ITA No. 1623/PN/2012 and ITA No. 1639/PN/2012 (supra). 6. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. The Department has impugned the order of Commissioner of Income Tax (Appeals) by raising following grounds: 1. On the facts and in the circumstances of the case, learned CIT(A) has erred in deleting the addition made by the Assessing Officer by disallowing the assessee's claim of bad debts amounting to ₹ 40,45,951/-. 2. On the facts and in the circumstances of the case, learned CIT(A) has erred in holding that after the amendment to section 36(1)(vii) (w.e.f. 01.04.1989), the assessee need not demonstrate to the tax authorities that debt has become bad whereas the real objective of this amendment was to eliminate the dispute as to the year in which a bad debt was to be allowed. 3. On the facts and in the circumstances of the case, learned CIT(A) has not appreciated that even after the amendment w.e.f. 01.04.1989, the allowance is only in respect of 'bad deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years before the Hon ble Supreme Court were 1990-91 and 1993-94, i.e. both post 01.04.1989. As per the Hon ble Supreme Court, prior to 01.04.1989, every assessee had to establish, as matter of fact, that the debt advanced by the assessee had, in fact, become irrecoverable. Further, explaining the provisions of section 36(1)(vii) of the Act as amended w.e.f. 01.04.1989, the Hon ble Supreme Court observed that under the amended provisions it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough that the bad debt is written-off as irrecoverable in the accounts of the assessee. In order to emphasize the point sought to be made out, we reproduce hereunder the relevant portion of the judgment of the Hon ble Supreme Court in the case of T.R.F. Ltd. (supra) :- 2. .. Prior to April 1, 1989, every assessee had to establish, as a matter of fact, that the debt advanced by the assessee had, in fact, become irrecoverable. That position got altered by deletion of the word established , which earlier existed in section 36(1)(vii) of the Income-tax Act, 1961 ( the Act , for short). 3. For the sake of clarity, we rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant year also. So, however, the amounts that have been written-off, as detailed in the Paper Book, are specific bills or part of specific bills raised by the assessee, which have not been collected from such parties. Therefore, merely because assessee had dealing with that particular concern or that the concerns are otherwise financially viable does not distract from the fact that the amounts in question, which are individually of small values, were specific bills of the assessee or part thereof, which were outstanding for a long period of time and therefore considering the aforesaid aspect, on facts, the judgment of the assessee of treating them as irrecoverable cannot be faulted. Thus, in our considered opinion, the claim of the assessee for writing-off of such amounts u/s. 36(1)(vii) of the Act as irrecoverable was fair and proper. 13. In so far as the judgment of the Hon ble Madras High Court relied upon by the Revenue in the case of South India Surgical Co. Ltd. (supra) is concerned, the same, in our view, does not help the Revenue. The Hon ble Supreme Court in the case of T.R.F. Ltd. (supra) has opined that post 01.04.1989, it is no longer necessary for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts along with explanations were already submitted in this behalf. 10. The ld. AR submitted that in order to discharge its Corporate Social Responsibility the assessee had contributed ₹ 65,310/- towards Bihar Relief Fund. In support of his submissions, the assessee referred to pages 1 to 3 of the paper book. The ld. AR submitted that a perusal of Credit Note dated 15-12-2008 and Tax Invoice dated 19-11-2008 would show that the assessee has incurred expenses for supply of milk to flood affected parts of Bihar. 10.1 In respect of disallowance of computer repairs expenses amounting to ₹ 8,87,103/- the ld. AR contended that the assessee had placed on record the details of expenditure before the Assessing Officer. However, the same were not considered at the time of assessment. The ld. AR referred to the bills and invoices at pages 4 to 62 of the paper book in support of his submissions. The Commissioner of Income Tax (Appeals) has also rejected the contention of the assessee in a mechanical manner without appreciating the bills and invoices furnished by the assessee. 10.2 As regards disallowance of un-reconciled balance of ₹ 35,000/- of sundry creditors the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has assailed the disallowance of computer repairs expenses amounting to ₹ 8,87,103/-. The contention of the assessee is that the invoices and the bills in support of expenditure were neither considered by the Assessing Officer nor by the Commissioner of Income Tax (Appeals), although, the same were placed on record before them. The assessee has filed bills and invoices of computer repairs at pages 4 go 62 of the paper book. We are of the considered opinion that this issue needs a revisit to Assessing Officer. The Assessing Officer shall verify the bills and invoices furnished by the assessee and thereafter decide the issue afresh, in accordance with law. This ground of appeal by the assessee is allowed for statistical purpose. 14. The third ground raised in the appeal is with respect to disallowance of un-reconciled balance of ₹ 35,000/- of sundry creditors. The contention of the assessee is that the disallowance has been made by considering only one side. There are both positive and negative entries. The assessee has placed on record the details of creditor s balance reconciliation at pages 75 to 78 of the paper book. The contention of the assessee is that benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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