Tribunal upholds CIT(A)'s decision on bad debts claim, dismisses appeal and condones delay.

The Tribunal dismissed both the appeal and cross objections, upholding the decision of the CIT(A) to allow the claim of bad debts written off by the assessee. The delay in filing cross objections was condoned by the Tribunal.

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Issues:
1. Rectification of order u/s 154 regarding claim of bad debts written off.
2. Consideration of fresh material by CIT(A) without giving opportunity to AO.
3. Violation of Rule 46A of IT Rules.
4. Allowability of claim of bad debts written off by the assessee.
5. Ground raised in cross objections regarding non-grant of opportunity of being heard by AO.

Analysis:

Issue 1: Rectification of order u/s 154 regarding claim of bad debts written off
The appeal and cross objections were directed against the order dated 2/3/2015 of the CIT(A) arising from the order passed u/s 154 of the IT Act, 1961. The AO proposed to rectify a mistake in the order related to the claim of bad debts written off by the assessee. The CIT(A) accepted the explanation of the assessee and allowed the claim in respect of the amount. The AO disallowed the claim of &8377; 98,00,327/- by passing the order u/s 154, which was challenged by the assessee.

Issue 2: Consideration of fresh material by CIT(A) without giving opportunity to AO
The Departmental Representative argued that the CIT(A) considered fresh material without giving an opportunity to the AO before allowing the claim of the assessee. It was contended that the assessee failed to furnish requisite details before the AO, whereas new evidence was submitted before the CIT(A). The Departmental Representative claimed a violation of Rule 46A of the IT Rules.

Issue 3: Violation of Rule 46A of IT Rules
The Departmental Representative contended that the CIT(A) violated Rule 46A of the IT Rules by considering fresh material without providing an opportunity to the AO. The argument was based on the submission that the assessee submitted new evidence before the CIT(A) which was not presented before the AO during the proceedings u/s 154.

Issue 4: Allowability of claim of bad debts written off by the assessee
The assessee explained that the amount of &8377; 98,00,327/- was part of the provisions for bad and doubtful debts made in a previous assessment year and was written off in the current year. The assessee reversed the provisions made earlier and claimed the same while computing income. The Tribunal upheld the CIT(A)'s decision to allow the claim, stating that once the assessee has written off the amounts in the books of account, no further proof is required under sec.36(1)(vi).

Issue 5: Ground raised in cross objections regarding non-grant of opportunity of being heard by AO
The assessee raised a ground in cross objections regarding the non-grant of appropriate opportunity of hearing by the AO while passing the order u/s 154. However, the Tribunal found this ground to be infructuous based on the merits of the case.

In conclusion, the Tribunal dismissed both the appeal and cross objections, upholding the decision of the CIT(A) to allow the claim of bad debts written off by the assessee. The delay in filing cross objections was condoned by the Tribunal.

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