TMI Blog2015 (9) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... any trading transactions of these products in the current year but the business of the assessee has not come to a halt. No doubt, criminal complaint filed by the assessee had not reached finality and the persons, who allegedly and fraudulently obtained these advances, were on bail given by Hon’ble High Court, the remote possibilities of recovery did not take away assessee’s right to claim reasonably foreseeable business loss. Learned CIT(A) has given categorical and detailed findings about these advances having become actually bad and these findings remain uncontroverted As regards learned CIT(A)’s having confirmed the disallowance of business loss in respect of monies unrecoverable from Quality Foods (Rs.7,12,500) and S.N. Das Freight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming the disallowance of the claim of bad debts/trading loss for ₹ 10,11,887 in respect of M/s. Quality Foods and S.N. Das Freight Forwarders Pvt. Ltd. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT ought not to have upheld the disallowance of the claim of bad debts/trading loss for ₹ 10,11,887/- in respect of M/s. Quality Foods and S.N. Das Freight Forwarders Pvt. Ltd. Grievance raised by the Assessing Officer 1. The learned CIT(Appeals) has erred in law and on facts in deleting disallowance of ₹ 4,95,02,105/- without appreciating the fact that the claim of the assessee is not incidental to regular business activity carried on by the assessee. Trading of goods in which the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) S.Y.P. Exporter F.Y. 2004-05 Rs.17,00,000 Advance given for purchase of potato powder (5) S.N. Das Freight Forwarders Pvt. Ltd. F.Y. 2005-06 Rs.2,99,387 Irrecoverable amount on transportation (6) Sakar Overseas Pvt. Ltd. F.Y. 2004-05 Rs.2,72,11,993 Advance given for purchase of dehydrated onion flakes (7) Shree Ram Trading Co. F.Y. 2004-05 Rs.2,05,90,112 Advance given for purchase of sesame Seeds Total Rs.5,24,59,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions received from the assessee, as also accompanying supporting documents, were confronted to the Assessing Officer and remand report was also obtained from the Assessing Officer. Learned CIT(A) concluded that to the extent transactions in question were not disputed and the assessee has demonstrated that loss has actually incurred, the same is to be allowed as deduction as business loss. It was also noted that the assessee had exported substantial qualities of agricultural processed goods, including dehydrated garlic flakes and white onion power, and it was in this connection that the assessee bonafide and in the course of normal business gave advances to S.Y.P. Exporter, Sakar Overseas Pvt. Ltd. and Shree Ram Trading Co. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness carried on by the assessee, it should not be allowed as a deduction. However, it is an undisputed position that the assessee did in fact trade in processed agricultural produce, in connection with which advances in question were made, and it was in the course of this trading that business loss of making unrecoverable advances was incurred. The losses were thus wholly incidental to the business carried on by the assessee. There may not be any trading transactions of these products in the current year but the business of the assessee has not come to a halt. No doubt, criminal complaint filed by the assessee had not reached finality and the persons, who allegedly and fraudulently obtained these advances, were on bail given by Hon ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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