TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1774
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....anated from the order of the Learned Faceless Assessment Centre, Delhi (in short, 'the A.O.') passed under section 143(3) read with section 254 read with section 144B of the Act, dated 24/09/2021. 2. The assessee has taken the following grounds of appeal:- "GROUNDS OF APPEAL The under mentioned Grounds of Appeal are without prejudice to one another: 1. FIRST GROUND OF APPEAL: - Order Bad In Law And On Facts 1.1. The order passed by the Learned Commissioner of Income Tax (Appeals) (hereinafter referred to as (CIT(A)) u/s 250 of the Income-tax Act, 1961 (the Act) is bad in law and on facts. 2. SECOND GROUNDS OF APPEAL: ERRONEOUS CONFIRMATION OF DISALLOWANCE U/S 36 Of the Act 2.1. The learned (CIT(A)) has erred in confirming the or....
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....er has held that the debtor is guilty and the Managing Director is convicted under the provisions of CrPC and ordered them to pay a compensation of Rs. 11.80 lakhs. 2.7. The learned CIT(A) failed to appreciate the fact that there was an out of court settlement between the debtor and the Appellant for an amount of 50% of the total receivable after the Magistrate Court's order which was received at a later stage by the Appellant. 3. SECOND GROUNDS OF APPEAL: 3.1. The Appellant craves to leave to add, amend and/or alter all or any of the above Grounds of Appeal before or at any time of hearing of this Appeal." 3. The brief facts of the case are that the appeal was earlier heard, and order was passed on 20/09/2019 bearing ITA No.3332....
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....essee and the debtor entered into a Memorandum of Understanding (MOU) dated 24/06/2009 for the payment of the outstanding amount of Rs. 87,22,474/- and issued various cheques drawn on the Shamrao Vithal Co-op Bank Limited in discharge of its liability as below and the debtor further agreed to pay interest for the delay in payment. Sl. No. Cheque No. Date Amount 1. 425044 25 July 2009 500,000 2. 425045 25 August 2009 500,000 3. 425046 25 September 2009 500,000 4. 425047 25 October 2009 500,000 5. 425048 25 November 2009 500,000 6. 425049 25 December 2009 500,000 7. 425050 25 January 2010 500,000 8. 425051 25 February 2010 900,000 9. 425052 25 March 2010 900,000 10. 425053 25 April 2010 900,000 11.....
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....11-12. A copy of the ledger is enclosed in APB page 41. 9. The 50% of Rs. 87,22,474/- was received during the FY 2015-16. Out of the said 50 percentage Rs. 23,71,500/- was received from the Metropolitan Magistrate Court, Bandra, Mumbai and the balance from the debtor. It is important to note that the Magistrate will release the payment, only after closure of the case whether by way of mutual settlement or by passing of an order. In the case of the Appellant, as it was mutual settlement, the amount was released without passing of any order. A copy of the ledger for recovery is enclosed as in APB page 42. However, while writing off the amount, instead of debiting write-off account, it inadvertently debited provision for doubtful debts accoun....
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....ing the proceedings under the Negotiable Instruments Act, 1881. He further stated that the Ld. AO in the order, has mentioned that 'no order has been passed by the Honorable Court with regard to 50% of the amount to be paid to the appellant out of the total receivable from the debtor. It is not understandable that before the judge M/s. Tag Engineers Pvt. Ltd. agreed to pay 50% of the total amount and in this regard, no order/direction has been issued by the Court. It appears to be a concocted story'. 14. The Ld. AR argued that the observation of the Ld. AO is of no relevance to the case as the settlement between a debtor and a creditor is purely a business decision based on the facts. In the case of the assessee, the agreement to s....
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....remained unpaid despite the issuance of post-dated cheques. These cheques were dishonoured, and legal action under section 138 of the Negotiable Instruments Act, 1881 was initiated. Subsequently, the Metropolitan Magistrate Court, Bandra, Mumbai passed an order dated 28/12/2012 convicting the debtor and ordering compensation of Rs. 11.80 lakhs. Pursuant to this, the assessee entered into a settlement with the debtor for 50% of the total outstanding amount, and accordingly, wrote off the remaining 50%, i.e. Rs. 43,61,237/-, in its books during FY 2011-12. The only basis for disallowance by the Ld. AO and confirmation by the Ld. CIT(A) was that the assessee used the term "provision for doubtful debts" instead of "bad debts written off." Howev....