TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1558
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....ee is an individual engaged in the business of trading of Swan Timbers in the name of 'Rajeev Trading Co.' and also derived income from commission, salary and profit from trading of shares. The return of income for the assessment year 2008-09 was filed by the assessee on 21.07.2008 declaring total income of Rs. 1,83,414/-. Subsequently, a revised return was filed on 30.09.2008 declaring total income of Rs. 2,67,518/-. The ld. AO observed that the assessee appeared before the ld. AO from time to time and produced books of accounts and all documents for verification. From the details filed during the course of assessment proceedings, the ld. AO sought to verify the sundry debtors' balance as appearing in the books of proprietary concern M/s Rajeev Trading Co. and issued notices u/s 133(6) of the Act to seven parties. The said notices returned unserved. Since the notices got returned unserved, the ld. AO came to conclusion that the entire credits shown by the assessee in the form of realization from debtors to the total sum of Rs. 1,89,34,232/- during the year as not proved within the meaning of section 68 of the Act and added the same to the total income by treating the same as unexp....
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....8,275 and at the same time he had sundry debtors of Rs. 2,96,92,935. This clearly demonstrates that on the one hand the appellant had liability towards these creditors and on the other hand he had assets in the forms of sundry debtors and other kinds. During the relevant previous year the appellant realized Rs. 1 ,89,34,232 out of sundry debtors of Rs. 2,96,92,935 standing as assets on 31.3.2007. A cash flow chart for the year under consideration was furnished by the appellant which indicated recovery of debts and disbursement of fund as mentioned thereunder: 3.3 In course of the assessment proceedings, the appellant furnished a cash flow statement (annexure-C) which indicated disbursement of the sum realized from the sundry debtors as mentioned hereunder: Opening cash balance, i.e. as on 01.04.2007 2,76,302.80 Add: Money realized during the year from: Sundry Debtors 1,89,34,232.00 Withdrawal from Standard Chartered Bank 12,500.00 1,92,23,034.00 Less: Payments made during the year: Deposit with SCB 23,13,000 The Federal Bank 1,09,30,000 Transferred to personal account Payments made to : 36,00,000 Rajputana General Comm. Corp. P. Ltd. 20,00,000 ....
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....f sundry debtors represented a trading asset and a receipt remained conversion of trading asset into cash in the instant case, it was not open for the Assessing Officer to upset the judgement of the Hon'ble Tribunal. Such act is a gross breach of quasi-judicial discipline. In this view of the matter, where the basic facts before the Assessing Officer for subsequent year were the same as were before the Hon'ble Tribunal for an earlier year, it would not be appropriate for the Assessing Officer to differ from the view expressed by the higher appellate authority for the earlier year particularly because it is the same dispute in one and same setting. The Hon'ble Calcutta High Court in Voest Alpine Ind. GmbH v. ITO & Ors. (246 ITR 745, 749 Cal.) held that it is well settled principle of law that the junior incumbent is supposed to obey and carry out the order and / or observations 'made by the superior authority, be it judicial forum or a quasi-judicial forum or even in any administration field. In CIT v. Ralson Industries Ltd. (288 ITR 322 SC) the Hon'ble Supreme Court observed that when an order is passed by a higher authority, the lower authority is bound thereby keeping....
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....en discharged by the assessee in the instant case. We hold that the Hon'ble Supreme Court had addressed the very same issue in the case of Vijay Kumar Talwar vs. CIT reported in 330 ITR 1 dated 06.12.2010 against the assessee. Hence the primary argument advanced by the ld AR on behalf of the assessee deserves to be dismissed in the instant case. 6. However we find that the ld AR had made an alternative argument before us stating that in case if the said credit to the account of the sundry debtors are not believed to be genuine by the department, it cannot be disputed that the assessee had reduced the debtors' account balances to the tune of Rs. 1,89,34,232/- in its books of accounts which effectively amounts to write off of debts to that extent. The ld. AR argued that this write off is otherwise allowable as a deduction as bad debts u/s 36(1)(vii) of the Act. In support of this proposition, he placed reliance on the Co-ordinate Bench decision of this Tribunal authored by the undersigned in the case of D.K. Industries vs. ITO in I.T.A. No. 683/Kol/2013 for assessment year 2009-10 dated 08.04.2016, wherein it was held as under: "6. We have heard the rival submissions and perused t....
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....co-ordinate bench of this tribunal in the case of Sanjeev Kejriwal vs ITO in ITA No. 371/Kol/2010 dated 9.11.2012, we find that the facts stated thereon are squarely distinguishable with regard to realization of monies from debtors. In that case, there was a clear finding given by the Learned CIT(A) that the monies received represent realization from debtors. Whereas, in the instant case, the entire dispute revolves on the fact of realization of monies from loan debtors. Hence reliance placed on the aforesaid decision does not advance the case of the assessee on this aspect. Hence the same would become taxable as income from other sources. 6.2. It is not in dispute that the assessee had shown these loan balances due from these three parties as loans and advances receivable in its balance sheet for more than 10 years. It is also not in dispute that one of the main businesses of the assessee firm is money lending activity. This is quite evident from the various partnership deeds of the assessee vide clause 3 which are reproduced herein below for the sake of convenience :- 3. That the business of the firm shall be mainly that of export & import of agro products like raw cotton, ....