TMI Blog2014 (2) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... s carried forward – thus, the claim of the assessee allowed – the order of the CIT(A) set aside – Decided in favour of Assessee. Addition on account of loans u/s 68 of the Act – Held that:- The assessment order has been passed by AO ex-parte - The assessee was a sick company and was under rehabilitation scheme by BIFR – thus, in such a situation the difficulty faced by the assessee in filing the confirmation and other evidence before AO has to be appreciated and these additional evidences were required to be considered by CIT(A) as the same were useful in deciding the issue - the additional evidences admitted in the form of loan confirmations as done by the Tribunal in assessment year 2004-05 – the order of the CIT(A) set aside and the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim was disallowed. 3. The assessee disputed the decision of AO and submitted before CIT(A) that the assessee company was under lock out and had been declared a sick company by BIFR. There was, therefore, temporary suspension of the business activity and the business had not been closed permanently. The assessee had incurred day to day expenses for revival of the company which should be allowed as business income. CIT(A) however did not accept the contentions raised. It was observed by him that it was not possible that the companies would go into production in the coming years. It was also observed by him that the expenses claimed to have been incurred for revival and reconstruction of the company, had not been incurred for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness expenditure. The AO allowed only a sum of Rs. 1,00,000/- out of these expenses holding that the assessee had not carried any business activity. In appeal CIT(A) has held that there was no possibility of starting the business again and, therefore, expenses are not allowable. Alternatively he also held that the expenses were of the nature of capital and thus could not be allowed. We find that similar disallowance on the ground of no business activity had been made by AO in assessment year 2004-05 of the expenses claimed at Rs. 2,14,27,876/-. The assessee had disputed the matter before Tribunal and the Tribunal in the order dated 26.4.2013 (Supra) held that the expenditure was not capital in nature and since there was no permanent closu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m five parties only subsequent to the date of hearing on 14.10.2009. CIT(A) did not admit the additional evidences on the ground that the assessee had not been prevented by any sufficient cause from production of the same before the AO during the assessment proceedings. CIT(A) accordingly confirmed the addition made by AO u/s 68 of the Income Tax Act. Aggrieved by the decision of CIT(A), the assessee is in appeal before Tribunal. 7. Before us, learned AR for the assessee submitted that the confirmations had been filed before CIT(A) on the date of hearing which were required to be considered for the purpose of adjudication of the issue. It was pointed out that the copies of confirmations had been placed at pages 29 to 32 of the paper book. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estore the matter to the file of AO for passing afresh order after necessary examination and after allowing opportunity of hearing to the assessee. 9. The assessee has also filed an additional ground regarding treatment of income of Rs. 197800/- received from sale of scrap as income from other sources by the AO. The assessee has also raised specific ground before CIT(A) which was not accepted by him being the ground no. 2. We, therefore, admit the additional ground which is arising from the orders of authorities below. The assessee has claimed that the income had arisen from sale of scrap. However, we find that nature of receipt has not been examined by the authorities below. We, therefore, consider it necessary that issue be examined afr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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