TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 274
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....nditure assessee. It is submitted that it be so held now and the deduction as claimed be allowed. 2,1 The learned CIT(A) erred on facts by not appreciating that judicial precedents relied upon by the learned AO support the case of appellant rather than that of the learned AO. Also, the learned CIT(A) erred in not considering the Apex Court judgement in case of Sitalpur Sugar Works Ltd. v. CIT (1963) 49 ITR 160. It is submitted that it be so held now and the deduction as claimed be allowed. 3. The learned CIT(A) has erred in disallowing the amount of bad debts written off of Rs.69,33,446/- by holding that the appellant had not written off the same in its books of accounts. It is submitted that it be so held now and the deduction as claimed be allowed. 3.1 It is submitted that such amounts are already written off against the account of debtors and hence the same falls in the ratio of Supreme Court decision in case of TRF Limited vs. CIT (2010) 323 ITR 397 and the same should be allowed accordingly. It is submitted that it be so held now and the deduction as claimed be allowed. 4. The learned CIT(A) erred in law and on facts by not allowing the long term capital loss of Rs.1,5....
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...., the Ld. AR submitted that during the year under consideration the assessee had written off amount of Rs.1,36,72,000/- being amount of advances given to subsidiary company namely Gujarat Textronic Limited (GTL). The amount in GTL was written of when GTL became defunct and no amount was recovered from its liquidator. The main purpose for the assessee to invest in the equity shares of GTL was to control the operations of GTL and to oversee that the manufacturing cost of the yarn clearer remained below its import cost to be cost effect for the company. During the assessment proceedings the assessee has explained the background of the assessee to invest in GTL and the purpose of providing advances. The assessee also explained the reasons for GTL into loss making and became defunct. Thus, the advances at no point of time can be recovered from the defunct company. Hence the assessee has treated the same as bad debt as well a business loss/loss incidental to business. The Ld. AR submitted that the advances are for working capital and purchase materials, thus it was for the purpose of business and, therefore, the said amount should be allowed as business loss incidental to business. The L....
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....ing the course of assessment proceedings. The individual amount in most of the cases were less than Rs.1 lakh and despite following the same, the debtors never responded due to the fact that the debtors consisted of large number of textile mills which had either closed down or changed ownership or had shifted operations. Since the assessee could not recover its dues, the same was written off as bad debts. 10. Ld. DR relied upon the Assessment Order and the order of the CIT(A). 11. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the only contention of the assessee is that the said debts were outstanding for last more than six years but the assessee has not been able to show as to any correspondence made with the parties for recovering the said amount. There was no efforts made by the assessee to recover the said amount and simplicitor saying that the amount was less than Rs.1 lakh cannot be held as bad debt. In the common parlance of business each and every rupee matters and the businessman always try to recover even if it is not filing any legal action as such. But here intention of recovering the said debts w....
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....n to make it applicable in all cases of extinguishment of such rights, whether as a result of some receipt or nil receipt, so as to treat the subjects without discrimination. Where there does not appear to be ground for such different treatment the Legislature cannot be presumed to have made deeming provision to bring about such anomalous result. The Hon'ble Gujarat High Court further observed that the thrust of the provisions of section 46(2) is that though there is no transfer of the asset on its distribution by the company on its liquidation and such distribution cannot be computed under the head "Capital gains", the same even has to be computed under that 'head, when it comes to assessing the share-holder. A shareholder who has incurred total loss in a transaction of sale of shares would be entitled to claim set off or carry forward, as may be, in respect of capital loss suffered, by virtue of section 45 read with sections 48, 71 and 74. There is, therefore, no reason why a shareholder who in distribution of assets has not received any deemed consideration in satisfaction of his rights and interests in the holding and has thereby suffered a total loss, cannot claim the bene....
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....efit of carry forward of business loss beyond 8 years following the same order of the BIFR. In fact, the order of the BIFR overrides the provisions of Income Tax Act as per the provisions of Section 32(1) of SICA, 1985. Hence, concessions granted by such order prevails over Income Tax Act, 1961. 16. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 17. We have heard both the parties and perused all the relevant material available on record. The CIT(A) has given a categorical finding that the order of BIFR was passed on 16.08.2005 and return of income was filed by the assessee on 29.10.2007 after the order of BIFR. The assessee has disclosed LTCG in the return of income at Rs.13,94,50,634/- which after set of with business loss of the current year and brought forward has been reduced to nil. The CIT(A) further observed that undisputedly the assessee has not filed any revised return of income under Section 139(5) of the Act for rectification of any errors or omissions. It may be noted that the letter filed for claiming LTCG clearly set out the said fact which was totally ignored by the Assessing Officer as well as the CIT(A). Thus, the observations of the CIT....