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TMI Blog2019 (6) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... ,74,8807- being directly connected with the cost of plot ought to have been allowed while computing capital gain. It be allowed now. 2 The Id CIT(Appeals) erred both in la wand on facts in not allowing the claim of deduction of Rs. 54,87,0277- as bad debt or loss incidental to business ignoring the fact that income from the business transactions relating to such bad debts was already being taxed. The CIT (appeals) failed to appreciate and consider the judgments cited before him regarding claim and comment how the same were not applicable to the appellant's case. The deduction of Rs. 54,87,0277- be allowed now. 3 The Id CIT(AppelasO also erred in law and on facts in not allowing deduction of electricity expenses of Rs. 46,4567- when the corroborative evidence regarding electricity bill and payment by cheque was furnished. The deduction of Rs. 46,4567- be allowed now. 4 The Id CIT(Appeals) ought to have allowed the appeal in toto. The claim of deductions made be allowed and additions /disallowances made as above in returned income be deleted. 5 The appellant craves leave to add, amend, alter, edit, delete, modfy or change all or any of the grounds of appeal at time of or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by observing as under: "3.6. The facts of the case and the submissions are considered. While calculating the long term capital gain the appellant has claimed additional cost of Rs. 20,74,880/-. However, the assessee has failed to prove the additional cost by supporting evidences. In the remand report, the AO has stated that the assessee has failed to prove the additional cost by any bills/invoices and he has not submitted any documentary evidences to prove that same were capital expenditure and not of revenue in nature. The AO has also stated that the assessee has not submitted copy of bank statement wherein debit entries of above payment were reflected. In support of this additional cost, the appellant has submitted a certificate issued by the society. In the rejoinder the appellant had submitted that the certificate itself shows that the expenses were incurred with reference to the said plot and the narration of the certificate against each payment itself shows that the expenses were incurred with reference to the said plot. A perusal of the said certificate shows that the contention of the appellant is factually incorrect as the certificate only contains the date, amount, cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned drawn by HDFC Bank, Navrangpura Branch. Date Amount (Rs.) Cheque Number Narration 24m Mar 2007 4, 02,200.00 000212 Transfer Fee 25lh Apr 2007 1, 00,000.00 000363 Drainage Work 29th Oct 2007 1, 00,000.00 000517 Redevelopment work 31th Dec 2007 1, 00,000.00 000707 25th Feb 2011 4, 59.680.00 002067 Deposit 25th Feb 2011 14,000.00 002067 Water connection 25th Feb 2011 54,000.00 002067 Maintenance 07"' Mar 2011 8,25,000.00 002084 For land 6.2 None of the authorities below, has pointed out any defect in the receipt as discussed above. In case of any doubt on the genuineness of the above receipt/the expenditure incurred by the assessee, the authorities below should have taken the confirmation from the society. But the Revenue has not exercised its power granted under the statute. The assessee incurred all the payments above/expenditures through banking channel. Therefore we hold that the authorities below have made the disallowance of the claim of the assessee without bringing any cogent reason. Therefore, we reverse the order of the authorities below and direct the AO delete the addition made by him. Hence th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the mandatory condition for allowing bad debt is not fulfilled by the assessee . The AO is of the view that the assessee has simply introduced the clients to Angel Group and the parties carried on the trading activity through Angel Group for which the assessee is not a party at all and no income or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of debt is written off or of an earlier year. The AO has therefore rejected the claim of bad debt and disallowed an amount of Rs. 54,87,027/-. 4.4. During the appellate proceedings, the appellant has submitted that it was \ appellant's responsibility to see that the clients whose transactions were done by the appellant with Angel Group pay the dues and failing them the same was to be borne by the appellant. It is further submitted that the appellant has earned sizable brokerage from the various clients whose transactions as above were carried out by the appellant with Angel Group and which is taxed by the AO. The appellant has relied upon following decisions:- 1. CIT vs. Bonanza Polrtfolio Ltd. 320ITR 178 (Delhi) 2. CIT vs. Shreyas S. Morakhia 342 ITR 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. The issue in the instant case relates to the bad debts claimed by the assessee on account of the amount recovered by the angel group from the assessee. Indeed, the amount recovered by the angel group from the assessee was not offered by him as income in his books of accounts. Therefore the condition as specified under section 36(2) of the Act has not been satisfied. Therefore, the amount of deduction as bad debts cannot be claimed. 11.1 However, we note that the courts have allowed such claim of the assessee as bad debts as the same was incurred in the course of the business carried on by him. Therefore in our considered view, such loss is a business loss and the same is eligible for deduction as bad debts. 11.2 In holding so, we find support and guidance from the judgment of Hon'ble Delhi High Court in the case of CIT versus Bonanza Portfolio Ltd. reported in 320 ITR 178 wherein it was held as under: "Held that the money receivable from the client had to be treated as 'debt' and since it became bad, it was rightly considered as 'bad debt' and claimed as such by the assessee in the books of account. Since this bad debt occurred in the year in question, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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