TaxTMI 
TaxTMI 
2010 (12) TMI 690
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....ew Delhi (in short "the Tribunal") in ITA No. 66/Del/2001, relating to the assessment year 1997-98. The appeal was admitted for determination of the following substantial questions of law by this Court: "1- Whether on the facts and circumstances of the case Hon'ble ITAT was right in law in confirming the order of CIT(A) deleting the addition of Rs. 18,40,549/- made by the AO on account of bad debts when the partners of the firm failed to produce the books of account? 2- Whether on the facts and circumstances of the case Hon'ble ITAT was right in law in confirming the order of CIT(A) deleting the addition of Rs. 1,86,565/- when the assessee failed to furnish the confirmatory account? The facts, in brief, nece....
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....ount of Rs. 1,86,565/- claimed as rebate and Rs. 18,40,549/- as bad debts. Consequently, the assessing officer made additions of the said amounts in the income of the assessee. The Commissioner of Income Tax (Appeals) [for short "the CIT(A)"], on an appeal carried by the assessee, vide order dated 13.10.2000, observed that the assessee was right in writing off the outstanding balance standing in the names of certain parties under the provisions of Section 36(1)(vii) of the Act. As regards the amount of Rs. 1,86,565/- claimed as rebate, the CIT(A) found that the said amount stood included in the balance outstanding which had been written off and accordingly deleted the addition made on that count as well. The CIT(A) while partly allowing the....
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....dition of Rs. 18,49,549/- on account of bad debts had recorded the following: "I have considered the rival contentions and the material on record. The foremost fact which needs to be appreciated in its right perspective is that when the business of the assessee had just started picking up and when just three months had passed, the Haryana Government imposed prohibition in the State. It is not difficult to imagine what could be the state of affairs of the whole lot of liquor vendors, be it a wholesaler or a retailer. It is not a case of the business going awry but it is a case where there is complete derailment of the business. The assessee was in the wholesale trade. He supplied goods to the retailers. Needless to say, when there ....
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....eciation of material had concluded that the assessee had written off bad debts amounting to Rs. 18,49,549/- which had become irrecoverable from nine parties out of which the debts from three parties was to the tune of Rs.14 lacs. The prohibition imposed in the State of Haryana had created difficulties for the assessee which had resulted in debts becoming bad. It was further observed that parties had vanished due to prohibition. The said finding has not been shown to be perverse or erroneous by the counsel for the revenue. Now adverting to the second addition of Rs. 1,86,565/- on account of rebate allowed to M/s. Attar Singh and Co., the Vice President in para 7, has noticed as under: "7. The second question pertains to t....