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2022 (10) TMI 982 - AT - Income TaxAddition towards loss of chit - assessee has subscribed for chit fund and made a premature drawing and incurred loss - assessee has claimed chit loss as business loss on the ground that the chit fund has been used for the purpose of business - AO had disallowed chit loss on the ground that the subscription to chit is mutuality and any gain on chit fund is exempt from tax and consequently, loss on chit cannot be allowed as deduction - HELD THAT:- We find that, the CIT(A) has deleted the addition by following decision of V. Raj Kumar [2014 (3) TMI 388 - MADRAS HIGH COURT] where as clearly held that any profit or loss arising from the chit subscription activity is liable for taxation and consequent loss of chit is a allowable deduction. The finding of facts recorded by the Ld. CIT(A) in light of decision of Jurisdictional High Court of Madras, V. Raj Kumar vs CIT is uncontroverted by the Revenue. Therefore, we are inclined to uphold the findings of the Ld. CIT(A) and reject ground filed by the Revenue. Unexplained credit u/s. 68 - AO has made addition towards unsecured loan taken from M/s. D.S. Metal (P) Ltd and M/s. Shakthi Metals and Steels, on the ground that the assessee could not submit necessary evidence including confirmation letters from the party - CIT(A) deleted addition on the basis of confirmation letters filed by the assessee - HELD THAT:- Admittedly, the assessee could not file confirmation letters before the AO. However, the assessee has obtained confirmation letters from the creditors and submitted before the CIT(A). Although, CIT(A) has furnished additional evidence along with confirmation letters to the AO, but the AO chose not to comment on additional evidence filed by the assessee. Therefore, on this ground itself, the addition made by the AO cannot be sustained. CIT(A) has discussed the addition made by the AO in light of confirmation letters filed by the assessee and has recorded categorical finding that the assessee has proved unsecured loan, claims to have been received from M/s. D.S. Metal (P) Ltd and M/s. Shakthi Metals and Steels. The factual findings recorded by the Ld. CIT(A) is uncontroverted by the Revenue. Therefore, we are of the considered view that there is no error in reasons given by the CIT(A) to delete addition. Appeal filed by the Revenue is dismissed.
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