Citi Financial Retail Serrvices (I) ... vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, CHENNAI ी ए. मोहन अलंकामणी, लेखा सद य एवं ी वी. दग ु ा$ राव, या%यक सद य केसम&

BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER

आयकर अपील सं./ITA No.2752/Mds/2014 %नधा$रण वष$ /Assessment Year : 2006-07

M/s Citi Financial Retail Services (I) Ltd. The Assistant Commissioner of [Now merged with Citicorp v. Income Tax, Finance (India) Limited], Company Circle I(3), 117, Radhakrishnan Salai, Chennai - 600 034. Mylapore, Chennai - 600 004.

PAN :AAACN 2379 N (अपीलाथ+/Appellant) (,-यथ+/Respondent)

अपीलाथ+ क. ओर से/Appellant by : Shri V.S. Jayakumar, Advocate ,-यथ+ क. ओर से/Respondent by : Shri N. Madhavan, JCIT

सन ु वाई क. तार ख/Date of Hearing : 24.02.2015 घोषणा क. तार ख/Date of Pronouncement: 05.03.2015

आदे श /O R D E R

PER V. DURGA RAO, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the

order of the Commissioner of Income Tax (Appeals)-I, Chennai,

dated 28.07.2014 relevant to the assessment year 2006-07. 2 I.T.A. No. 2752/Mds/2014

2. Facts in brief are that the assessee is engaged in the

business of financing. The assessee has made a claim of bad

debts written off to the tune of ` 12,20,10,010/- and also has

claimed accrual of interest. The A.O. has disallowed both the

claims of the assessee. The Ld. CIT(Appeals) by following the

order of the Tribunal in the assessee's own case for assessment

year 2005-06, has confirmed the order of the A.O.

3. On being aggrieved, the assessee carried the matter in

appeal before the Tribunal. At the time of hearing, the Ld.counsel

for the assessee submitted that the issues involved in this appeal

had been considered by Hon'ble jurisdictional High Court in the

case of M/s Citi Financial Retail Services India Ltd. & M/s City Corp

Finance (India) Ltd. v. ACIT in T.C.(A).Nos.1136 of 2009, 399 of

2009, 184 of 2014 and 737 of 2014 dated 22.09.2014 wherein the

Hon'ble jurisdictional High Court has sent the matter back to A.O. to

consider in accordance with law. The Ld. counsel submitted that

the assessee's case is similar to that of the case remitted by the

Hon'ble jurisdictional High Court. He pleaded that by following the

judgment of the Hon'ble jurisdictional High Court, the assessee's

case may be remitted back to A.O. to consider the issues afresh. 3 I.T.A. No. 2752/Mds/2014

4. On the other hand, Ld. D.R. supported the orders of the

authorities below.

5. We have heard both sides and perused the records and

gone through the orders of the authorities below. The assessee has

made claims before the A.O. regarding bad debts and also accrual

of interest. The A.O. has denied the claims of the assessee and the

Ld. CIT(Appeals) confirmed the same by following the order of the

Tribunal in assessee's own case. As submitted by the Ld.counsel

for the assessee, these issues have to be remitted to A.O. in the

light of the judgment of the Hon'ble jurisdictional High Court in the

case of M/s Citi Financial Retail Services India Ltd. & M/s City Corp

Finance (India) Ltd. v. ACIT (supra), wherein the Hon'ble

jurisdictional High Court has remitted the issues back to the A.O.

vide paragraphs 15, 16 and 17 which are extracted as under:-

"15. In view of the law laid down in the case of (TRF Ltd. vs Commissioner of Income Tax) reported in (2010) 323 ITR 397 we have no hesitation to hold that "bad debts" if written off, on the accounts of the assessee and appropriately claimed before the competent authority, the authorities are bound to consider the same in the light of the decision of the Hon'ble Supreme Court.

16. The issue as to whether the claim of the assessee seeking allowance for debts written off as irrecoverable, irrespective of whether they are written off after 180 days or after 120 days as per the changed management policy in respect of each assessment year needs to be tested in the light of the decision of the Hon'ble Supreme Court. To that extent we hold that the decision of the Original Authority, 4 I.T.A. No. 2752/Mds/2014

Commissioner of Income Tax (Appeals) and that of the Income tax Tribunal requires reconsideration.

17. In order to cut short the litigation taking cue from the plea of Mr. T. Ravikumar, learned counsel appearing for the Department, we are inclined to set aside the order and remit the matter to the Commissioner of Income Tax (Appeals) to reconsider the assessment proceedings, as the first appellate authority who is entitled to consider the assessment order as continuation of original proceedings."

6. In view of the above, we set aside the order of the Ld.

CIT(Appeals) and remit the issues back to the file of the A.O. to

decide the issues afresh in accordance with law keeping the

judgment of the Hon'ble jurisdictional High Court in the case of M/s

Citi Financial Retail Services India Ltd. & M/s City Corp Finance

(India) Ltd. v. ACIT (supra) into consideration and after giving

reasonable opportunity of being heard to the assessee.

7. In the result, the appeal filed by the assessee is allowed for

statistical purposes.

Order pronounced on Thursday, the 5th of March, 2015 at

Chennai.

Sd/- sd/- (ए. मोहन अलंकामणी) (वी. दग ु ा$ राव) (A. Mohan Alankamony) (V. Durga Rao) लेखा सद य/Accountant Member या%यक सद य/Judicial Member चे नई/Chennai, th >दनांक/Dated, the 5 March, 2015. Kri. 5 I.T.A. No. 2752/Mds/2014

आदे श क. ,%त@लAप अBेAषत/Copy to: 1. अपीलाथ+/Appellant 2. ,-यथ+/Respondent 3. आयकर आयुCत (अपील)/CIT(A)-I, Chennai 4. आयकर आयुCत/CIT, Chennai-1, Chennai 5. Aवभागीय ,%त%न ध/DR 6. गाड$ फाईल/GF.