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2023 (4) TMI 748 - HC - Income TaxAddition u/s 68 - entity which had granted the loan, had not responded to the summons - HELD THAT:- Tribunal adopted the correct approach. Merely because the respondent/assessee had not repaid the balance amount and the creditor had not responded to the notice issued under Section 133(6) of the Act could not have been used as a reason by the AO to make an addition. Addition of amount written off by assessee - ITAT deleted the addition - HELD THAT:- Tribunal has returned a finding of fact, that the amount reflected the interest accrued which had been offered for tax in the preceding year. In the AY in issue, since the amount could not be recovered from the debtor i.e., Bell Ceramics Ltd., the respondent/assessee had written off the same. Tribunal came to the correct conclusion, based on the appreciation of the material placed before it. Inter alia, the respondent/assessee not only submitted to the AO/CIT(A), the details of the amount given on loan to Bell Ceramics Ltd., as also the interest accrued from year to year, but also the TDS certificate and interest received on the amount of loan extended to the said entity. The addition, as noted above, was rightly deleted by the Tribunal. Correct head of income - whether the income earned from business centre, run and managed by the respondent/assessee should have been treated as income under the head “income from Business and Profession” or, as held by the AO/CIT(A), as “income from House Property”? - HELD THAT:- Tribunal, in our view, has correctly ruled that the business centre was being exploited by the respondent/assessee as a commercial asset. Therefore, the income from the same, as rightly concluded by the Tribunal, should have been treated by the AO/CIT(A) as business income. Consequently, the deduction of expenses as well as interest on borrowed capital would have to be allowed, in terms of Section 36(1)(iii) of the Act.
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