9911796707
TMI Blog2018 (12) TMI 1558X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 133(6) to seven sundry debtors returned unserved. The assessee did not take corrective measures to produce confirmations from these seven sundry debtors either during the assessment proceedings or during the appellate proceedings. Hence we hold that the primary onus and the three ingredients of section 68 has not been discharged by the assessee in the instant case. - decided against assessee Claim of bad debts u/s 36(1)(vii) - alternative argument stating that in case if the said credit to the account of the sundry debtors are not believed to be genuine by the department, it cannot be disputed that the assessee had reduced the debtors’ account balances in its books of accounts which effectively amounts to write off of debts - Held that:- As relying on M/S. D.K. INDUSTRIES VERSUS I.T.O WARD 34 (3) , KOLKATA [2016 (5) TMI 850 - ITAT KOLKATA] we hold that the assessee in the instant case is entitled for deduction as bad debts based on alternative argument advanced by the ld. AR. Accordingly, grounds raised by the revenue are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... s and addresses of the debtors and has filed a statement showing particulars of account in their names during this year, recovery of amounts during the year and closing balance outstanding as on 31.03.2005 to 31.03.2009, profit and loss account for the same period, list of sundry debtors, confirmatory certificates and such other particulars to prove that these sums represent realization from debtors. Accordingly, it was pleaded that the provisions of section 68 per se are not at all applicable in the facts of the instant case as it pertains to trade receipts and not loan receipts or share capital receipts. The assessee also placed reliance on certain decisions in support of these contentions. The Ld. CIT(A) deleted the addition by observing as under: "12. All the grounds of appeal are directed against the addition of ₹ 1,89,34,232/- made by the A.O. I have given careful consideration to the contention of the appellant and have also perused the order of the A.O. and relevant documents. I find, there are sufficient force to the arguments placed by the Id. counsel for the appellant. Before dwelling upon the impugned issue related to addition of ₹ 1,89,34,232 it may be ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debtors. In my view the Assessing Officer acted upon mere assumption that those sums credited to the accounts were not genuine transactions. Mere suspicion cannot take the place of proof. Accordingly, the overall circumstances also do not suggest that any adverse inference should be drawn against the appellant. The same procedure was followed by the appellant in the previous year relevant to the asst. year 2006-07 and the realization of money from the sundry debtors was brought into controversy in the assessment. The dispute cropped up for the asst. year 2006-07 was resolved by the order of the Hon'ble Tribunal in the appeal in ITA No-371/Kol/2010 preferred by the appellant. The relevant observation of the Hon'ble Tribunal in para 6 of the said order read as under : " ... The contention of assessee that the realization made by the assessee in cash from the sundry debtors and subsequent payments to the sundry creditors are duly reflected in the books of accounts are not rejected by the Revenue authorities for the assessment year 2006-07 which is under dispute. We find no justification on the part of the Revenue to make either additions of ₹ 25,00,000 by AO or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, the relevant facts, material on record and citation relied upon I am of opinion that the addition is not sustainable in law. I find that the issue is squarely covered in favour of the appellant vide order dated 9.11. 2012 of the jurisdictional Tribunal in ITA No- 371/Kol/2010 in the appellant's own case for the A.Y.2006-07. Respectfully following the aforesaid order of the Honourable Tribunal in the appellant's own case, the addition of ₹ 1,89,34,232/ - made by the Assessing officer is deleted." Aggrieved the revenue is in appeal before us. 5. We have heard the rival submissions. At the outset, we find that there were certain cash deposits made in the bank account of the assessee which were explained as realization made from various debtors of the assessee during the year under consideration. We hold that except crediting the cash to the credit of various debtors' account in the ledger accounts of the assessee, we find that the assessee had not produced any other corresponding evidences from external sources such as from debtors' confirming this fact of having settled their dues to the assessee in cash. The confirmatory certificate stated to have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2009-10 vide pages 42 to 56 ; (iii) copy of assessment order u/s 143(3) of the Act dated 7.12.2010 for Asst Year 2008-09 vide pages 57 to 72 ; (iv) Copy of intimation u/s 143(1) of the Act dated 27.7.2001 for Asst Year 1999-2000 vide page 73 ; (v) copy of tax audit report together with audited accounts for Asst Year 1999-2000 vide pages 74 to 105 ; (vi) copy of IT return acknowledgement and assessment order us 143(3) of the Act for the Asst Year 1998-99 vide pages 106 to 113 and (vii) copy of audited balance sheet as on 31.3.1998 together with tax audit report vide pages 114 to 140 . 6.1. We find that the addition has been made the Learned AO on the ground that the assessee could not obtain the confirmation from M/s Raj Enterprises and M/s Brand Alloys Ltd. It is not in dispute that the assessee had indeed furnished confirmation from Mr.Vinay Kumar Baid together with his PAN details which fact is also mentioned in the assessment order. The assessee had claimed that the source of cash deposits are nothing but realization of loan dues from the three parties in cash which were deposited into the bank account of the assessee. It is not in dispute that the assessee had indeed requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as mutually agreed upon by the partners. The same clause is present in the original partnership deed dated 1.4.1994 vide clause 3 and also in reconstituted partnership deeds dated 1.4.2007 and 1.4.2008. This goes to prove that the assessee is indeed engaged in money lending business also. We also find that the assessee had duly shown the amounts receivable from the aforesaid three parties (i.e Raj Enterprsies, Brand Alloys Ltd and Vinay Kumar Baid) as loans and advances in the balance sheet as on 31.3.2008 (immediately preceding asst year) with the balances of ₹ 36,50,036/- in total of these three parties. This goes to prove that the assessee had continued its money lending business. During the asst year under appeal, the balances from these three parties are shown as nil in view of recoveries made by the assessee from them, according to assessee , which fact is also evident from the balance sheet as on 31.3.2009 filed in the paper book. However, the realization of monies from these loan parties have been disbelieved by the Learned AO and we have already given our finding in that regard hereinabove in favour of the revenue. But one more fact cannot be swept under the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
