TMI Blog2016 (6) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... d since the department had altered the nature of income from capital gains to business income, assessee accepted the said decision of the department and has been offering the income under the head ‘business’, though the said shares have been continued to be shown as investments in the balance sheet. Facts have not been different to the earlier A.Ys. 1992-93 & 1993-94, wherein Assessing Officer himself treated the sale of shares as business income/loss. AO cannot keep changing the head of income without bringing new material on record. Therefore, loss on sale of shares was rightly directed to be treated as business loss. Disallowance of bad debts - Held that:- Since the provision was debited in P&L account last year the same was not debi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Explanation 1 to sec 147 of the Act. 2. On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in treating the 'Loss on sale of investment' amounting to ₹ 7,30,31,599/- as business loss, without appreciating the fact that the loss pertained to sale of long term investment as exhibited in schedule E of the Balance Sheet, being a capital loss. 3. On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in deleting the addition made on account of bad debts written off amounting to ₹ 10,97,05,670/- without appreciating the fact that the provision for 'doubtful receivable' of ₹ 10,97,05,670/- has not written off in the hoods of account by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, assessee also claimed the same deduction during the year under consideration. Assessee claimed the same as bad debts. Since the assessee has not written off the same as bad debts, the Assessing Officer disallowed the sum of ₹ 10,97,05,670/- and added the same to the income of assessee. The assessment u/s.147/143(3) of the Act was completed on 29.12.2010 determining total income at ₹ 18,27,37,269/-. 2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and after considering the same, CIT(A) allowed the ground of assessee. 2.2 The stand of assessee has been that since proceedings have been initiated u/s.147 of the Act on the basis of information/ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s income or loss which has also not been disturbed by the Assessing Officer till A.Y. 2005-06. The return of income filed for the assessment year 2005-06 contain a footnote in the computation of total income that the company is holding shares, debentures etc. as investments in group companies and the gain or loss on disposal of shares/debentures have been treated as business income/loss as per the last assessments. Once such note has been appended and the assessment has been concluded u/s 143(3) of the Act, there would be no reason for the reopening of the assessment on the said ground. Assessing Officer is not permitted to review u/s. 147 of the Act of the earlier decision taken by him in the absence of there being any material to come to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for both the years. Assessing Officer himself had assessed the income or loss on account of sale under the head profit gains from business instead of income of capital gains shown by assessee, which has been followed by assessee consistently. Assessing Officer has not given any reason except stating that the assessee had shown the said shares as long term investments in the balance sheet. In this regard, CIT(A) observed that assessee has been showing said shares as investments in the balance sheet and since the department had altered the nature of income from capital gains to business income, assessee accepted the said decision of the department and has been offering the income under the head business , though the said shares have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstead the assessee claimed deduction only in the computation of income for A.Y. 2005-06. Assessee explained necessary entries were passed in the books of account with reference to write off of bad debts. The entries passed by assessee have been verified and found to be correct. So, following the decision of Hon'ble Supreme Court in the case of TRF Ltd. vs CIT [323 1TR 397], the addition made on account of bad debts written off of ₹ 10,97,05,670/- was rightly deleted by CIT(A). This reasoned factual finding of CIT(A) needs no interference from our side. We uphold the same. 5. As a result, appeal filed by Revenue is dismissed. Pronounced in the open Court on this the 24th day of June, 2016. - - TaxTMI - TMITax - Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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