TMI Blog2008 (4) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... o question of discretion to use or not to use these powers. It is so for the reason that when a public authority has the powers to do something, he has a corresponding duty to exercise these powers when circumstances so warrant or justify. The nature of finding or direction under section 153(3), Hon ble Supreme Court s following observations in the case of Rajinder Nath v. CIT [ 1979 (8) TMI 3 - SUPREME COURT] . It is thus clear that the CIT(A) s finding that bad debts are not allowable in the assessment year 2001-02 because the same is allowable in the assessment year 2002-03, which is the assessment year of actual write off, is the kind of finding which is covered by the provisions of section 153(3) of the Act. In view of the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A). It is also important to bear in mind that any other view of the matter will result in a double jeopardy to the assessee which will constitute absurdity besides being grossly inequitable and patently unfair. An interpretation which leads to such absurdities, as is the settled law, is to be avoided. Therefore, we uphold the grievance of the assessee and direct the AO to give proper effect to the findings of the CIT(A) for the AY 2001-02 by recomputing the taxable income for the AY 2002-03 and allowing the bad debt in the year in which it is actually written off, i.e., 2002-03. The assessee gets the relief accordingly. In the result, the appeal is allowed. It was so pronounced in the open Court upon conclusion of hearing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequent assessment year, i.e., accounting year ended 31-3-2002. The Assessing Officer had given a categorical finding to this effect, which was confirmed by the CIT(A). In the meantime, the assessee had also filed his income-tax returns for the assessment year 2002-03 and since he had claimed the bad debts in the assessment year 2001-02, he did not claim the bad debt of Rs. 39,83,677 again this year as well but disclosed, by way of note to the computation of income attached to the income-tax return, that the assessee has written off Rs. 41,90,465.28 as bad debts and out of which Rs. 39,83,877.40 was written off in 01-02 due from Ghanshyam Sukhwani and the balance of Rs. 2,06,787.88 has been debited to P L a/c this year . When it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable under section 154 of the Act and, therefore, the application of the appellant making a claim in respect of bad debts at Rs. 39,83,677.40 was rightly rejected by the learned Assessing Officer. The ground of appeal taken by the appellant in this regard thus fails. 3. The assessee is not satisfied by the stand so taken by the CIT(A) and is in second appeal before us. 4. Having heard the rival contentions and having considered the applicable legal position, we are unable to share the perception of the authorities below. A careful analysis of the legal position leads us to the conclusion that the rectification petition should have been allowed. 5. A mistake apparent from record is not only a mistake in the acts of an authority; e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, that is in respect of a particular assessee and in respect of a particular assessment year. To be a necessary finding, it must be directly involved in disposal of a case. It is possible that in certain cases, in order to render a finding on A , a finding in respect of B is called for ..The same principle seems to apply when the question under inquiry is whether an income is taxable in the assessment year under consideration or for any other assessment year.... 8. It is thus clear that the CIT(A) s finding that bad debts are not allowable in the assessment year 2001-02 because the same is allowable in the assessment year 2002-03, which is the assessment year of actual write off, is the kind of finding which is covered by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Assessing Officer, therefore, is a mistake apparent from the record, and there cannot be any two reasonable opinions on whether or not the Assessing Officer should give effect to the finding of the CIT(A). It is also important to bear in mind that any other view of the matter will result in a double jeopardy to the assessee which will constitute absurdity besides being grossly inequitable and patently unfair. An interpretation which leads to such absurdities, as is the settled law, is to be avoided. 10. For the reasons set out above, we uphold the grievance of the assessee and direct the Assessing Officer to give proper effect to the findings of the CIT(A) for the assessment year 2001-02 by recomputing the taxable income for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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