TMI Blog2019 (11) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has paid as advance for the purchase of industrial plot. Therefore, we deem it appropriate to restore this issue back to the file of Assessing Officer for limited purpose to verify the amount paid by the assessee as advance for purchase of industrial plot. In principle, we are of the view that advance paid by the assessee towards purchase of plot had become irrecoverable and hence, the claim of assessee deserves to be allowed. - ITA No.840/PUN/2012, CO No.35/PUN/2013 (out of ITA No.840/PUN/2012) - - - Dated:- 21-11-2019 - Shri D. Karunakara Rao, Accountant Member And Shri Vikas Awasthy, JM For the Assessee : Shri Sanket Joshi For the Revenue : Shri S.B. Prasad ORDER PER VIKAS AWASTHY, JM : This appeal by the Revenue and Cross Objections by the assessee are directed against the order of Commissioner of Income Tax (Appeals)-I, Nashik, dated 23-02-2012 for the assessment year 2009-10. 2. The brief facts of the case as emanating from records are; the assessee is a company engaged in the business of trading and development of land. The assessee filed its return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar No. 3 of 2018 dated 11-07-2018 thereby enhancing monetary limit of tax effect from ₹ 20 Lakhs to ₹ 50 Lakhs for filing of appeals by the Department before the Tribunal. Thus, without going into merit of the issues raised in the appeal, the present appeal of the Revenue is dismissed on account of low tax effect. 7. Before parting, we clarify here that the Revenue shall be at liberty to approach the Tribunal for restoration of appeal, with the requisite material to show that the appeal is protected by the exceptions prescribed in Para 10 of the Circular dated 11-07-2018 and its amendment dated 20-08-2018. 8. In the result, the appeal of Revenue is dismissed. CO No.35/PUN/2013 9. The assessee in Cross Objection has impugned the findings of CIT(A) in confirming the disallowance of Bad Debts written off ₹ 25,00,000/-. 10. The ld. AR submitted that if the appeal of the Revenue is dismissed on account of low tax effect, the Cross Objections filed by the assessee would still be maintainable and shall be treated as an independent appeal. In support of his contentions, the assessee placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed that a perusal of Balance Sheet as on 31-03-2006 would clearly show that the advance paid for purchase of land was not reflected under the investments or as fixed assets. The Assessing Officer has erred in coming to the conclusion that the assessee intended to purchase the land for setting up an industry by misreading clause (9) of the agreement. The ld. AR submitted that the assessee is a company registered under the provisions of the Companies Act, 1956. The object clause of Memorandum of Association does not permit the assessee to carry out industrial / manufacturing activities. The ld. AR referred to the Memorandum of Association of the assessee company at pages 91 to 108 of Paper Book. The ld. AR submitted that the assessee has never amended its Object Clause to include setting up of an industry or to carry out any manufacturing activity as its business. The Ld. AR further pointed that the CIT(A) has confirmed the findings of Assessing Officer in a mechanical manner without appreciating the facts and the documents on record. 14. On the other hand, ld. DR vehemently defended the order of CIT(A) in confirming the addition of ₹ 25 lakhs by disallowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of Revenue and cross appeal by the assessee were disposed of by the Tribunal vide common order. However, the Cross Objection of assessee in the appeal filed by Department for same assessment year was listed separately. The Tribunal treated the Cross Objection as an independent appeal and adjudicated the issues raised therein by an independent order. 17. In the light of above decisions, the Cross Objection of assessee is treated as an independent appeal and is taken up for adjudication on merits, dehorse the fact that the appeal of Revenue is dismissed on account of low tax effect. 18. The assessee in Cross Objection has raised solitary ground against the findings of CIT(A) in confirming the findings of Assessing Officer in making addition of ₹ 25 lakhs, written off as bad debts by the assessee. 19. The assessee had entered into an agreement for purchase of industrial plot with M/s. Parasrampuria Industries Limited on 07-12-2005 for a total consideration of ₹ 1,17,60,000/-. As per the terms of agreement (at pages 16 to 22 of the Paper Book), the purchaser / assessee was required to pay ₹ 10 lakhs to the Vendor at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement dated 07-12-2005, the assessee had no other option but to write off the same. 20. However, we observe that as per terms and conditions of the agreement of sale, the assessee had paid ₹ 10 lakhs at the time of execution of agreement, whereas, the assessee has written off ₹ 25 lakhs. The authorities below have not examined the amount which the assessee has paid as advance for the purchase of industrial plot. Therefore, we deem it appropriate to restore this issue back to the file of Assessing Officer for limited purpose to verify the amount paid by the assessee as advance for purchase of industrial plot. In principle, we are of the view that advance paid by the assessee towards purchase of plot had become irrecoverable and hence, the claim of assessee deserves to be allowed. Thus, the ground No.1 raised in Cross Objection by assessee is allowed for statistical purposes, in the terms aforesaid. 21. The ground No.2 of Cross Objection is general in nature, hence, no adjudication. The Cross Objection of the assessee is allowed for statistical purposes. 22. To sum up, the appeal by Revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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