TMI Blog2010 (6) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... als. It was found that under the head Sales-tax Deferment , the assessee has shown sales-tax liability as outstanding during the year. The Assessing Officer has made the addition which was affirmed by the Learned CIT(Appeals). 3. At the outset, it was informed that in assessee s own case on identical facts the Respected Co-ordinate Bench B ITAT Ahmedabad in Assessment Year 2003-04 in ITA No.1500/Ahd/2009 dated 07/08/2009 vide paragraph No.6 has decided this issue in assessee s favour as under:- 6. The facts undisputed are that the assessee is having manufacturing unit in Karnataka. Karnataka Government had amended the Sales Tax Act for providing deferment of the Sales Tax liability and to treat the said sales tax collected as loan for use of the assessee Company. In this connection, we may refer to Section 19C of the Karnataka Sales Tax Act,1957, which is reproduced as under : 19C- POWER OF GOVERNMENT TO NOTIFY EXEMPTION OF TAX OR DEFERRED PAYMENT OF TAX FOR NEWINDUSTRIES. (1) The government may, in such circumstances and subject such conditions as may be prescribed, by notification defer payment by any new industrial unit of the whole or any part of the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42,21,000 on account of deferment of sales tax. Accordingly, we dismiss ground No.1 of the Revenue. 3.1. Since in the past as well, the Respected Co-ordinate Bench has affirmed the view of the Learned CIT(Appeals), therefore, we have no reason to take any other view to follow the same records. Identically for this year as well he hereby uphold the order of the Learned CIT(Appeals) and dismiss this ground of the Revenue. 4. Second ground of the Revenue is in respect of claim of bad debt; reproduced below:- 2. The Ld. Commissioner of Income tax (A)-XI, Ahmedabad has erred in law and on facts in deleting the addition made on account of Bad Debts amounting to ₹ 36,57,405/-. 4.1 It was noticed by the Assessing Officer that as per Profit Loss account the appellant has written-off of bad debts. In this regard, the explanation of the assessee was that there were certain outstanding sales of earlier years and balance amount was not recoverable, therefore, written-off in the books of account. About certain petty and small amounts the explanation of the assessee was that it was not worth to follow the recovery hence decided to write-off in the books. The Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Bank SAOG (supra). Their Lordships S.H. KAPADIA AND AFT5AB ALAM JJ. Dismissed the department s S.L.P. against the judgment of the Hon'ble Bombay High Court whereby the Hon'ble Court has confirmed the order of the Tribunal holding that the issue was covered by 286 ITR (AT) 8 wherein it was held that the assessee was entitled to claim deduction if the debt had been written off as irrecoverable in the books of account and there was no obligation on the assessee to establish that the debt had become bad (313 (ST) 03). Now it is clear that the decision of the Special Bench of ITAT, Mumbai in the case of Oman International Bank SAOG (supra) in fact has been upheld by the Hon'ble Supreme Court and the law on the subject of deduction of bad debt written off stands explained. In this context, I have to refer to the arguments of the learned Commissioner of Income-Tax that the jurisdictional High Court in the case of Dhall Enterprise and Engineers Pvt.Ltd. vs. CIT, 295 ITR 481 has held that the assessee should prove that the debt has become bad in a particular year and it is not sufficient to write off debts as bad in the books of account as irrecoverable. But as pointed out by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Mere debiting the amount was not sufficient, the Learned Departmental Representative has pleaded. 5.1. Further, the Learned Departmental Representative has placed reliance on the decision of the Special Bench of ITAT Mumbai in the case of Oman International Bank reported as 102 TTJ 207(Mum.) for the proposition that the burden is on the assessee to establish that, in fact, he had bona fide reason for claiming a particular debt as a bad debt. The argument before us is that the assessee has to establish the reasons on the basis of which the commercial decision of claiming bad debt was made and such a decision was not a whimsical or fanciful decision. He has stressed that the decision for claiming bad debt must be based upon some material that the debt in fact was not recoverable. Earlier this case was cited as 286 ITR(AT) 08 [SB] when the issue was decided by the Tribunal. The interpretation of the said decision of the Tribunal by the Ld. CIT-DR was that, once the claim of bad debt is within the personal knowledge of the business-man whether a debt had become bad or not, then he has to place on record the basis of his decision, as well as, he has to establish his bona fide to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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