TMI Blog2021 (11) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... money-lending which is carried on by the assessee. On the other hand, the AO had also not examined the issue in light of provisions of Section 36(1)(vii) r.w.s. 36(2) because the AO has made adhoc disallowance of 50% debt The issue needs to go back to the file of the AO to decide the issue afresh in accordance with provisions of Section 36(1)(vii) r.w.s 36(2) of the Act. We further direct the AO while deciding the issue, he must take into account the ratio laid down in the case of T.R.F. Limited [ 2010 (2) TMI 211 - SUPREME COURT] where it has been clearly held that once debt has been written off in books of accounts as irrecoverable, then the assessee need not to prove that said debt become really bad debts. Accordingly, we set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c The appellant submits that the objections placed as against the reopening of the assessment were not disposed off with a proper speaking order within a reasonable time as per the mandate of the Hon ble Supreme court in GKN Driveshafts (India) Ltd. v. ITO, reported in 259 ITR 19 (SC), the Assessing Officer is required to dispose any objections placed to the reopening of an assessment under Section 147 of the Act with a speaking order. In the instant case, the Assessing Officer has mechanically dismissed the objections raised, and, as such, the proceedings initiated under Section 147 is invalid. D. The Hon CIT Appeals failed to appreciate the fact the appellant submits that the Assessing Officer infact and kept the matter pending for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Supreme Court decision in TRF ltd In CA No S.5292 to 5294 of 2003 vide judgement dated 09.02.2010 and the Board Circular No.12/2016 dated 30th May 2016 supports the Appellant s contention. D. The Appellant craves leave to add, alter, delete and modify all or any of the grounds of appeal, at any time during the course of this appeal and requests an opportunity of being heard before orders are passed. 3. Brief facts of the case are that the assessee is consultant to a leading television network, carrying on the business of money lending as a sole proprietor and he is also a partner in M/s. Anand Cine Service carrying on the business of equipment hiring. The assessee has filed his return of income for assessment years 2007-08 and 2008- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gesting escapement of income and also there is a failure on the part of the assessee to disclose fully and truly all necessary material facts required for assessment. The assessee had also challenged addition made towards 50% disallowance of bad debts on the ground that once debts are written off in the books of accounts, then there is no necessity to prove to the AO that debts become really bad. The CIT(A) after considering relevant facts and also taken note of various reasons given by the AO, rejected legal ground taken by the assessee challenging reopening of assessment. The CIT(A) had also confirmed additions made by the AO towards disallowance of 50% bad debts by following certain judicial precedents including decision of Hon ble Madra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 397. 7. The ld.DR on the other hand strongly supporting order of the CIT(A) submitted that the assessee has failed to file any evidence to prove that deduction claimed towards bad debts thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year, or represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee. The ld.DR further submitted that the assessee also failed to file any evidence to prove that the debts really become bad debts and has also made sufficient efforts to recover the debt. In the absence of any evidence, the AO has rightl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of money lending either by furnishing necessary license obtained from competent authority or generating income from such business. Further, the assessee claimed that he has charged interest on loans and offered to tax such interest as and when he receives interest, but on perusal of financial statements, no interest has been offered to tax from loans and advances. Therefore, we are of the considered view that the fact whether the assessee is in money lending business or not and further unsecured loans given to various persons and are become bad debt is lent in the ordinary course of business or not is not forthcoming from the records. This fact needs verification. Further, once a particular debt becomes irrecoverable or bad debts then sai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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