TMI Blog2012 (11) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... - SUPREME COURT) wherein held that after the assessment of section 36(1)(vii) w.e.f. 01.04.1989, in order to obtain a deduction in relation to bad debts it is enough of the bad debt is written off as irrecoverable in the accounts of the assessee - in favour of revenue for statistical purpose. - I.T. A. No.180/AHD/2007 - - - Dated:- 19-10-2012 - SHRI G.C.GUPTA SHRI ANIL CHATURVEDI, JJ. Appellant by: Mr. Rahul Kumar Sr. D. R. Respondent by: Mr. Gaurav Nahta. ORDER PER: SHRI ANIL CHATURVEDI, A.M. In this case the original order was passed by the Tribunal on 24-2- 2010 and thereafter the assessee filed Misc. Application No.10/AHD/2011 dated 29-12-2010 for recalling order in ITA No.180/AHD/2007 passed on 24-2-2010. 2. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also reflected by the assessee under the head loans and advances. He accordingly disallowed the claim of bad debts of the assessee. Aggrieved by the action of A.O. assessee preferred appeal before the CIT (A). 3. CIT (A) allowed the appeal vide his order dated 12-10-2006 by holding as under:- 3. The second and third grounds of appeal relate to addition of Rs.22,25,000/- on account of bad debts. The assessee had given loan of Rs.15,75,000/-to Shri Manoj Jain and Rs.6,50,000/- to Shri V. Muthuswamy, which was not realized addition the assessee claimed it as bad debt after writing off the same in the books of account. The A.O. has disallowed the claim of bad debt on the ground that it cannot be said to be transactions in the normal co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent by holding as under:- 7. We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the case records and arguments of both the sides that the amount written off is on account of unsecured loans and not a business loan as these loans were interest free. We find that these loans were not related to business and from the case it cannot be said that the transaction of the loan was in the normal course of business even though the assessee has written it off in its books of account. We find force in the arguments of the Ld. D.R. that the amount written off pertains to advances made to above parties, which was never included at any point of time in the income by the assessee, so the claim is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide order dated 13-7-2012 by holding as under:- 2. .While deciding the appeal the Hon ble Bench has observed as under:- We find from the case records and arguments of both the sides that the amount written off is on account of unsecured loan and not a business loan as these loans were interest free. 3. There is nothing on record to suggest that said advance was not a business advance. The A.O. as well as Ld. CIT (A) both have stated the fact that assessee was engaged in business of giving finance. Therefore, the order dated 24-2-2010 may kindly be recalled and the matter may kindly be reheard and decided accordingly. However, Ld. D.R. submitted that there is no mistake apparent from the record and therefore, the M..A. of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee the same is to be allowed as deduction. 7. The Ld. D.R. on the other hand submitted that the assessee did not receive any interest at any time from these parties and thus loans were shown under the head loans and advance. He further pointed out that the amount of advance written off was never included as income by the assessee. He thus, supported the order of A.O. 8. We have heard the rival submissions and perused the material on record. On the basis of material on record we find that in the present appeal the dispute is whether the advance was in the nature of business advance and therefore, whether the bad debts written off is to be allowed as a bad debt. We find that the A.O. in the order has given a finding that the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
