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2020 (5) TMI 461 - AT - Income TaxAllowability of the bad debts or business loss - HELD THAT:- AO as well as the Appellate Authorities under the law can review the facts of the case and redetermined the taxability of income and the claims to be allowed against the same in the subsequent years and if certain mistake or wrong decisions has been rendered in the earlier years, the same cannot be perpetuated for subsequent year and it will not be a legal impediment even though the assessment for the earlier years has attained finality. Another important thing is that the claim of income or loss or any deduction has to be examined afresh in the year in which it is claimed. Law as culled out from the aforesaid judgment is that the bad debt or loss which is claimed in this year has to be determined in this year only without distributing the earlier assessment which has attained finality, and therefore, we hold that the claim of loss made in this year is allowable as business loss. Business loss or bad debt - Set off - One fundamental principle while deciding such kind of matters is that, tax due should be collected as enshrined in the taxing statute and which is also the mandate of the Constitution of India. Here assessee is fastened with tax liability on a hypothetical income which did not materialize /received and in this situation a justice oriented approach is warranted when assessee has, on one hand incurred huge loss and on other, tax is charged merely on technicality that, since assessee had offered the tax under one particular head which it is claiming in this year to be set-off in the other head, is precluded from doing so. When assessee itself has pointed out its bonafide and legal claim before the AO that correct head in which it is assessable is ‘business income’, then acquiescence by the assessee in earlier year cannot be the ground to tax the same or deny any legal claim. We hold that the claim for the amount as business loss or bad debt is allowable in revenue account in this year and is allowed to be set-off in the revenue account as claimed by the assessee and not as a capital loss. - Decided in favour of assessee. Addition pertaining to sale of property in terms of Section 50C - Reference to DVO - HELD THAT:- Before the Appellate Authority, the assessee has categorically stated that though the circle rate of the vicinity area was higher than prevailing market rate but the land in question which was sold was adjacent to cremation ground which adversely affected the market rate of the property, and therefore, the property could not be fetched the circle rate and was sold at the lower rate than the circle rate. As the buyer who has to contest the stamp value of the property before the Valuation Authority in which assessee has no control. In any case, when the assessee has disputed the stamp duty valuation because of clinching circumstances, then in our opinion matter should have been referred to DVO for the valuation of the said property. Accordingly, we remand this issue to the file of the Assessing Officer who shall refer the matter for the valuation of the property to the DVO and assessee will substantiate its case before the AO or DVO to justify the sale price. Accordingly, this ground is partly allowed for statistical purpose. Disallowance u/s.14A - suo motu disallowance - HELD THAT:- It is an admitted fact that firstly the dividend yielding investment were only ₹ 4,54,065/- and disallowance @ 0.5% worked out to ₹ 2196/- which has been suo motu offered for disallowance in the return of income. This Tribunal in assessee’s own case in the case of Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] held that average value of investment which has yielded income during the year shall only be considered for the purpose of disallowance u/s.14A, and therefore, respectfully following the same no addition over and above can be made. In any case, the dividend income received by the assessee is merely which in any case the disallowance could not have been exceeded the exempt income. Thus, the order of the ld. CIT(A) is upheld and the grounds raised by the Revenue is dismissed.
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