Judgment dt. 03.10.2019 in TC(A) No.736 of 2019 C.Jayantilal, Proprietor, Sha Kantilal Jayantilal, Chennai v. Income Tax Officer IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 03.10.2019 CORAM : HON'BLE DR.VINEET KOTHARI, ACTING CHIEF JUSTICE AND HON'BLE MR.JUSTICE C.SARAVANAN Tax Case (Appeal) No.736 of 2019 C.Jayantilal Proprietor, Sha Kantilal Jayantilal No.41/7, Strotten Muthiah Mudali Street Chennai 600 079. .. Appellant v. Income Tax Officer Business Ward X(2) Chennai 600 006. .. Respondent Tax Case Appeal filed under Section 260A of Income Tax Act, 1961, against order of Income Tax Appellate Tribunal, 'A' Bench, Chennai, dated 17.12.2008 made in ITA.No.1886/Mds/2007, for assessment year 2005-2006. For Appellant : Mr.S.Ramesh Kumar For Respondent : Mr.T.Ravikumar Senior Standing Counsel Page 1 of 8 http://www.judis.nic.in Judgment dt. 03.10.2019 in TC(A) No.736 of 2019 C.Jayantilal, Proprietor, Sha Kantilal Jayantilal, Chennai v. Income Tax Officer JUDGMENT (Delivered by Hon'ble Acting Chief Justice) assessee has filed this appeal under Section 260A of Income Tax Act, 1961 aggrieved by order dated 17.12.2008 passed by Income Tax Appellate Tribunal, 'A' Bench, Chennai, in ITA.No.1886/Mds/2007. 2. proposed substantial questions of law raised in present appeal, as suggested in memo of appeal, are quoted below for ready reference: 1. Whether on fact and in circumstances of case Income Tax Appellate Tribunal was right of law in disallowing and bad debts written off by appellant as same was irrecoverable for financial year 2004-2005 relating to bad debts for assessment year 2001-2002 is correct in law? 2. Whether on facts and in circumstances of case Income Tax Appellate Tribunal was right in law in confirming disallowance of interest without considering material documents like TDS Certificate Page 2 of 8 http://www.judis.nic.in Judgment dt. 03.10.2019 in TC(A) No.736 of 2019 C.Jayantilal, Proprietor, Sha Kantilal Jayantilal, Chennai v. Income Tax Officer and other documents is correct in law? 3. Whether on facts and in circumstances of case Income Tax Appellate Tribunal was right in law in rejecting allowance claimed in expenditure head towards telephone and vehicle maintenance expenses is correct in law? 4. Whether on facts and in circumstances of case Income Tax Appellate Tribunal was right in law in confirming addition on low drawings without assigning any legally acceptable reasons is correct in law? 5. Whether on facts and in circumstances of case Hon'ble Tribunal was right in confirming order of Commissioner of Income Tax (Appeals) without recording independent finding based on material facts and circumstances pleaded and argued by appellant is correct in law? 3. relevant portion of order passed by learned Income Tax Appellate Tribunal is also quoted below for ready reference: __________ Page 3 of 8 http://www.judis.nic.in Judgment dt. 03.10.2019 in TC(A) No.736 of 2019 C.Jayantilal, Proprietor, Sha Kantilal Jayantilal, Chennai v. Income Tax Officer 2. grounds raised by assessee in his appeal are that CIT (Appeals) has erred in confirming addition of Rs.10,36,129/- by way of bad debts written off, Rs.93,773/- towards interest, Rs.21,351/- by way of disallowance of expenditure and Rs.25,000/- on ground of low drawings. 3. On other hand, grounds raised by Revenue are that CIT (Appeals) is not justified in deleting addition of Rs.17,71,932/- on account of excess stock and also another addition of Rs.20 lakhs on account of amount declared in assessee's letter. Another ground raised by Revenue is that CIT (Appeals) is not justified in deleting addition made on account of gross profit of Rs.7,05,469/- and also addition of Rs.11 lakhs made against unexplained cash credit. 4. We hard both sides in detail. additions/disallowances made by Assessing Officer in assessment order have been systematically discussed by CIT (Appeals), item by item, in his appellate order. He has recorded ample reasons for deleting various disallowances. Reliefs were granted Page 4 of 8 http://www.judis.nic.in Judgment dt. 03.10.2019 in TC(A) No.736 of 2019 C.Jayantilal, Proprietor, Sha Kantilal Jayantilal, Chennai v. Income Tax Officer only on basis of valid grounds successfully explained by assessee. 5. Therefore, in facts and circumstances of case, we find that issues involved in both these appeals are factual issues, adjudicated by CIT (Appeals) fairly and reasonably on basis of materials available on record. His findings are not perverse. Therefore, we do not find any reason to disturb order passed by first Appellate Authority. 4. matter was placed before Bench of this Court on 24.9.2019 for condonation of delay of 40 days in filing appeal. delay was condoned on 24.9.2019 and that is why matter has been placed for admission before Bench today, though impugned order of learned Income Tax Appellate Tribunal is of very old date, namely, 17.12.2008. 5. Having perused order of learned Income Tax Appellate Tribunal and after hearing learned counsel for some time, we are of clear opinion that such cryptic and non speaking order of __________ Page 5 of 8 http://www.judis.nic.in Judgment dt. 03.10.2019 in TC(A) No.736 of 2019 C.Jayantilal, Proprietor, Sha Kantilal Jayantilal, Chennai v. Income Tax Officer learned Income Tax Appellate Tribunal cannot be sustained at all. learned Income Tax Appellate Tribunal, which is final fact finding body, ought to have discussed facts of case; grounds raised; contentions raised on behalf of assessee and Revenue, and then arrived at finding of fact, giving their own reasons. 6. We do not find any such discussion in three page order passed by learned Income Tax Appellate Tribunal, which has given raise to five substantial questions of law, as stated above. Therefore, we are inclined to remit matter back to learned Tribunal without expressing any opinion on merits of contentions sought to be raised before us. Further, it is expected of learned Income Tax Appellate Tribunal to pass speaking order showing application of mind to relevant facts and law. 7. appeal is, accordingly, disposed of without answering substantial questions of law at this stage. No costs. __________ Page 6 of 8 http://www.judis.nic.in Judgment dt. 03.10.2019 in TC(A) No.736 of 2019 C.Jayantilal, Proprietor, Sha Kantilal Jayantilal, Chennai v. Income Tax Officer copy of this judgment may be sent to President of Income Tax Appellate Tribunal as well as Law Secretary of Ministry of Law and Justice, Union of India, for information. (V.K.,ACJ.) (C.S.N.,J.) 03.10.2019 Index : No sasi To: 1. Registrar, Income Tax Appellate Tribunal, Madras "A" Bench, Chennai. 2. Commissioner of Income Tax (Appeals)-IV Chennai 600 034. 3. Income Tax Officer Ward X(2), Chennai 600 006. __________ Page 7 of 8 http://www.judis.nic.in Judgment dt. 03.10.2019 in TC(A) No.736 of 2019 C.Jayantilal, Proprietor, Sha Kantilal Jayantilal, Chennai v. Income Tax Officer HON'BLE ACTING CHIEF JUSTICE AND C.SARAVANAN, J. sasi Tax Case (Appeal) No.736 of 2019 03.10.2019 __________ Page 8 of 8 http://www.judis.nic.in C. Jayantilal v. Income-tax Officer Business Ward X(2), Chennai