TMI Blog2022 (12) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... ision u/s.263 of the Act on the same issue which is examined by the AO in detail. Hence, we find that the revision order passed by PCIT is bad in law and hence, the same is quashed. Appeal filed by the assessee is allowed. - ITA No.: 619/CHNY/2021 - - - Dated:- 23-12-2022 - Shri Mahavir Singh, Vice President And Shri Manoj Kumar Aggarwal, Accountant Member For the Appellant : Shri J. Saravanan, Advocate For the Respondent : Shri S. Senthil Kumaran, CIT ORDER PER MAHAVIR SINGH, VP: This appeal by the assessee is arising out of the revision order passed by the Principal Commissioner of Income Tax, Coimbatore u/s.263 of the Income Tax Act, 1961, (hereinafter the Act ) vide order C.No.120/41/PCIT-1/2019-20 dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative and exhaustive and hence, need not be reproduced. 4. Brief facts are that the AO framed original assessment u/s.143(3) for the relevant assessment year 2015-16 vide order dated 13.12.2017. Subsequently, on examination of assessment records, the PCIT noticed on verification of total income statement that the business loss of Rs.1,19,71,418/- was set off against income earned under the head long term capital gain of Rs.1,22,11,844/-. According to PCIT, the AO failed to verify the excess allowance of bad debts which works out to Rs.1,08,38,418/- (Rs.1,31,20,648 Rs.22,82,230/- the income declared) required to be withdrawn. According to AO, the assessment order passed without making enquiry or verification for the assessment year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The ld.counsel for the assessee drew our attention to para 2 3 of the assessment order dated 13.12.2017 passed u/s.143(3) of the Act, which reads as under:- 2. The case was selected for limited scrutiny to verify Large business loss set off against other heads of income. Notice u/s 143(2) dated 01/08/2016 was issued and served on the assessee on 20/08/2016. In response to the notice, Shri V. Ramanath FCA and Shri R. Shivapranesh of K.S. Palanisamy and Co., Chartered accountants and duly Authorised Representative, appeared and filed the details called for. 3. It is seen that the assessee has claimed huge bad debts during the year in course of her money lending business and set it off against income from capital gains. In this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f carrying out money lending as per Money Lending Act, 1957. As per Section 3 of Tamil Nadu Money Lending Act, 1957, a person requires a license for carrying out the said business and Section 9 of the said Act stipulates about the various records to be maintained for that business. It is also notable that no Such money lending activity was noticed in the earlier ROI of the assessee. Further, the assessee has not filed ROI from the AY2015-16 onwards. iii. The assessee has not proved the genuineness of the loan by way of providing necessary documentary evidences for the lending of loans (date of lending, mode of lending, acknowledgement for receipt and the details of Security received against said loan) iv. Even if it is presumed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sures. The same can be proved by sufficient evidences like a) the recovery action initiated against the receipts of loans during the year b) reasons for treating the said loans as bad within 6 months of giving such loans c) FIR / complaint filed against the debtors d) Activity initiated for adjusting the loans recoverable with the security given by the receipts of loan. It is notable that writing off of bad debts is not an empty formality, the assessee cannot convert any live amount into bad debts only on the basis of technical rule of write off. Reliance is placed on the decision of Bangalore ITAT in the case of Embassy ClassiccPvt Ltd vs DCIT (2010-TIOL-591-ITAT-BANG) vii. It is also noticed that, in the Assessment Order it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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