TaxTMI 
TaxTMI 
2019 (12) TMI 1151
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.... 3. The learned CIT(A) has erred both in law and on the facts of the case in confirming the disallowance of bad debts amounting to Rs. 5,20,205/-. 4. The learned CIT(A) has erred both in law and on the facts of the case in confirming the disallowance of VAT credit written off by the appellant of Rs. 4,899/-. 5. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 6. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in levying interest u/s.234A/B/C of the Act. 7. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO in initiating penalty u/s.271(1)(c) of the Act. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the he....
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....s. Therefore, the obligation lies on the assessee to produce the parties from whom the purchases were made in the year under consideration. In view of the above, the Ld. CIT(A) treated the entire amount as bogus purchases after having reliance on the judgment of Hon'ble Supreme Court in the case of N.K.Proteins Ltd. Vs. DCIT, 2017 -TIOL- 23-SC-IT and confirmed the order of the AO. Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. 8. The Ld. AR before us submitted that the AO and the ld. CIT-A failed to appreciate that purchases made by assessee from the parties are absolutely genuine as evident from the followings. a. Books of accounts are duly audited which is at pages 6 to 21 of the paper book. b. Ledgers of the concerned parties containing details of underlying purchases which is at page 25 to 26 of paper book. 8.1 The documentary evidences amply prove the purchases made from the parties in question are absolutely genuine. Hence, question of making any disallowance in respect of the same does not arise at all. 8.2 Learned A.R further submitted that the corresponding ''sales'' have not been disputed. Thus, the factum of sales mad....
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....laimed by him. However from the preceding discussion, we note that the assessee has discharged his onus by furnishing the copy of the ledger of the parties where the addresses of such parties were mentioned. In case, there is any doubt on the genuineness of the transactions from the so-called parties, the AO should have exercised his power granted under these statute under section 133(6)/131 of the Act by issuing notices for the purpose of the confirmation. But the AO has not done so. 10.3 Similarly, we are not convinced with the finding of the Ld. CIT(A) that the assessee was under the obligation to produce the impugned parties. It is because, the assessee cannot under any law enforce the attendance of such parties whereas the Revenue was empowered under the statute to call upon such parties. 10.4 We also note that the assessee has claimed to have made sales against such purchases which have been admitted by the Revenue. As such in our considered view, such sales cannot be executed without having the corresponding purchases. There was no defect pointed out by the authorities below insofar the sales made against such purchases. Moreover, there is also no allegation regarding th....
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....ssee is partly allowed. 11. The 2nd issue raised by the assessee is that the Ld. CIT(A) erred in confirming the addition made by the AO for Rs. 5,20,205/- on account of bad debts. 11.1 The assessee in the year under consideration has claimed bad debt amounting to Rs. 5,20,205/- but failed to furnish the details of the parties viz a viz details of the sales made to them. Therefore the AO disallowed the same and added to the total income of the assessee. Aggrieved assessee preferred an appeal to the Ld. CIT(A). 11.2 The assessee before the Ld. CIT(A) submitted that it has claimed the deduction with respect to the following parties: i M/s Sino star minerals Ltd Rs. 2,56,355/- ii. M/s Ishita Overseas Rs. 2,63,850/- 11.3 In case of M/s Sino star minerals Ltd. The assessee claimed to have furnished performance guarantee bond to the party amounting to USD 5500.00 only but he failed to perform the same. Therefore the party has forfeited the same equivalent to INR 2,56,355.00. The assessee accordingly claimed that such loss was incurred in the course of the business therefore the same should be allowed. The assessee in support of his contention also filed the Remittance sh....
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....party, assessee had written off such sum as bad debts in the books of accounts. The said fact is evident from the ledger of Ishita Overseas placed on pg.27 of P/B. h. Since such sum has been written off in books as irrecoverable, such bad debts are allowable in light of TRF Ltd. vs. CIT - 323 ITR 397 (SC). i. Alternatively, such sum may be allowed as "Business loss" u/s 28 or 37 of the Act. Reliance is placed on the judgments referred in content of similar argument raised hereinabove w.r.t. sum written off in the name of Sino Star International. j. It is submitted that certain VAT credit \vas written off bv the assessee in the books of accounts by debited the same to P&L a/c. k. Such expenditure has also arisen in the normal course of business of the assessee. Hence, such sum is allowable "Business loss" u/s 28 or 37 of the Act. Reliance is placed on the judgments referred to hereinabove in support of similar argument raised while dealing with ground w.r.t. Bad debts. 14. On the other hand the Ld. DR vehemently supported the order of the authorities below. 15. We have heard the rival contentions of both the parties and perused the materials available on record. It i....
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....ee in connection with such contract as evident from the copy of the ledger of M/s Sino Star Minerals Ltd. (Guarantee Bond) placed on page 28 of the PB for the previous year 2010-11 in which such payment was made. In view of the above, we hold that the assessee is eligible for the deduction of the impugned loss as incurred in the course of the business but not as bad debts under the provisions of section 36(1)(vii) of the Act. 15.3 Regarding the claim of the bad debts for the amount of Rs. 2,63,850/- due from Ishita Overseas, we note that the assessee has furnished the copy of the ledger of the party which was also consisting the address of such party. But the AO without taking any confirmation from such party whether such amount represents the sales made to it has disallowed the bad debts. Indeed the onus lies on the assessee to furnish the details of the sales made to the parties. But the assessee failed to furnish the same despite the enough opportunities provided by the authorities below. 15.4 However, in the case on hand, we cannot ignore the ledger copies filed by the assessee which is placed on pages 27 of the paper book while deciding the issue on hand. Accordingly, we i....