Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 241 - ITAT JAIPURAddition on account of bad debts - Held that:- CIT(A) has decided this case on bad debt written off itself. No opinion has been expressed by the ld CIT(A) on business loss. We find that the assessee has advanced this money for the business purposes but this amount has not been accounted for in previous year as income. Therefore, order of the ld CIT(A) is not justified allowing the bad debt U/s 36(1)(vii) of the Act, but it is business loss as amounts were advanced for business purposes. The assessee also claimed bad debt of ₹ 2,87,930/-, which was advanced to Shri Mohiuddin, who was designer and served the firm on remuneration basis. The advance was adjusted against the salary but suddenly he left the assessee’s job and recovery could not be made out by the assessee, but there is no evidence with the assessee to demonstrate that Shri Mohiuddin was in employment and has expertise in designing carpet and also worked with the assessee. No income from this advance has been accounted for in the previous years. Therefore, we upheld the order of the ld CIT(A) for business loss to the tune of ₹ 1.45 crores and confirmed the addition of ₹ 2,87,930/- as advanced to Shri Mohiuddin and claimed as bad debt. - Decided partly in favour of assessee Disallowance under the head various expenses - CIT(A) restricted the addition @ 10% as against 15% done by AO - Held that:- It is difficult to get bill of each and every expenditure incurred by the assessee particularly taxi, rickshaw, tea etc, therefore, no reason to intervene in the order of the ld CIT(A). Accordingly, we uphold the order of the ld CIT(A)
|