TMI Blog2010 (5) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... der, the Hon ble ITAT did not consider the documents submitted in paper book as stated in point no.5 below pertaining to disallowance of Bad Debts and stated at page no 18 of the order as under: Before us nothing was brought on record either to prove that the amounts were advanced in the course of business as no such agreements were filed before us nor controverted the findings of the Learned CIT (A) except making statements. Since the details and proof was not furnished either to the A.O., CIT (A) or before us the claim cannot be allowed on the basis of submission alone. 5. During the appellate proceedings, the applicant had submitted a paper book before the Hon ble ITAT on 05.01.2009, which included: - Details of Bad Debts / advance written off at page 47 of the paper book. - Letter dated 01/10/1998 received from Universal Foods at Pages 49-53. - Profile of Universal Exports at pages 54-57. - Agreement dated 14/05/1999 with Orion Exports at pages 58-62. - Agreement dated 14/05/1999 with Orion Exports at pages 63-66. - Extract of submissions before the learned Commissioner of Income Tax (Appeals) at pages 77-78. - At t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the assessee submitted the following amount with reference to bad debt claim which are considered in para 62 63 of the order of the learned CIT(A): - i) Universal Foods ₹ 37,02,356/- ii) Oriental Exports Rs.1,00,00,000/- (approx) iii) Surajmal Industries ₹ 29,15,695/- Thus even the total of the amounts as submitted before the learned CIT(A) is not even ₹ 2,92,70,003/- but ₹ 2,86,18,001/-. Accordingly the ground is considered to that extent only. 30.The learned counsel referred to the facts regarding bad debt claim and submitted that the amount from Universal Foods and Oriental Exports pertains to its abandoned business of export and import of cashews and the amounts were written off at the time of merger of AgrEvo and Rhone- Poulenc with the assessee company as they are found to be not receivable and in order to represent correct balance at the time merger these amounts were written off. It was submitted that the amount pertaining to Surajmal Industries satisfy the conditions of section 36(2) and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey believed were not recoverable. Out of the above-mentioned amounts, ₹ 13,702,356 (approx) pertain to a bad debts from the Cashew Business. This was a new business, which the company had started in 1999-2000. Substantial advances/credit were giving to suppliers/customers at the initial stages of the operations. However, because of a steady decline in cashew prices, the business went into loss and the management discontinued the business. 33. As can be seen from the above the amounts were taken as approximate figures without establishing the correct amounts involved. Moreover the learned CIT(A) has considered this aspect in its entirety and the findings of the learned CIT(A) in para No. 63 to 74 are as under: - 63 In respect of the action of the Assessing Officer, the appellant's representative has submitted that out of total bad debt of ₹ 1,72,70,0043/-, an amount of ₹ 1,66,18,001/- pertained to dues from the following parties. i) Universal Foods ₹ 37,02,356/- ii) Oriental Exports Rs.1,00,00,000/- (approx) iii) Surajmal Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 31,71,408/- and advances given for tender deposit of ₹ 39,72,001/- as trading loss was made. 67 In respect of the new claim for deduction of the amount as trading loss that has been evidently not made before the Assessing Officer, no further details, such as when the tender fee or excess turnover tax was paid and the circumstance under which these payments were made were filed In the circumstance, the fresh claim for allowance of the amounts as business loss cannot be accepted. 68 The leaves only issue of allowing the deduction as originally claimed. Since the major portion of the amount claimed represented amounts due from M/s. Universal Food and M/s Oriental Exports, the appellant's representative was asked to substantiate that in respect of the amounts outstanding which were written off and claimed as deduction under section 36(1)(vii) of the Act, the conditions laid down in Section 36(2) of the Act, the satisfaction of which is a condition precedent for allowance of deduction, were satisfied. In this respect, he was also asked to file the copies of the agreements the appellant company had with M/s. Universal Foods and M/s. Oriental Exports, to examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s business loss cannot also be accepted. The amount if at all representing a genuine transaction of the money being actually transferred at best can be treated as loan advanced to M/s. Oriental Exports. Considering that the appellant company is not in the business of money lending such loan written off cannot be allowed as deduction as business loss in view of the decision of the jurisdictional High Court in the case of Greaves Ltd. Vs. CIT 251 ITR 190 (Bom). 72 In regard to the amounts due from M/s. Universal Exports claimed as deduction both under the head bad debt and Aventis Integration expenses, since the appellant's representative has not been able to produce any evidence indicating the nature of transaction lending to the payment made, its admissibility as loss cannot be accepted. 73 In respect of the amount due from Sujanil Chemo Industries as well, the appellant's representative has not been able to produce any evidence that the transaction entered into with the said company satisfies the conditions prescribed in Section 36(1)(vii) read with Section 36(2) of the Act. 74 In the circumstances, the claim of the appellant in this direction cannot be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
