NLDK Timbers Pvt. Ltd. Vs ACIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed the appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), relating to Assessment Year 2011-12. The dispute concerned the validity of reassessment proceedings initiated under Sections 147 and 148 of the Income-tax Act, 1961.
The assessee had originally filed its return of income declaring total income of ₹90.70 lakh. Assessment under Section 143(3) was completed on 28 March 2014 determining total income at ₹91.53 lakh. Subsequently, reassessment proceedings were initiated on the ground that the assessee had claimed bad debts amounting to ₹2.99 crore, including foreign receivables of ₹2.91 crore due from a foreign company. The Assessing Officer (AO) held that the assessee had not produced any communication from the Reserve Bank of India approving the write-off of foreign receivables and consequently disallowed the claim relating to such bad debts.
The Commissioner (Appeals) upheld both the reassessment proceedings and the disallowance. The assessee challenged the order before the Tribunal, contending that all details relating to the bad debt claim had already been furnished during the original assessment proceedings. It was argued that reopening the assessment on the basis of the same material amounted to a mere change of opinion. The assessee further submitted that the reasons recorded for reopening did not allege any failure on its part to disclose fully and truly all material facts necessary for assessment.
