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TMI Blog2022 (10) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... , the impugned appeal has already been listed several times and the notice intimating the date of hearing of toady was also sent upon the assessee. At the time of hearing, neither the assessee appeared nor sought any adjustment. Thus, we decided to proceed to adjudicate the issue ex parte to the assessee. 3. The only issue raised by the assessee is that the learned CIT(A) erred in sustaining the disallowances of bad debt written off for an amount of Rs. 20,12,651/- only. 4. The assessee is a partnership firm engaged in the business of cotton ginning and pressing and the other business related thereto. The assessee for the year under consideration i.e. A.Y. 2013-14 has declared gross profit of Rs. 1,20,01,696/- and claimed that business wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO further found that out of 23 debtors, whose balances were written off as bad debt, the notices under section 133(6) of the Act were issued to 10 parties but no response was received except from 2 parties namely M/s Ruchi World Wide Ltd and M/s Bhadresh Trading Corporation. Both the parties submitted that no amount was written off in their books of accounts. M/s Ruchi World Wide Ltd also submitted that there was no outstanding balance remaining as the amount of Rs. 22,969/- written off by the assessee is arising due differences in opening balance. Thereafter the AO requires the assessee to produce remaining parties for verification but the assessee denied for the same. 4.4 Therefore, the AO in view of the above finding was of the opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered from M/s Bhadresh Trading Co. The ledger account of this concern reflected that there was opening balance of Rs.2,29,995/- as on 01.04.2011 and the appellant was selling the goods and receiving the payments regularly from this concern. The appellant has credited an amount of Rs.5,39,029/- on 31.03.2013 and also made TDS of Rs.53,903/-. Thus, it is apparent that the amount of Rs.2,29,995/- is adjusted against the credit of interest made in the ledger account as the ledger account doesn't reflect any financial transactions except the crediting of sale bills. The analysis of this account further reflected that the appellant had made total sales of Rs. 9,95,05,530/- for the two FYs and received the payments of Rs.9,94,25,518/-. Thus, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions had taken place in the earlier year or in subsequent years. Thus, the amount of Rs.83,162/- has been found to be excessively claimed which is on account of interest. Therefore, this debt is not treated as trading debt as the trade debt has already been recovered by the appellant. Considering this aspect of this particular debtor, the disallowance of Rs.2,19,313/- made by the A.O. is confirmed." ********************************************** (o) The appellant has written off debt of Rs.4,53,343/- in respect of debtor viz. M/s Olam Agro India. The copy of ledger account in respect of this concern has revealed that there were sales of Rs.3,64,23,7147-effected during FY 2011-12 and payments were received from this concern dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrecoverable". Therefore, the disallowance of Rs. 2,10,000/- made by the A.O. is required to be confirmed." 6. Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us. 7. The learned DR before us vehemently supported the order of the authorities below. 8. We have heard the learned DR and perused the materials available on record. The provisions of section 36(1)(vii) read with section 36(2) of the Act deals with the deduction of the bad debts. As per the provisions Section 36(1)(vii) any bad debt or part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year, is deductible subject to the condition prescribed under subsection 2 to section 36. The provision of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by restoring to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. Courts are now concerning themselves not merely with the genuineness of a transaction, but with the intended effect of it for fiscal purposes. No one can now get away with a tax avoidance project with the mere statement that there is nothing illegal about it." 8.3 In view of the above, if the assessee was to avail the benefit of the provisions of law by using the colorable devic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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