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2017 (5) TMI 1796 - AT - Income TaxDisallowance being grant given by the appellant to Sabarmati Salt Farmers Society and claimed as deductible expenditure u/s.36(1)(xii) - HELD THAT:- It is essential to bear in mind the fact that the reason of disallowance, in the original assessment proceedings, was that there was, according to the AO, a possibility of the amount coming back to the assessee, and, for that reason, amount could not be treated as having been spent. Merely because the assessee has not been able to file the fund utilization report cannot be ground enough to disallow the claim of the assessee. There is no dispute that the amounts were advanced in the course of the business of the assessee, and it has not even been case of the AO either, and, there is also no dispute that this amount is no longer recoverable from the Sabarmati Salt Farmer’s Society as it has been wound up. In these circumstances, the objection taken by the AO, in the original assessment proceedings, does not hold good any longer. In any case, as the assessee rightly claims, it is at best, even going by the improvised version of the AO, a case of bad debt or a loss incidental to business which is allowable anyway. CIT(A)’s action of upholding the disallowance, for want of fund utilization report, is thus unsustainable in law and on the facts of this case. The approach adopted by the authorities below in interpreting the terms of remand is too pedantic and hyper technical to meet our approval. The directions given by the Tribunal are to be interpreted in the light of its object and context. That consistently has been approach of the Hon’ble Courts above. We uphold the plea of the assessee and direct the Assessing Officer to delete the impugned disallowance. - Decided in favour of assessee.
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