TMI Blog2015 (5) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... tted back to the file of the Assessing Officer to examine the issue afresh in the light of the provisions of Section 158BB of the Income-tax Act, 1961 - Decided in favour of revenue for statistical purposes. Disallowance of bad debts - CIT(A) deleted the addition - Held that:- Admittedly, the assessee has not maintained any books of account. Only during the course of search operation, certain materials were found which disclosed the investment made in the money lending business. The assessee claims that the seized material found during the course of search operation referred to an entry of bad debts. However, the Revenue disputed the same. The Ld. D.R. clarified that no such reference was there in the seized material regarding bad debts. Furthermore, the details of money lent to the individuals are not available and with whom the assessee written off the loan amount as bad debts is also not available. In the absence of such details, this Tribunal is of the considered opinion that the issue has to be reconsidered by the Assessing Officer. Accordingly, the orders of the lower authorities are set aside and the issue of bad debts to the extent of ₹ 16,60,000/- needs to be re-e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals), Tiruchirappalli. Let us first take I.T.(SS) A. No. 6/Mds/2011which pertains to block assessment year 1988-89 to 1998-99. 3. Dr. S. Moharana, the Ld. Departmental Representative, submitted that the first issue arises for consideration is with regard to addition of ₹ 12,00,300/- towards undisclosed investment in the money lending business. According to the Ld. D.R., during the course of survey operation, the revenue authorities found that the assessee has made advances to the extent of ₹ 67,38,155/- on 30.11.1997 to various persons. The assessee clarified that the above said sum of ₹ 67,38,155/- was the outstanding amount in his money lending business. The assessee also explained to the authorities that out of ₹ 67,38,155/-, a sum of ₹ 50,02,000/- was the principal amount invested by the assessee. The balance of ₹ 17,36,155/- was the interest received by the assessee from money lending business. 4. During the course of assessment proceedings, it was explained before the Assessing Officer that a sum of ₹ 50,02,000/- represented the total advances made by the assessee as on 30.11.1997 to various persons and ₹ 17,36,155/- r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue with regard to unexplained investment in the money lending business is remitted back to the file of the Assessing Officer. The Assessing Officer shall examine the issue afresh in the light of the provisions of Section 158BB of the Income-tax Act, 1961 (in short 'the Act') and thereafter decide the issue in accordance with law after giving reasonable opportunity to the assessee. It is made clear that the Assessing Officer shall refer to the material found during the course of search and other information available with him which is relatable to the material found during the search operation and thereafter determine the unexplained investment in the money lending business. 7. The next issue arises for consideration is with regard to the claim of the assessee towards bad debts to the extent of ₹ 16,60,000/-. 8. Dr. S. Moharana, the Ld. Departmental Representative, submitted that the assessee claimed bad debts to the extent of ₹ 16,60,000/- out of the total outstanding loan which was determined by the Assessing Officer at ₹ 19,10,300/-. According to the Ld. D.R., the loan was not written off in the books. In response to the Question No.5, during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental Representative, pointed out that during the course of search operation, a pocket diary was found and seized. As per this pocket diary, the assessee found to have invested a sum of ₹ 29,37,400/- in money lending business. On examination of one Shri C. Subramanian, who is son of the assessee, clarified that he is looking after the business of the assessee and the diary was hand written of his father. However, the CIT(Appeals) deleted the addition on the ground that the money lending business is belonging to the assessee s son Shri Subramanian. According to the Ld. D.R., in the absence of any material and in the light of the admission of the assessee s son that the money lending business is belonging to his father, the CIT(Appeals) is not justified in deleting the addition. 13. On the contrary, Shri S. Sridhar, the Ld.counsel for the assessee, submitted that Shri Subramanian, son of the assessee, filed his return of income disclosing profit in the money lending business. The Assessing Officer accepted the return filed by the assessee and assessed the income with regard to the very same investment. When the Assessing Officer accepted the return of the assessee s son, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that there was no seized material. In fact, there was seized material, which was referred by the Assessing Officer in the assessment order. 17. On the contrary, Shri S. Sridhar, the Ld.counsel for the assessee, submitted that there was no seized material with regard to undisclosed investment in the construction of house found during the search operation. On a query from the Bench when the Assessing Officer referred seized material, more particularly, VSR/B D/S-4, how the CIT(Appeals) came to a conclusion that there was no seized material? The Ld.counsel submitted that in such a case, what is to be added is the valuation on the basis of State PWD rates. In this case, according to the Ld.counsel, the valuation made by the V.O. was based on the Central PWD rates. If the valuation was made on the basis of State PWD rates, the addition made by the Assessing Officer would reduce considerably. 18. We have considered the rival submissions on either side and perused the relevant material on record. The seized material found during the search operation which was marked as VSR/B D/S-4 shows the cost of construction from 03.07.96 to 1.12.97 at ₹ 23,48,748/-. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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