AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1100
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.... the normal running of business and while sustaining the instant disallowance, the learned CIT (A) has proceeded on irrelevant and extraneous considerations, and as such the disallowance so sustained is wholly untenable either on facts or in law. 1.1 That the adverse findings recorded by the learned AO and Commissioner of Income Tax (Appeals) are perverse and have been recorded with preconceived notions and without considering the submissions/evidences/material produced on record and also without providing fair and proper opportunity of being heard, hence such findings are vitiated and deserves to be deleted. 1.2 That while sustaining the said disallowance the learned CIT (A) has failed to appreciate the fact that the assessee company has never claimed the said expenditures under section 36(2) of the Act, rather the said expenditures are allowable as business loss under section 28 or 37 of the Act, as the same have been incurred during the normal carrying on of business and the genuineness of the same being not disputed, the same should have been allowed, as such 2 That the learned Commissioner of Income Tax (Appeals) has further erred in sustaining a disallowance of Rs. 5....
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....iness and the genuineness of the same being not disputed, the same should have been allowed, as such 2 That the learned Commissioner of Income Tax (Appeals) has further erred in sustaining a disallowance of Rs. 1, 57, 255/- on account of advance to supplier written off, which disallowance is based on irrelevant and extraneous considerations, and as such the disallowance so sustained is wholly untenable either on facts or in law. 2.1 That while sustaining the said disallowance the learned CIT (A) has failed to appreciate the fact that the assessee company has never claimed the said expenditures under section 36(2) of the Act, rather the said expenditures are allowable as business loss under section 28 or 37 of the Act, as the same have been incurred during the normal carrying on of business and the genuineness of the same being not disputed, the same should have been allowed, as such. 2.2 That the adverse findings recorded by the learned AO and Commissioner of Income Tax (Appeals) are perverse and have been recorded with preconceived notions and without considering the submissions/evidences/material produced on record and also without providing fair and proper opportunity o....
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....bts. Assessing Officer disallowed it as it did not satisfy the conditions of section 36 (2) of the Act. Before Ld CIT (A) assessee took the plea that it would be business loss which has been accepted by Ld. CIT (A) It is now the case of assessee that such losses are allowable as bad debts. Ld. DR has argued that even the loss is not allowable. According to us any loss is allowable to assessee under section 28 itself while computing business income of assessee if: * such loss has been arisen during the course of the business of assessee; * and it should have occurred during the year under concern 4.8 In the present case the write off of loss has not arisen during the course of business of assessee as money lending is not the activity that is carried on by assessee and it has never been the claim of assessee nor it has been proved before the authorities below. There has been no evidence that is placed on record to prove that the loss has occurred during the year. Therefore the claim of loss by assessee does not hold good on both these counts. The reasons given by Ld. CIT (A) to allow the claim as business loss are irrelevant and is without considering the provisions of the Act.....
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.... the Act. Therefore, I do not find any reason to interfere in the finding of the AO, the additions made by the AO is confirmed. Ground of appeal no.4 is dismissed." 5. Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds in both the AYs relate to the said disallowances. 6. The Ld. AR made common submission in respect of the disallowance of Rs. 57,19,974/- in both the AYs. It was submitted that the assessee never claimed the said expenditures under section 36(2) of the Act. He further submitted that the said expenditures are allowable as business expenditure/losses under section 28 or 37 of the Act as the same have been incurred during the normal carrying on of business. According to him, the genuineness of the expenditures have not been disputed and therefore, the same should have been allowed. 6.1 The Ld. AR pointed out that against the order of the Tribunal in the assessee's case for AY 2012-13, appeal has been filed before the Hon'ble Delhi High Court and a question of law has been framed on the issue for consideration vide order dated 15.05.2019 in ITA No. 1123/2018. 6.2 The Ld. AR referred to the judgment of the Hon'ble Supreme Court in PCIT vs.....
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....hi High Court. In AY 2013-14 also the appeal of the assessee was allowed by the Ld. CIT(A) holding that the impugned sum was allowable as business loss under section 28 of the Act. The appeal there against filed by the Revenue has been dismissed by the Tribunal in ITA No. 4321/Del/2017 dated 31.10.2019 on account of low tax effect. 10. It is observed that the assessee vide its letter dated 05.01.2016 (copy at page 82-83 of Paper Book) and 11.09.2017 filed before the Ld. AO during assessment proceedings for AY 2014-15 and 2015-16 respectively had claimed that the chances of recovery of the impugned sum is nil and the same is allowable as an expense under section 37(1) of the Act. The Ld. AO ignored the assessee's claim in both the years. Before the Ld. CIT(A) the assessee submitted that it has written off Rs. 57,19,947/- in each of the two years being 20% of the total loan/advance given to JV Company in its audited financials. It was also asserted that nowhere the assessee has claimed the said amount as bad debt in the profit and loss account. It was submitted that the loss is allowable under section 28(i) r.w. section 36(1)(vii) or 37(1) as a normal business loss. Support was deri....