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2019 (11) TMI 1178 - AT - Income TaxBad Debts written off disallowed - HELD THAT:- AR has stated at the Bar that at no point of time the assessee was engaged in industrial activity or the objects of the assessee were amended to include carrying on of industrial activity as its business. Hence, there is no question of purchasing land to set up any industrial activity. We find merit in the contentions of the assessee. The inevitable conclusion that can be drawn from examining the documents on record and facts of the case is that the industrial plot was held by the assessee as stock in trade. Since, the assessee failed to recover the advance paid which was forfeited by the Vendor of the plot in line with the terms and conditions of agreement dated 07-12-2005, the assessee had no other option but to write off the same. As per terms and conditions of the agreement of sale, the assessee had paid ₹ 10 lakhs at the time of execution of agreement, whereas, the assessee has written off ₹ 25 lakhs. The authorities below have not examined the amount which the assessee has paid as advance for the purchase of industrial plot. Therefore, we deem it appropriate to restore this issue back to the file of Assessing Officer for limited purpose to verify the amount paid by the assessee as advance for purchase of industrial plot. In principle, we are of the view that advance paid by the assessee towards purchase of plot had become irrecoverable and hence, the claim of assessee deserves to be allowed.
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