As per section 36(1)(vii) of the IT bad debts written off was liable to be allowed

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- “B” CALCUTTA

Before Shri Pramod Kumar, Accountant Member

and

Shri George Mathan, Judicial Member

ITA No. 1421/Kol/2011

Assessment Year: 2006-07

D.C.I.T,Circle-12, Kolkata

(APPELLANT)

-Versus-.

M/s. Sky B (Bangla) Pvt. Ltd

PAN: AAHCS 0749Q

                                                                 (RESPONDENT)

For the Appellant: Shri D.J. Mehta, ld.CIT/DR

For the Respondent: Shri M.Satnaliwala, FCA, ld.AR

Date of Hearing: 19-06-2012

Date of Pronouncement: 19-06-2012

ORDER

Shri George Mathan, Judicial Member

This is an appeal filed by the revenue against order of the learned Commissioner of Incometax

(Appeals), XII, Kolkata in appeal no. 204/XII/Cir-12/08-09 dated 01-07-2011 for the assessment

year 2006-07.

2. In this revenue’s appeal, the revenue has raised following grounds of appeal:-

1. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 17,32,492/- towards provision of sundry debtors debited in P & L A/c.

2. Whether, on the facts & in the circumstances of the case, Ld. CIT(A) is correct in deleting the disallowance of Provision of bad debt of Rs.25,00,000/- where the assessee added back of Rs.25,00,000/- as Provision of Sundry debtor not provision of bad debt.

3. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting disallowance of Rs.22,85,876/-on account of bad debt written off without bringing any evidence of commercial expediency of the assessee. “

3. Shri D.J. Mehta, learned CIT/DR represented on behalf of the revenue and Shri M.Satnaliwala, FCA, learned AR represented on behalf of the assessee.

4. It was submitted by the learned CIT/DR that the only issue in this revenue’s appeal was against the action of the learned Commissioner of Income-tax (Appeals) in deleting the disallowance of bad debts. It was submitted that no commercial expediency has been seen by the learned Commissioner of Income-tax (Appeals) before deleting the disallowance of bad debts. He vehemently supported the order of the Assessing Officer.

5. In reply, Shri M.Satnaliwala, FCA, learned AR submitted that the ratio was covered by the decision of the Hon’ble Bombay High Court in the case of Director of Income-tax (International

Taxation) Vs. Oman International Bank reported in (2009) 313 ITR 128 (Bombay). It was submitted that the assessee had written off bad debt in the books and in view of amendment of section 36(1)(vii) of the I.T. Act 1961 the bad debt, which has been written off was liable to be allowed.

6. We have considered the rival submissions. A perusal of the order of the learned Commissioner

of Income-tax (Appeals) clearly shows that the assessee had written off bad debt in the books. Further, it is noticed that the Learned Commissioner of Income-tax (Appeals) had followed the decision of the Hon’ble Bombay High Court in the case of Director of Income-tax (International

Taxation) Vs. Oman International Bank (refer to supra) on this issue. The finding of the learned Commissioner of Income-tax (Appeals) that the bad debt written off in the books has not been disputed by the revenue. In the circumstances, the finding of the learned Commissioner of Incometax (Appeals) on this issue is on right footing and does not call for any interference. In the

circumstances, the appeal of the revenue stands dismissed.

7. In the result, the appeal of the revenue stands dismissed

THIS ORDER IS PRONOUNCED IN OPEN COURT ON Dt 19-06-2012

Date 19-06-2012

                                                    Sd/-                              Sd/-

                                            Pramod Kumar,        George Mathan,

                                         Accountant Member    Judicial Member

*PP/SPS

Copy of the order forwarded to:

1. The Appellant: DCIT,Circle-12, Aaykar Bhawan, 7th Fl.,P-7, Chowringhee Sq., Kol-69.

2 The Respondent- M/s. Sky B (Bangla) Pvt. Ltd. 225, A.J.C Bose Road, Kol-20

3. The CIT,

4. The CIT(A)

5. DR, Kolkata Bench

6. Guard file.

True Copy,

By order,

Asstt Registrar