TaxTMI 
TaxTMI 
2013 (12) TMI 887
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.... such debts belong to its subsidiary company, which ought not to have been taken over following the terms of contract for manufacturing of brewery product. 3. The CIT(A) ought to have appreciated the Assessing Officer's view that being a wholesale distributor of brewery products, the losses by way of write off of debts arising on sedimentation should have been borne by the manufacturer or subsidiary company. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 5. The appellant craves leave to add, alter, amend and / or delete any of the grounds mentioned above." 3. The assessee is a company engaged in the business of marketing of beer manufactured by its group concerns. The assessee claimed a deduction of Rs.1,90,22,677 under the head 'bad debts'. The Assessing Officer disallowed the claim of the assessee for deduction on the ground that the assessee failed to establish that the debts have become bad. On appeal by the assessee, the CIT(Appeals) confirmed the order of t....
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....ard quality or packaging, HBL shall at its cost arrange to collect the substandard stocks (after getting necessary excise and other permissions), reprocess and resupply the stocks. If such reprocessing is not possible then HBL will indemnify SWBL against all claims, proceedings, losses, damages charges expenses, etc. which may be made against or suffered by SWBL". 6. According to the AO, the above clause in the agreement would show that the manufacturer has to manufacture beer according to specifications and standards and any sub-standard quality or loss in manufacturing has to be borne only by the manufacturer and not by the assessee. The AO therefore was of the view that the liability in question itself was not that of the assessee, but that of the manufacturer and therefore the question of allowing the claim of the assessee on account of bad debts cannot be entertained. 7. It was contended before the CIT(Appeals) that the loss in question was incidental to the business of the assessee and had to be allowed as deduction. Reliance was also placed on the decision of the Hon'ble Supreme Court in the case of TRF Ltd. v. CIT, 323 ITR 397 (SC) for the proposition that to claim deduct....
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.... the assessee on account of bad debts as laid down in section 36(1)(vii) and section 36(2) of the Act have been fulfilled. The grievance of the revenue as projected in the grounds of appeal appears to be that the beer manufacturers were subsidiary companies and that the losses in question ought to have been borne by them. As we have already seen, this will not be a relevant criterion for disallowing the claim of the assessee for deduction on account of bad debts. For the reasons given above, we do not find any grounds to interfere with the order of the ld. CIT(Appeals). Consequently, the appeal by the revenue is dismissed. ITA No.553/Bang/2013 12. There is a delay of about 319 days in filing the present appeal by the assessee. In the petition for condonation of delay in filing the appeal, it has been stated by the director of the assessee that on receipt of the impugned order of the CIT(A), the appeal was prepared and sent to the assessee for signature. As the director of the assessee was travelling, the papers were left unsigned and later misplaced. When the assessee received the notice of appeal by the department against the impugned order of the CIT(A), it was realized that th....
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..... On this issue, the CIT(A) agreed with the AO and his relevant observations were as follows:- "4.3 Grounds No. 5 and 6: Vide these grounds, the appellant challenges the decision of the AO not to allow the additional claim for bad debts amounting to Rs.2,09,15,560/-. The ITAT by its order dt. 29.4.2009 had remanded this issue to the AO to reexamine the claim since the appellant had stated that this amount represents the balance out of a total amount of Rs.3,65,62,625/- after allowing for Rs.1,56,46,055/- already included in the claim of Rs. 1,90,22,677/- covered in Ground No. 4 above. However, in this regard, the AO after enquiry holds that both the "existence of the debts" and that of the "bad debts" were not proved by the appellant before him. Though the appellant objects to this by stating in the grounds that the AO rejected the claim "on specious grounds", no further clarification is given in course of the appellate proceeding with reference to this claim. This is so even though I find from the ITAT order that this ground was not raised in the original appeal at all, but was sought to be introduced at the first appellate stage during the first round.....