TaxTMI 
TaxTMI 
2021 (1) TMI 49
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....m of Rs. 1,08,50,000 as bad debts. 2. Without prejudice and in the alternative, the LD. CIT(A) erred in not allowing an amount of Rs. 1,08,50,000/- as business expenditure u/s 28 or 37(1) of the Act. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in disallowing the loss of Rs. 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. ....
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....having the same conduct of the business operations and at the same place. Further, the authorized representative and company secretary are also same. The assessee has treated the loan as bad and not recoverable, but the barrower company 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 d....
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.... to be allowed and supported with judicial decisions and paper book. On the additional ground of appeal the Ld. AR submitted that the income of the assessee to be treated as an income from other sources is bad in law, irrespective 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 ....
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....rther 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) and restore the entire disputed to the file o....