TaxTMI 
TaxTMI 
2022 (10) TMI 982
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.... grounds of appeal: "1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case. 2. The ld.CIT(A) erred in allowing the claim of chit loss even when running chit fund was not assessee's business and the contributions made to the chit fund cannot be treated as revenue expenditure, nor indeed the payment and receipt of any amount to and from the chit fund are the business activity of the assessee. 3. The ld.CIT(A) erred in relying on the decision of the jurisdictional Hon'ble High Court in the case of V.Rajkumar Vs CIT (2006) in TCA No.2601 of 2006 even when facts of the instant case are not similar as the question before the Court in V.Rajkumar Vs CIT (2006) in TCA No.2601 of 2006 was the taxa....
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....nding balance of Rs.3,21,53,296/- was towards sale of goods. 9. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer be restored." 3. The brief facts of the case are that, the assessee is engaged in the business of manufacturing and wholesale trading in iron & steel scraps and finished goods, filed its return of income for the assessment year 2012-13 on 19.09.2012 admitting total income of Rs. 1,52,05,529/-. The case has been selected for scrutiny and the assessment has been completed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") on 27.03.2015 and determined total income of Rs. 5,07,73,4....
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....nd has been used for the purpose of business. The AO had disallowed chit loss on the ground that the subscription to chit is mutuality and any gain on chit fund is exempt from tax and consequently, loss on chit cannot be allowed as deduction. 6. We have heard both parties and considered relevant materials available on record. We find that, the CIT(A) has deleted the addition by following decision of Hon'ble Madras High Court in the case of V. Raj Kumar vs CIT (2006) in TCA No.2601 of 2006, where the Hon'ble High Court clearly held that any profit or loss arising from the chit subscription activity is liable for taxation and consequent loss of chit is a allowable deduction. The finding of facts recorded by the Ld. CIT(A) in light of decisio....