2022 (5) TMI 1332

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....lowance of write off of property advances amounting to Rs. 7.86 crores. 2. The facts relating to the issue are stated in brief. The assessee is engaged in the business of real estate development. The A.O. noticed that the assessee has written off Rs. 9,81,13,042/- as bad debts. The assessee submitted that the amount so written off represents 'property advances' made to various parties during the normal course of business, which became irrecoverable. The A.O. noticed that the assessee has not entered into any MOU/Agreement with the parties to whom advances have been paid. In the absence of the same, the A.O. held that the assessee could not establish beyond doubt that the advances made are indeed land advances and not any other pa....

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....on made by the A.O. Aggrieved, the assessee has filed this appeal before us. 4. The Ld. A.R. submitted that the assessee is engaged in the real estate development business and hence, as part of its business activities, it used to give advances for purchase of lands for the purpose of real estate development. The Ld. A.R. submitted that the assessee has written off these advances, when it came to the conclusion that they are not recoverable. The Ld. A.R. submitted that the assessee has written off Rs. 9.81 crores during the year under consideration as bad debts. The A.O. has, however, allowed the claim to the extent of Rs. 1.94 crores and disallowed the balance amount of Rs. 7.87 crores only for the reason that they are larger amounts. Wh....

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.... 6. The Ld. A.R. further submitted that the Ld. CIT(A) has confirmed the disallowance on the reasoning that the assessee has not shown any proof to substantiate that the amount became irrecoverable. He submitted that the reasoning given by the AO while allowing claim of Rs. 1.94 crores equally applies to other advances written off by the assessee. 7. The Ld. D.R., on the contrary, supported the order passed by Ld. CIT(A). 8. We heard the rival contentions and perused the record. We notice that the A.O. has disallowed part of claim of the assessee only for the reason that the quantum of advance given is on higher side, while the A.O. has himself allowed the claim in respect of smaller advances observing that they are incidental in th....