2014 (7) TMI 1271 - HC - Income Tax

Court dismisses Appeal challenging deduction under Section 80JJA & affirms decision on bad debts treatment.

The Court dismissed the Appeal challenging the deduction under Section 80JJA of the Income Tax Act, as it found no substantial question of law raised. ... Allowability of deduction under Section 80JJA - Held that:- In relation to that, in the case of the very Assessee, this Court in the case of Commissioner of Income Tax v/s Smt. Padma S. Bora [2012 (12) TMI 666 - BOMBAY HIGH COURT] has dealt with the identical questions. The Commissioner of Income Tax's Appeal was dismissed by this Court finding that the same does not raise any substantial question of law. That was in relation to Assessment Year 2003-2004 and 2004-2005. In the current Assessment Year the Tribunal has adopted identical reasoning. In such circumstances, we do not think that the Appeal raises any substantial question of law. The Same, therefore, deserves to be dismissed. Allowability of bad debts claim - Held that:- The Assessee is engaged in the business of money lending. Merely because the Assessee does not have license to conduct this business, does not mean that the claim of bad debts should be denied. The Commissioner has in relation to this claim held in his order at the Tribunal's order in the case of B. N. Khandelwal v/s Income Tax Officer [2007 (5) TMI 352 - ITAT MUMBAI] would assist the Assessee inasmuch as the amount is lent in ordinary course of money lending business. It was written off after making efforts to recover. The effort was unsuccessful. In such circumstances, the Tribunal did not commit any error in reaffirming the conclusion of the Commissioner of Income Tax (Appeals) and which is to be found in paragraph no. 4.2 of the Commissioner's order. The present Appeal also is continuation of the attempt by the Revenue to question such findings. The findings being purely of fact, the same do not raise any substantial question of law. The Appeal is, therefore, dismissed. Issues:1. Allowability of deduction under Section 80JJA of the Income Tax Act.2. Treatment of bad debts in relation to money lending business.Analysis:1. The judgment addresses the issue of deduction under Section 80JJA of the Income Tax Act. The Court noted that the Appeal challenged the order of the Commissioner of Income Tax (Appeals) dated 17th August 2009, which partly allowed the Assessee's Appeal. The Tribunal, in the current Assessment Year, adopted reasoning similar to previous cases, leading the Court to conclude that no substantial question of law was raised. As a result, the Appeal was dismissed.2. The second issue pertains to the treatment of bad debts in the context of a money lending business. The Court examined the claim for bad debts made by the Assessee, emphasizing that the lack of a license for the money lending business should not automatically disqualify the claim. The Commissioner had previously granted the claim, stating that the amount was lent in the ordinary course of business, efforts were made for recovery, but they were unsuccessful. The Tribunal's reproduction of the Commissioner's findings was deemed erroneous by the Appellant, but the Court found that this did not give rise to a substantial question of law. The Court upheld the Tribunal's decision to reaffirm the Commissioner's conclusion regarding the bad debts claim, dismissing the Appeal as the findings were factual and did not raise any legal questions.In conclusion, the judgment delves into the issues of deduction under Section 80JJA of the Income Tax Act and the treatment of bad debts in a money lending business. It highlights the Court's assessment of the facts and legal arguments presented, ultimately leading to the dismissal of the Appeal on the grounds that no substantial question of law was raised in either issue.