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2019 (6) TMI 1472 - AT - Income TaxPayment towards cost in respect of plot sold - expenditure incurred by the assessee towards the transfer fees, and the development charges paid to the society in connection with the property held by the assessee - AO not allowing the expenditure incurred in connection with the cost of the plot - HELD THAT:- None of the authorities below, has pointed out any defect in the receipt as discussed above. In case of any doubt on the genuineness of the above receipt/the expenditure incurred by the assessee, the authorities below should have taken the confirmation from the society. But the Revenue has not exercised its power granted under the statute. The assessee incurred all the payments above/expenditures through banking channel. Therefore we hold that the authorities below have made the disallowance of the claim of the assessee without bringing any cogent reason. Therefore, we reverse the order of the authorities below and direct the AO delete the addition made by him. Addition on account of the bad debts/loss incurred incidental to the business - AO disagreed with the claim of the assessee by observing that the assessee did not show the amount of bad debts as income in any of the previous years - HELD THAT:- Bad debts claimed by the assessee on account of the amount recovered by the angel group from the assessee. Indeed, the amount recovered by the angel group from the assessee was not offered by him as income in his books of accounts. Therefore the condition as specified under section 36(2) of the Act has not been satisfied. Therefore, the amount of deduction as bad debts cannot be claimed. We note that the courts have allowed such claim of the assessee as bad debts as the same was incurred in the course of the business carried on by him. Therefore in our considered view, such loss is a business loss and the same is eligible for deduction as bad debts. As relying on BONANZA PORTFOLIO LTD. [2009 (8) TMI 636 - DELHI HIGH COURT] we hold that the loss incurred by the assessee in the course of the business is revenue in nature and the same is eligible for deduction as bad debts. Hence the ground of appeal of the assessee is allowed.
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