2009 (5) TMI 842 - AT - Income Tax

Tribunal Allows Additional Bad Debt Deduction Claim; Case Sent Back for Fresh Assessment Despite Goetze Ruling Limitations.

Franco-Indian Pharmaceuticals Pvt. Ltd. Versus Income-tax Officer

Franco-Indian Pharmaceuticals Pvt. Ltd. Versus Income-tax Officer - [2010] 3 ITR 754 The Appellate Tribunal ITAT MUMBAI delivered an order regarding an appeal by the assessee against the Commissioner of Income-tax (Appeals) for the assessment year 2004-05. The assessee, involved in manufacturing and marketing bulk drugs formulations, initially declared a total income of Rs. 24,57,20,103. The Assessing Officer later assessed the total income at Rs. 24,73,96,400. The assessee claimed a deduction for bad debts due to a clerical error in the return. Both the Assessing Officer and the Commissioner of Income-tax (Appeals) rejected this claim, citing the need for a revised return to make such a claim.During the appeal, the sssessee's counsel argued that recent decisions by the Tribunal and Punjab and Haryana High Court allowed claims made by way of a letter during assessment proceedings, even without a revised return. The counsel also referred to various decisions supporting the Assessing Officer's duty to allow deductions suo motu. The counsel further sought to make a fresh claim before the Tribunal, emphasizing that the Supreme Court's decision in Goetze (India) Ltd. did not limit the Tribunal's power to admit additional claims.The Tribunal, after considering all arguments and case law presented, held that the Tribunal's powers were not restricted by the Goetze decision and admitted the assessee's additional claim. The case was remanded to the Assessing Officer for fresh adjudication on the merits of the deduction claim. The appeal was allowed for statistical purposes. The order was pronounced on May 14, 2009.