TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 435
X X X X Extracts X X X X
X X X X Extracts X X X X
....gally justified in deleting the addition of Rs. 1,41,59,848/- made by the Assessing Officer (the AO) under section 36(1)(vii) of the Income Tax Act, 1961 (the Act) when the assessee had failed to prove that amount was actually trading liability and the corresponding amount was actually offered as income in earlier years and without considering the provisions of Section 36(1)(vii) and Section 36(2) of the Act? ii. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting the addition of Rs. 1,41,59,843/- on account of bad -debts written off without appreciating the fact that the assessee failed to discharge the burden cast upon it to provide evidence to prove that bad debts are written off in the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cal jobs, both on 'turn-key' basis and on item rate/ lump sum rate basis. The assessee being a registered class-I Contractor in Government Organizations as well as holds membership of Overseas Construction Council of India (OCCI), an organization sponsored by the Ministry of Commerce, Govt. of India. The assessee filed its return of income for AY 2012-13 declaring a loss of Rs. 3,90,53,335/-. In the assessment u/s 143(3) of the Act vide Assessment order the following disallowances were made - * Disallowance of claim of Write Off Rs. 1,41,59,848/- * Disallowance of excess material consumed Rs. 1,88,54,804/- 4. Aggrieved by the above disallowances, the assessee preferred an Appeal before the CIT(A), the Ld. CIT(A) vide order date....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the assessment order u/s 143(3) for AY 2011-12 filed by the appellant at the appellate stage revealed that the same disallowance of Rs. 1,41,59,848/- has been made with the same discussion thereby making it clear that even a "cut & paste job" requires alertness. This casual, or rather callous approach has led to a 'ghost' disallowance of Rs. 1,41,59,848/- instead of examining the appellant's claim of bad debts written off in the relevant PY (AY 2012-13) amounting to Rs. 1,96, 16,407/- despite there being evidences and submissions regarding details of the claim of bad debts written off and acknowledged in the impugned order (as already mentioned). Be that as may be, it is gathered from submission of the appellant and the copies....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ible. It has relied on the decision of the jurisdictional High Court (Delhi HC) in this regard in Mohan Meakin Ltd. vs. C.L.T. 348 ITR 109 (Del). 5.2 In the present case, the appellant is engaged in the business of construction and hence advance against land that is not recoverable (of course, so is the supply of land) will at par with trade debt eligible for deduction on being written off in the appellant's books of accounts. Further loss due to fire is also allowable as deduction under the Act. From the available records, it is observed that the debit balances of the following parties, written off by the appellant in its books of accounts in the relevant PY, amounting to Rs. 1,96,16,407/- as per the details given below, are allowab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts in brief are that, during the course of the assessment proceedings it has been observed by the A.O. from Note 19, 20 and of the profit and loss account for the previous year that the assessee company had booked income/revenue from the operation at Rs. 31,44,026/- only and shown consumption of the material at Rs. 2,19,98.830/- against the operational income of Rs. 31,44,026/-. Accordingly the AR of the assessee company, vide order sheet entry dated 09.01.2015, was asked to explain that as per note 21 of profit and loss account, cost of material consumed is reflected at Rs. 2.26 crore as against declared at Rs. 4.96 crore last year, but the work executed is shown at Rs. 31.44 lacs only as against Rs. 4.36 crore declared last year. In respo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssions as well as copies of the appellant's communication at the assessment stage that vide its letter dated 4/03/2015/13/03/2015 the appellant had communicated not only the information that was already given but also provided copies of relevant documents in its support with regard to the comparatively lower revenues generated despite similar materials consumed. The appellant's stand that its project of Kabul Lines ran into trouble with the Army authorities was supported by necessary documents - copies of invoices disclosing amount claimed and that passed finally. Its receipts where TDS was made is available in Form 26AS. Also details of materials purchased and closing stock in FY 2010-11 including its valuation in the audited books....