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TMI Blog2019 (1) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... n of bad debts - Held that:- Bad debts were actually written off in the books of accounts that can be seen from the books of account for Assessment Year 2010-11. The said has been accepted by the Revenue. Therefore, the decision in case of TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT] as well as the Circular No. 12/2016 dated 30/5/2016 is applicable in the present case. The CIT(A) as well as the Assessing Officer were not correct in making addition of ₹ 1,55,00,500/- under the head bad debts which were claimed by the assessee in the profit and loss account. - Appeal of the assessee is allowed. - I.T.A. No. 4530/DEL/2015 - - - Dated:- 18-1-2019 - SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. Salil Aggarwal And Sh. Shailesh Gupta, Adv For The Respondent by Ms. Shefali Swaroop, CIT DR ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against the order dated 25/3/2015 passed by CIT(A)-II, New Delhi for Assessment Year 2011-12. 2. The grounds of appeal are as under:- 1. That the learned Commissioner of Income Tax (Appeals) has grossly erred in law and on facts by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as such, the conditions as envisaged under section 36(l)(vii) of the Act were duly complied by the assessee - appellant and thus, the said claim of bad debt should have been allowed to the assessee - appellant. 2.2. That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts in relying on the judgment which is totally inapplicable to the facts of the case of the appellant company and also, the disallowance so sustained by learned CIT (A) is based on complete mis - application of the provisions of law and is based on mere suspicion and surmises and should be deleted as such. 3. That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining addition in the hands of assessee company, without giving any fair and proper opportunity of being heard to the appellant company, thereby, violating the principles of natural justice. 3. The assessee company is a 100% BOU, situated in SEZ at Noida and availing all the benefits Available to the assessee as per the SEZ Act, 2005. The assessee is engaged in the business of manufacturing of scaffoldings and there export directly. Besides this at the certain point of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(A). 7. We have heard both the parties and perused the material available on record. As regards Ground Nos. 1 to 1.3, the same are covered in assessee s own case for Assessment Year 2008-09 and 2009-10 by the Tribunals decision. The Tribunal held as under:- 6. We have heard the rival contentions and perused the facts of the case. The only issue in the ground Nos. 1 to 2.3 is whether Section 51(1) of SEZ Act, 2005 has the overriding effect over the income Tax Act. Before we decide the issue the definition u/s 2(m) of export under the Special Economic Zones Act, 2005 read as under:- ( m) export means ( i) taking goods, or providing services, out of India, from a Special Economy Zone, by land, sea or air or by any other, whether physical or otherwise or ( ii) supplying goods, or providing services, from the Domestic Tariff area to a Unit of Developer; or ( iii) Supplying in the same or different Special Economic Zone. 7. Also Section 51(1) in the provision of SEZ Act, 2005 is defined as under:- 51(1) Act to have overriding effect.-The provisions of this Act shall have effect notwithstanding anything inconsistent the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtue of any instrument having effect by virtue of any law other than this Act. The provision of SEZ Act will prevail. The Hon'ble Apex Court in the case of Tax Recovery Officer vs. Custodian Appointed under the Special Court Trial of Offences Relating to Transaction in Securities Act, 1992 [2007] 293 ITR 369/163 Taxman 441 had an occasion to consider the meaning of language employed in section 13 of the Special Court Act. In section 13 of the Section Court Act, it was state that provision of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. The Hon'ble Apex Court held that there can be no manner of doubt that the provision of Special Court Act wherever they are applicable shall prevail over the provision of the income tax Act. The Hon'ble Delhi High Court in the case of CIT vs. Vasisth Chay Vaapar Ltd. 330 ITR 440 held that when there is a provision in another enactment which contains a non obstente clause than that would override the provisions of the Income Ta Act. Thus one will have to consider the implication of section 51 of the SEZ Act. It means that anything inconsistent to the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and found that trading done by the assessee is a service and, therefore, deduction under Section 10AA is allowable. We further noted that on similar facts in case of Goenka Diamonds and Jewellery Limited (supra), the Jaipur Bench of the Tribunal has discussed the issue in detail. The provisions of Section 51 of SEZ Act were also considered. The decision of the Hon'ble Supreme Court in the case of Tax Recovery Officer Vs. Custodian Appointed Under The Special Court, reported in the case of 211 CTR 369 (SC) and the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Vasisth Chay Vyapar Ltd., reported in 238 CTR 142 (Delhi), were also taken into consideration and thereafter it was concluded that in view of the Instruction No.1 of 2006, dated 24- 3-2006 as modified by Instruction No.4 of 2006, dated 24- 5-2006 issued by the Ministry of Commerce Industry, Government of India and the definition of service given in the SEZ Act, 2005, which overrides the word 'service' accruing in Section 10AA by virtue of Section 51 of the SEZ Act. The assessee engaged in trading in nature of re-export of imported goods and for the same the assessee was entitled deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 2(m) of the Special Economic Zones Act, 2005 exports includes providing services or supplying goods from one unit to another in the same or different Special Economic Zones. Accordingly, the view taken up by the Ld.CIT(A) and the A.O cannot hold good and is directed to be reversed. Thus, grounds No. 1 to 2.3 of the assessee are allowed. Thus, the issue is squarely covered in favour of the assessee in assessee s own case and the facts of the present Assessment Year are identical to that of earlier years. Therefore, Ground No. 1 to 1.3 are allowed. 8. As regards Ground No.2 to 2.2, the bad debts were actually written off in the books of accounts that can be seen from the books of account for Assessment Year 2010-11. The said has been accepted by the Revenue. Therefore, the decision of the Hon ble Apex Court in case of TRF Ltd. (supra) as well as the Circular No. 12/2016 dated 30/5/2016 is applicable in the present case. The CIT(A) as well as the Assessing Officer were not correct in making addition of ₹ 1,55,00,500/- under the head bad debts which were claimed by the assessee in the profit and loss account. Therefore, Ground Nos. 2 to 2.2 are allowed. 10. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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