9911796707
TMI Blog1980 (11) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... s.3,76,004 but at the time of hearing of the appeal, the assessee's ld. counsel did not seriously advance any argument in support of the objection beyond stating that the order of the CIT(a) on this point disallowance the items of expenses concerned is in accordance with the ratio of the Special Bench order of the Tribunal in J. Hemchand Co.'s case (ITA Nos. 3255 3330 (Bom)/76-77) but that the assessee does not wish to give up its case but to keep the claim alive. We have also not been furnished with the particulars of the items which make up the total of Rs. 3,76,004 and all that we can see from the order of the CIT(a) is that he has disallowed the relief on the following items of expenses: 1. Clearing and forwardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, that the dispute about the claim of bad debts relates to the entire value of the goods despatched in both the names which were to the same party. Although it is seen from the details of the bank reference Nos. and the dates mentioned therein that these relates to the period commencing from March 1974 and ending with Sept., 1974, it appears that the assessee came to believe that in view of the deteriorating economic situation in France and the large stocks of the goods sent by the assessee to the party concerned remaining unsold, the payments in regard to induce the party to expedite the payment offered 20 per cent discount against their demand of 50 per cent discount on all outstanding dues subject to the Reserve Bank's approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee itself had instituted proceedings against the party concerned for recovery of the full amount and therefore there was no effective agreement to write off 50 per cent of the claim as irrecoverable and further as the proceedings by way of suit against the party concerned were pending, the claim for write off was premature. 4. On the appeal, the CIT (a) considered that there were two distinct claims involved, one relating to one Jean Pierre in respect of Rs. 8,60,057 and another relating to M/s Club Michael Paris in respect of Rs. 1,39,882.78. He held that so far as the first item is concerned, since the suit was filed some time in 1975 for the full amount, the write off cannot be allowed till a final determination of the suit and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's ld. counsel submitted that the mere fact that the assessee having filed proceedings in suit for recovery of the full amount does not necessarily mean that it had not given up the hope of recovering the whole of the amount. As a matter of fact, it was pointed out that it was only because the party concerned failed to make the payment by instalment after one payment, that the assessee was compelled to take the recovery proceedings and since it had decided to take legal proceedings in this connection, it had considered it prudent to agitate its claim for the full amount as well but at the same time, it had pleaded that in any case it should be entitled to the 50 per cent agreed to by the party. 6. Having considered the facts and the cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 per cent agreed to by the foreign party, it had paid only one instalment necessitating the assessee to take recovery proceedings for the balance. In the context of these facts, the mere claim of the assessee for full amount in the legal proceedings instituted against the foreign party cannot mean that the assessee still hoped to recover the full amount and therefore the claim is premature. It is but common business prudence that when forced to take legal steps against the defaulting customer, the assessee must make as tall a claim as possible which it has done by not only claiming the full amount but also by impleading the bank as a defendant. The fact, however, has no significance to the decision of the question arising before us. For ..... X X X X Extracts X X X X X X X X Extracts X X X X
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