Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2007 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (2) TMI 349 - ITAT MUMBAIDisallowance of Bad debts - Lease rentals receivable - Security deposit Outstanding - HELD THAT:- According to the learned counsel, the deposit received is not against the lease rental but it is a security connected with the purchase costing Rs. 41,86,000. It is further seen from the written submission given by the assessee before the CIT(A) that the cheques issued by M/s. Sarigram Steels Ltd. were dishonoured and the matter was pending before the Hon’ble Bombay High Court in the case of Jethabhai Hirji & Jethabhai Ramdas [1977 (11) TMI 11 - BOMBAY HIGH COURT]. Thus, we are of the view that the finding of the learned CIT(A) that the debt had not become prima facie bad, is to be rejected. Now coming to the Special Bench decision of the Tribunal in the case of Oman International Bank SAOG [2006 (5) TMI 117 - ITAT BOMBAY-H] majority held that once the assessee has written off the debt as bad, the revenue cannot any more demand a demonstrative proof to establish that the debt has actually become bad. On the contrary, it is for the revenue to establish that the debt has not become bad. In the instant case of the assessee, the learned DR’s contention is that the assessee is in possession of Rs. 16,48,000 received from the same party as a deposit. According to the assessee, this amount is against the goods leased to M/s. Sarigram Steels Ltd., therefore, it is not possible to adjust the amount against the lease rent. This argument of the assessee cannot be faulted with. Thus, we are of the view that the write off by the assessee is to be accepted and the stand of the revenue that the amount should have been utilised against the deposit has no merit. Hence, this ground of appeal by the assessee is allowed. In the result, appeal of the assessee stands allowed for statistical purposes.
|