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2021 (5) TMI 904 - AT - Income TaxAddition u/s. 69 based on information received from Australian Tax authorities - HELD THAT:- Addition is solely made on the basis of statement of the assessee’s son before Australian Tax Authorities and affidavit by the assessee before them that fund found in possession of the son were arranged by assessee by hawala transaction. When confronted by the investigation department of the Revenue, the assessee has rebutted the above allegation. The rebuttal or refusal by the assessee has only been referred by the A.O. without bringing on record the actual rebuttal. There is absolutely no other material in the hand of the A.O. of proving the addition in the hands of the assessee. Despite the assessee’s request, the copy of information received from Australian tax Authority has not been given to the assessee. In these circumstances, the addition made, which is based upon the information from a foreign source, without confronting the same to the assessee and without any corroborative material is not at all sustainable. Deduction u/s 36(1)(vii) r.w.s. 36(2) - assessee has written off the balance loan outstanding in profit and loss account - company has not returned the loan to the assessee and it has become time barred - HELD THAT:- We find that the assessee’s claim is that the assessee has given a loan to a party in the course of business several years ago. Since, the party has not repaid the loan and it has requested its name to be struck off from the Register of company by ROC, the assessee has claimed it u/s.36(2) as bad debt. The revenue has held that this cannot be allowed as it was not a debt which has been written off. We note that if a loan is no longer recoverable that can be considered as a loss and allowed u/s.37(i) of the Act. Quoting a wrong section is not falal. Hence, the fact that the amount has become irrecoverable needs to be examined. Hence, we remit the issue to the file of the A.O. to examine the case of the assessee in light of our observation as above. Needless to add that the assessee should be given an opportunity of being heard.
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