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03-09-2019, Praveen Gupta, Section 37, 36(1)(vii), 68, Tribunal Delhi

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1 week 3 days ago #10693 by amit
Section - 37, 36(1)(vii), 68
Order Date - 03-09-2019
Favouring - Revenue
Court - Tribunal Delhi
Appellant - Praveen Gupta
Respondent - ACIT
Justice - H.S.SIDHU JM & ANADEE NATH MISSHRA AM
Citation - 919Taxpundit23
Appeal No. - ITA No:- 1434/Del/2016
Asstt. Year - 2011-12

Order

PER : ANADEE NATH MISSHRA

[A]. This appeal has been filed by the assessee against the impugned order dated 16.02.2016 passed by Learned Commissioner of Income Tax(Appeals), Meerut [in short “Ld.CIT(A)”] pertaining to 2011-12 assessment year. The assessee has raised following grounds of appeal:-

1. “That each ground of appeal is with out prejudice to each other.

2. That the Ld. CIT was not correct and justified in sustaining the addition of Rs. 50.00,000/- u/s 36 (1) (viii) read with section 37 of the Income Tax Act, 1961 on the basis of facts and circumstances of the case.

3. That the Ld. CIT was not correct and justified in sustaining the addition of Rs. 12,22,400/- on account of earth filing expenses on the basis of facts and circumstances of the case.

4. That the appellant reserved the right to add amends, alter and/or delete any of the grounds of appeal.

5. That on the basis of facts of the case and in view of the circumstances it is prayed that either the additions sustained by the Ld. CIT may please be deleted or the matter may please be restore back to the file of Commissioner of Income Tax (Appeals) in the interest of natural justice.”

. Assessment order dated 27 03 2014 was passed by the AO u/s 143(3) of the Income Tax Act, 1961 [in short “Act”] wherein the total income was assessed at Rs.3,20,49,170/- as per following computation:-

[C]. The assessee filed appeal before the Ld.CIT(A). Vide aforesaid impugned order dated 16.02.2016 of Ld.CIT(A), the assessee was allowed substantial relief. However, Ld.CIT(A) sustained the aforesaid addition of Rs.50,00,000/- being disallowance out of bad debt written off. Further, ld.CIT(A) sustained the disallowance of Rs.12,22,400/- out of disallowance of Rs.12,72,400/- by the AO on account of disallowance of earth filing expenses. The present appeal before us has been filed by the assessee against the aforesaid disallowances sustained by Ld.CIT(A). In the course of the appeal in the appellate proceedings in Income Tax Appellate Tribunal (in short “ITAT”), the following particulars were filed from the assessee’s side:-

[C.1]. At the time of hearing before us, Ld.AR of the assessee relied on the aforesaid particulars filed from assessee’s side in ITAT. Ld.AR for the assessee drew our particular attention to paper cutting dated 04.03.2015 in support of aforesaid second ground of appeal and contended that the aforesaid loss of Rs.50,00,000/- is allowable u/s 36(1)(viii) of the Act as bad debt written off; and also alternatively u/s 37 of the Act as business loss. Ld.AR for the assessee placed strong reliance on the case of Minda (HUF) vs JCIT [2006] 101 ITD 191 (Del.).

[C.2]. In support of all the grounds of appeal, Ld.AR for the assessee also placed strong reliance on the submissions made before Ld. CIT(A) in respect of the aforesaid disallowance of Rs.50,00,000/- and Rs.12,22,400/-. The relevant discussion is at the following portion of the aforesaid impugned order dated 16.02.2016 of Ld.CIT(A) reproduced hereunder:-

“GROUND NO. 1 Addition of Rs. 50,00,000.00

“That as already submitted above that the assessee was engaged in the business of trading of immovable properties and this amount was given for the purchase of land of Khasra no. 155 at Begum Pur (Malvinas’ Nagar, Delhi) to Mr. Arshad Ahamad is not denied by the assessing officer arid therefore it is-established beyond doubt That the amount was advanced only for business purposes and therefore the provisions of section 36 (1) (vii) of the Income Tax Act, is clearly applicable.

That the condition precedent to section 36 (1) (vii) is that the assessee has actually written off the amount as Bad Debts in his books of accounts or not and since the assessee has actually written off the amount in his books of accounts during the year under consideration as bad debt, the amount is allowable u/s 36 (1) (vii) of The I Tax Act, 1961.

That here it is also submitted that Mr. Arshad Ahamad is a cheater and to further prove that the advance was for

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