TaxTMI 
TaxTMI 
2015 (2) TMI 64
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....sp; 2. That the Ld. CIT(A) without properly appreciating the facts of the case and provisions of the Act erred in confirming disallowance representing Provision for Doubtful Debt to the extent of Rs. 2,13,72,616/-. 3. That the Ld. CIT(A) ha without appreciating the facts of the case erred in confirming the disallowance of Provision for Contractual Obligations amounting to Rs. 36,362/-. 4. That the appeal is within time since the order was received on 3.7.2008. 5. That the appellant may be allowed to add, alter, modify or delete any of the grounds of appeal stated hereinabove." 3. The grounds raised in the ITA NO. 5939/M/2008 (A.Y. 2001-02) read as under:- "1. That the order of Ld. CIT(A) is bad both in law and on facts of the case. 2. That the Ld. CIT(A) has erred in holding that Ground No. 5 dealing with claim for allowability of provision for doubtful....
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....sp; 9. That the appeal is within time as the order of the Ld. CIT(A) was received on 18 March, 2011. The appellant craves leave to supplement, to cancel, to amend, to add and or / or otherwise to alter / modify any or all the grounds of appeal stated hereinabove." Assesse's Appeal No. 5939/Mum/2008 (A.Y. 2001-02) 5. The facts narrated for the Asstt. Year 2001-02 by the Revenue authority are not disputed by both parties, therefore, no need to repeat the same for the sake of convenience. The AO completed the assessment u/s 143(3)/147 of the Income Tax Act, 1961 on 23.3.2004 and made the various additions. 6. Against the order of the AO dated 23/3/2004 assessee filed an appeal before the Id. First Appellate Authority who vide impugned order dated 11/7/2008 partly allowed the appeal of the assessee. Now the Assessee is aggrieved against the impugned order and filed the Appeal before the Tribunal.. 7. Ld. Counsel of the assessee filed a Paper Book containing the Item No. 1 to 6 having the orders of the Hon'ble Supreme Court, Delhi High Court and Tribunals orders covering the issues raised by the assessee in the appeal. Counsel of the asses....
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....; 2. Whether it is imperative for the assessee-bank to close the individual account of each of its debtors in its books or a mere reduction in the Loans and Advances or Debtors on the asset side of its balance sheet to the extent of the provision for bad debt would be sufficient to constitute a write off is the question which we are required to answer in these civil appeals? 13. Hon'ble Supreme Court answered the above question as under:- "5. At the outset, we may state that, in these civil appeals, broadly, two questions arise for determination. The first question which arises for determination concerns the manner in which actual write off takes place under the According principles. The second question which arises for determination in these civil appeals is, whether it is imperative for the assessee-bank to close the individual account of each debtor in its books or a mere reduction in the "Loans and Advances Account‟ or Debtors to the extend of the provision for bad and doubtful debt is sufficient. 6. ....
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....tten off the bad debts as per the decision of Supreme Court in the case of Vijaya Bank (supra) and, therefore, the requirement of writing off of bad Page No. 9 debts was fulfilled. Ld. DR relied on the order of the lower revenue authorities. 15. We have considered the submissions of the both the parties and have perused the record of the case. We find that Hon'ble Supreme Court in the case of Vijaya Bank (Supra) has answered the aforementioned question in Para 6 reproduced earlier. We find that both the lower revenue authorities have not examined the issue in the light of the decision of the Hon'ble Supreme Court in the case of the Vijaya Bank (Supra) and, therefore, in the interest of justice, the matter is restored back to the file of the Assessing Officer for examining the issue de-novo in the light of the decision of the Hon'ble Supreme Court. 16. In the result this ground is allowed for statistical purposes." 7.2 Ld. DR did not have raised any objection to this request of the Ld. Counsel of the assessee. 7.3 We have heard both parties and perused the releva....
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....e assessee has accepted the stand of the Department and also that the claim was wrongly made. AO has held that in view of this, apparently there is no force in the contention of the assessee that the amount in question is a genuine business expenditure allowable u/s. 37(1) of the Act. After having considered all relevant facts of the case it is held that the assessee has furnished inaccurate particulars of income to the extent of Rs. 16,18,319/- and hence provisions of section 271(1)(c) are clearly applicable in this case. It is accordingly held that the assessee has committed default under the provisions of section 271(1)(c) for which penalty of Rs. 6,40,046/- was imposed upon the assessee. We find that Ld. CIT(A) has observed that assessee has furnished inaccurate particulars of income and has accepted the fact that it had made a claim which was not correct in law. Further in its submission the appellant has failed to justify or give a plausible explanation as to why it did not make a disallowance which was mandatory on its part to make as per the Income Tax Act. As such the explanation one to section 271(1)(c) comes into play and the assessee is liable to penalty, thus the penal....
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....lar reasoning while making disallowance of warranty provision. AO observed that the A/R also claimed for allowance of expenses towards contractual obligation for similar way as warranty provision has been allowed by the ITAT in its own case for the asstt. year (2002-03). We find that Ld. CIT(A) has considered the contention of assessee's counsel and the same was not acceptable because this year the claim made for Rs. 36,362/- is merely on provision on adhoc basis and the assessee has not been able to advance any reason / explanation which could justify the claim as made. Therefore, the claim of assessee is negative and addition of Rs. 36,362/- ad made by the AO is hereby confirmed by the Ld. CIT(A). We find that Ld. Counsel of the assessee during the hearing has submitted that this Tribunal in assessee's own case for the asstt. year 2005-06 in ITA No. 1814/Del/2010 vide order dated 23.8.2013 set aside the issue to the AO to examine the de-novo, in light of the Tribunal's decision for the asstt. year 1998-99. The Tribunal has adjudicated the issue as under:- "9. We have considered the rival submi....
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....ertained and the provisions are made on factual basis and they were not in the nature of any contingency of future expenses. The legal character of the provision for contractual obligation is in a way similar to the provision for warranty/ guarantee. Therefore, the discussion made in respect of the issue regarding provision of warranty equally applies to the provision for contractual obligations also. There is no doubt that the assessee has to incur expenditure towards the contractual obligations pertaining to the completed projects. This is evident from the fact that the Assessing Officer himself has disallowed only Rs. 62,36,462 as against the total claim of Rs. 2,63,71,552 made by the assessee-company. It shows that the assessee has already incurred a major portion of the provision by way of actual expenditure. Therefore, we do not find any reason to disallow the balance portion of Rs. 62,36,462. The said disallowance is deleted. The Assessing Authority is directed to allow the amount in full." 10. In the result this issue is allowed for statistical purposes. 16.1 Ld. DR did not have raised any objection to this request o....