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TAXAP/459/2009 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 459 of 2009
=========================================================
COMMISSIONER
OF INCOME TAX-III - Appellant(s)
Versus
SATYANARAYAN
J KABRA (HUF) - Opponent(s)
=========================================================
Appearance
:
MRS
MAUNA M BHATT for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MR.JUSTICE RAJESH H.SHUKLA
Date
: 01/02/2010
ORAL ORDER
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
The Commissioner of
Income-tax III, Ahmedabad has filed this Tax Appeal under Section
260A of the Income-tax Act, 1961 for the assessment years 2001-02
proposing to formulate the following substantial question of law for
determination and consideration of this Court;
Whether
the Appellate Tribunal is right in law and on facts in confirming
the order passed by the CIT(A) in restricting the disallowance made
by the Assessing Officer in respect of bad
debts amounting to Rs.22,00,936/- to Rs.1,27,369/- ?
Heard Mrs.Mauna Bhatt,
learned Standing Counsel appearing for the Revenue and perused the
order passed by the authorities below. The Assessing Officer while
framing the issue under Section-143(3) for the assessment years
2001-02 disallowed the assessee’s claim for bad debt of
Rs.22,00,936/-. Being aggrieved by the said order the respondent
preferred an Appeal before the CIT(A) who vide his order dated
28.7.2004 has partly allowed the Appeal of the assessee by
restricting the disallowance of bad debt to the tune of
Rs.1,27,369/-. The Revenue being aggrieved by the said order of the
CIT(A) has preferred an Appeal before the Tribunal and the Tribunal
has confirmed the order of the learned CIT(A) Appeal. It is this
order of the Tribunal which is under challenge in the present Tax
Appeal.
The learned CIT(A) has at
length discussed the issue of bad debt and after making detailed
party-wise analysis, has come to the conclusion that the assessee
has rightly written off the bad debt qua two parties, namely, (1)
Shri Dhiren Vora and (2) M/s. D. M. Investment. As a matter of fact,
the CIT(A) has observed that though the principal amount was
received by the respondent assessee, interest could not be received
for two to three years and after taking follow up action it was
found that the amount could not be released, the same was written
off during the previous year relevant to the assessment year in
question. In case of M/s.D. M. Investment continuously for four to
five years though the interest accrued was added to the total
outstanding amount, the same could not be received and hence
ultimately the amount was written off. The CIT(A), therefore, came
to the conclusion that keeping in view of the totality of the facts
and circumstances of the case as well as the various judicial
pronouncements put forth in the submissions, the Assessing Officer
was not justified in making the disputed disallowance of
Rs.1,00,603/- being the debit balance written off of the party Shri
Dhiren Vora and Rs.19,72,964/- being the debit balance written off
of the party M/s. D. M. Invetment.
While confirming the
order of the CIT(A) the Tribunal has observed that the CIT(A) after
considering the submissions and evidence submitted by the assessee
has given a clear cut finding that the assessee has proved that the
debt has become bad during the year in respect of above referred two
parties. The Tribunal further observed that the CIT(A) has duly
verified necessary details complied in the paper-book. It is further
observed that the decision of this Court in the case of CIT Vs.
Ahmedabad Electricity Co. Ltd., 262 ITR 97 is clearly applicable to
the facts and circumstances of the case and no contrary evidence was
there before the Tribunal which may prove that the debt has not
become bad during the year.
Since there is concurrent
finding of fact given by both the authorities below, we are of the
view that no substantial question of law arises out of the order of
the Tribunal. We, therefore, dismiss this Appeal.
(K. A. PUJ, J.) (RAJESH H. SHUKLA, J.)
kks
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