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2021 (11) TMI 312 - AT - Income TaxDisallowance of long term capital loss - CIT(A) confirmed the disallowance made by the AO by holding that no sale deed has been produced either before the AO or before the undersigned that transfer of the property had indeed taken placed in the year under consideration - HELD THAT:- Even before us, the assessee failed to submit the sale deed, if any, issued by the authority to establish that the property had been transferred in the year under consideration. Mere considerations received and possession handed over without any documentary evidence for enjoyment of the property to the buyer is not sufficient, hence, the section 2(47)(vi) is also not applicable. As per the documents available, we find that the transaction was done in the financial year 2009-10 and till the date of hearing, the assessee is unable to rebut the finding of the assessing officer in regard to non-submission of the sale deed. As in the case of CIT Vs. Balbir Singh Maini [2017 (10) TMI 323 - SUPREME COURT] has settled the issue in respect of the transfer of the property where the registered sale deed has not been executed in favour of the prospective buyer. We uphold the order of the CIT(A) in confirming the AO's action in disallowing the assessee's claim of long term capital loss - As it is clear from the order of AO that the assessee can offer income under the head “long term capital gain” in the year in which the land is duly transferred in all respects as per the above cited decision to the proposed buyer to which the assessing officer can decide the issue as per law in the respective year. Disallowance u/s 14A rwr 8D(2)(iii) - HELD THAT:- We do not accept the contention of the assessee that no administrative/ managerial expenses incurred by the assessee for earning exempt income. Assessee earned dividend income which is exempt u/s 10(34)/10(35). The findings given by the CIT(A) are not in accordance with rule 8D(2)(iii). The disallowance can be made under this rule only on 0.5% of the average value of investments which yield exempt income. The assessee has received dividend from the investments as quoted in the above table and the average value of these investments is ₹ 53,03,543/- and 0.5% of the average value comes to ₹ 26,518/-. Therefore, the disallowance is to be restricted to ₹ 26,518/- and assessee gets relied of ₹ 51006/-, hence, this ground of assessee is partly allowed. Assessee claimed bad debts regarding receivables from C&F agents - HELD THAT:- On going through the financial statements, in the P&L account bad debts/advances/deposits written off of ₹ 4,28,33,731/-, which includes 90,01,443/-, which is the disputed amount. The ld. CIT (A) has rightly allowed this issue after relying on the judgement TRF. LTD. [2010 (2) TMI 211 - SUPREME COURT] we do not find any infirmity in the decision of CIT(A) in directing the AO to allow the claim of bad debts of ₹ 90,01,443/- and upholding the order of CIT(A) on this count, we dismiss the ground No. 02 raised by the revenue on this issue. Addition deposits/advances written off by the assessee - HELD THAT:- To claim bad debts, the amounts must be treated as income but, the issue in dispute relates to advance/deposits which have never been considered as income of the assessee. Even if it is considered as expenditure u/s 37(1) of the Act, the expenditure must be crystalized during the impugned AY, but, the assessee failed to produce any documentary evidence to substantiate its claim that the parties to whom advances have been given as per pages 23 & 24 of the paper book that the parties were refused to pay back the advances. In support of our decision, we rely on the coordinate bench in the case of Elite International (P.) Ltd.[2017 (6) TMI 494 - ITAT MUMBAI] - The case law relied on by the assessee cited supra as well as relied on by the ld. CIT(A) are not applicable to the case of the assessee. In view of the above observations, we set aside the order of the CIT(A) and restore that of the AO on this issue.
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