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2022 (10) TMI 480 - AT - Income TaxBad debts claimed u/s 36(2)(i) - Assessee debited ‘Amount written off paid against advance of land’ - HELD THAT:- The assessee is a real estate developer. The amount was invested for stock in trade related to his business. The loss was incurred for non utilization of the property and the payment would not be realized in this expectation. The assessee took the amounts in the profit and loss account as loss. In the observation of the CIT(A), the expenditure is taken as a business income and treated the loss as a bad and doubtful debts u/s 36(2). There is change of nature of investment was done by the Revenue authorities which is not accepted in the law. There is no question about the genuinity of the transaction of the assessee. As per accounting policy and general business practice any nature of loss is booked in books of accounts under specific head. But in IT Return the area of declaration is specific which was compelled the assessee to mention the business loss in bad & doubtful coloumn. But the nature of loss cannot be changed which is supported by basic evidence, books of accounts. The catena of judgments which are mentioned above are in favour of the assessee. It is clear that this particular loss is a business loss and assessee is allowable to claim the loss in profit and loss account. Accordingly, the addition amount is to be deleted.- Decided in favour of assessee.
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