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2016 (5) TMI 850 - AT - Income TaxUnexplained cash credit u/s 68 - Held that:- The assessee had brought the loan balances from these three parties to Nil as on 31.3.2009 in its books of accounts. It is not in dispute that the assessee was indeed carrying on money lending business in the past and had derived interest income thereon. This is quite evident from the copy of audited balance sheets filed by the assessee for the years ended 31.3.1998 and 31.3.1999, wherein the interest income is admitted by the assessee as income from business. It is also not in dispute that the revenue had also accepted the same as income from business in the past. It is not in dispute that the assessee had continued to carry on its money lending business. It is also not in dispute that the lending to these parties were made in the ordinary course of money lending business of the assessee. Since the assessee has claimed that the monies have been realized from these parties, it is estopped from proceeding against these parties from making any recoveries. It is also not in dispute that the assessee had brought the balances of these parties to Nil as on 31.3.2009 in its books of accounts. Hence the assessee is entitled to claim the balances of these three parties as a trading loss u/s 28 of the Act. Thus we find lot of force in the alternative argument of the assessee that the non-recovery of the loan dues , according to Learned AO, should be allowed as a deduction as regular business loss from money lending activity , which in turn would only go to increase the business loss of the assessee for the year under appeal and the same would in turn be available for set off against the alleged income from other sources u/s 68 of the Act. Hence in any case, no addition could be made in the hands of the assessee - Decided in favour of assessee
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