9911796707
TMI Blog2023 (1) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has filed an application seeking condonation of delay supported by an affidavit sworn by the assessee. In the application, it is submitted that the assessee is a senior citizen with limited education. Further, since past some years and particularly after the Covid pandemic period his business has also stopped. It is further submitted that the Chartered Accountant who was handling his Income Tax matters including the filing of return expired on 26/04/2016, and thereafter there is no regular Chartered Accountant of the assessee and even his return of income is filed by different persons. It is also submitted that after the death of his regular Chartered Accountant, the appeal before the learned CIT(A) was represented based on partia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter. It is also the claim of the assessee that the impugned order was not received by him and only upon intimation regarding the penalty order under section 271(1)(c) of the Act, he was informed by his Chartered Accountant that quantum appeal has been dismissed by the learned CIT(A), against which further appeal needs to be pursued. It is further evident from the medical report filed along with the condonation application that the assessee is a cardiac patient and had undergone treatment in the year 2019. The reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon'ble Supreme Court in the case of Collector Land Acquisition, Anantnag Vs. MST Katiji and others: 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer ["the AO" for short] in disallowing an amount of Rs.6.82,855/- claimed by the Assessee as bad debts/ business loss. 3.1 While doing so, the Ld. CIT(A) failed to appreciate that: (a) The said amounts were rightly claimed as bad debts/business loss by the Assessee; (b) The disallowance by the Ld. AO of the amount of Rs.4,00,000/- claimed as bad debts/business loss is not in accordance with law and in any case the same was recovered in the next year and was offered to tax in that year which fact is undisputed; (c) Disallowing the very same amount of Rs. 4,00,000/- amounted to double taxation which is impermissible under the Act. (d) As far as the amount of Rs.2,82,855/- is concerned the same has been disallowed on frivolous gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k as bad debts. The assessee further submitted that the said loan was recovered in the next year and was offered as income. The Assessing Officer ('AO') vide order dated 06/02/2015 passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that the loan given is not in the nature of capital receipt or loss and therefore not in the nature of a revenue expenditure or income. Thus, the expenses cannot be routed through the profit and loss account. The AO further held that since the conditions of section 36(2) of the Act are not satisfied, therefore, the claim of bad debts is not allowable. Accordingly, the AO disallowed the claim of bad debt of Rs.4 lakh and added the same to the total income of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly, we direct the AO to delete the addition of Rs.4 lakh. As a result, grounds no.3 (b) and 3(c) raised in assessee's appeal are allowed. 11. The issue arising in ground no. 3.1(d), raised in assessee's appeal, is pertaining to the addition of Rs.2,82,855 on account of bad debts claimed by the assessee. 12. The facts of the case as emanating from the record are: During the assessment proceedings, it was observed that the assessee has shown bad debts of Rs.2,82,855. The assessee was asked to show cause as to why the bad debts written off should not be disallowed and added back to the total income of the assessee. In response thereto, the assessee submitted that during the year the assessee had written off the amount due from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons for coming to the aforesaid conclusion. Further, there is no basis whatsoever provided in the order dismissing the appeal filed by the assessee. In this regard, it is relevant to note the following observations of the Hon'ble jurisdictional High Court in Shivsagar Veg. Restaurant vs ACIT; [2009] 317 ITR 433 (Bombay): "10. The basic rule of natural justice requires recording of reasons in support of the order. The order has to be self-explanatory and should not keep the higher court guessing for reasons. Reasons provide live link between conclusion and evidence that vital link is a safe guard against arbitrariness, passion and prejudice. Reason is a manifestation of mind of adjudicator. It is a tool for judging the validity of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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