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2015 (11) TMI 1203 - AT - Income TaxAddition towards advance given to Mr. R.K Jalan was for purchase of jute - miscellaneous expenses written off - CIT(A) deleted the addition - Held that:- As could be evident from the paper book filed by the Learned AR before us, it is not in dispute that the advance was made for purchase of Jute during the course of business of the assessee. Since the supplies could not materialize, the assessee to protect its money started charging interest and was able to recover a sum of ₹ 23 lacs towards principal portion. The interest income on such advances from Asst Years 1991-92 to 1997-98 have been duly offered to tax by the assessee as business income and assessed as such . Hence it will be factually incorrect to say that the nature of advance was not established by the assessee before the lower authorities. The scrutiny assessment orders of earlier years itself would stand testimony to the contentions of the assessee. Even otherwise, we find that since the trade advance was made during the course of its business by the assessee, any loss on account of recoverability would automatically fall under the category of trade debt and hence is allowable as business loss. We find that the assessee had duly offered the interest income on advance receivable from Shri.R.K.Jalan as business income in the earlier years and the same has been accepted as such by the revenue and hence the ground raised by the revenue is dismissed. Similarly we also hold that no additional evidences were filed by the assessee before the Learned CITA with regard to this issue as the fact of trade advance paid to Shri.R.K.Jalan stands clearly established in the earlier years scrutiny orders placed on record by the Learned AO. Hence the ground raised by the revenue that there is violation of Rule 46A of Income Tax Rules by the Learned CITA is dismissed. It is not in dispute that the assessee had indeed written off the balance principal portion of ₹ 47,02,013/- and interest receivable portion of ₹ 66,46,543/- in its books by treating the same as irrecoverable and due to the death of the concerned party. It is also not in dispute that the corresponding credit is given to the concerned party account in the books of accounts. We are in agreement with the arguments of the Learned AR that even otherwise the entire write off if not allowable in terms of section 36(1)(vii) read with section 36(2) of the Act is allowable as deduction as a regular trading loss u/s 28 of the Act. Interest payable by the assessee to ICICI Bank Ltd - whether ICICI Bank would fall under the category of a Scheduled Bank so as to fall within the ambit of section 43B? - Held that:- We set aside this issue to the file of the Learned AO with a specific direction to give a finding as to whether ICICI Bank Ltd was a scheduled Bank during the relevant assessment year under appeal and if so, the provisions of section 43B of the Act would automatically apply to the assessee
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