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2023 (7) TMI 276 - ITAT CHENNAIInvestment write off - business loss OR capital in nature - assessee ceased to function and its books of accounts, files, records and other documents were taken in possession by official liquidator and other investigating agencies - HELD THAT:- Official liquidator had sold the investments held by the assessee and the amounts were appropriated by the Official Liquidator but no details were made available to the assessee. Consequently, it was not possible to update the accounts of the company. The balances as on 31.03.1999 were carried forward from year-to-year till 2013. After revival of the company, a review of the investments, current assets and current liabilities was made and necessary accounting entries were affected in the books of accounts in this year in order to reflect the correct balances. It could thus be seen that it was case of restatement of assets and liabilities at correct value in the absence of information forthcoming from official liquidator. No real income accrued to the assessee. Upon perusal of financial statements, it could be seen that the assessee has not earned any income from business operations but the credit to Profit & Loss Account merely constitutes similar write-backs etc. Therefore, the disallowance as made by lower authorities could not be upheld. AO is directed to re-compute the income / loss of the assessee.
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