TMI Blog2021 (1) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... made in respect of recovery of loan and further more in the case of sister concern, it will be easy for the assessee considering the advance given in the normal course of trade and place of business is the same. Further, no material was filed before the A.O. or before us to establish that the assessee has made efforts for recovery of debt or correspondence with barrower for non-payment. Even in the assessment order the A.O has only referred to the fact that it is a related concern but could not establish that the verification and enquiry has been conducted. We considering the nature of transactions with the related concern and the assessee could not establish the efforts under taken for the recovery. We set aside the order of the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. CIT(A) erred in disallowing the loss of ₹ 14,77,960/- as allowed by the A.O, without giving any opportunity to the appellant. 4. The appellant craves leave to add, to alter or amend the grounds of appeal on or before the hearing of this appeal. 2. At the time of hearing, the assessee has filed an additional ground of appeal along with an application for admission. The Ld.DR has no serious objection, accordingly the additional ground of appeal is admitted as under: 1. The Ld. CIT(A) has erred in law and in facts in treating the interest income of the appellant under the head, income from other sources as against income from business offered by the appellant. 2. The Ld. CIT(A) has erred in law and in facts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany has disclosed this loan liability in its balance sheet as on 31.03.2004 and also as on 31.03.2005.The observations of the A.O are that, the assessee does not comply the conditions required for claim of deduction u/s 36(1)(vii) r.w.s 36(2) of the Act. The A.O found that the assessee is engaged in the business of money lending and there is no license granted to the assessee for carryout such activity. The A.O. is of the opinion that the loss on account of bad debts on advances provided to the sister concerns does not satisfy the provisions of law and also the assessee could not substantiate with any information on recovery of loan and has disallowed the claim of bad debts and assessed the total income of Rs.(- )1,77,960/-and passed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive of the fact that the assessee is engaged in the business of money lending and emphasized that in the earlier years the A.O has accepted and treated as income from business and prayed for allowing the appeal. 6. Contra, Ld. DR supported the orders of the CIT(A). 7. We heard the rival submissions and perused the material on record. The first disputed issue as envisaged by the Ld. AR with respect of claim of bad debts in respect of amount advanced to M/s Indessa Infotech Pvt Ltd., the contention of the Ld. AR that the loan has become bad, therefore the assessee has claimed deduction of bad debts u/s 36(1)(vii) r.w.s 36(2) of the Act. We find the observations of the A.O that the assessee has given loans to its sister concerns M/s Inde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us to establish that the assessee has made efforts for recovery of debt or correspondence with barrower for non-payment. Even in the assessment order the A.O has only referred to the fact that it is a related concern but could not establish that the verification and enquiry has been conducted. We considering the nature of transactions with the related concern and the assessee could not establish the efforts under taken for the recovery. We set aside the order of the CIT(A) and restore the entire disputed to the file of the A.O for the limited purpose to verify the claim made by the assessee as per ratio of decision of Hon ble Supreme Court in the case of TRF Ltd Vs CIT (supra) and the efforts made by the assessee in recovery of the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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