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2012 (10) TMI 570 - ITAT CHENNAIDisallowance of claim of bad debts – Revenue or personal expense - Commission for arranging the loan – for Purchase of land – Proposal did not materialize – AO argued that claim was neither revenue in nature nor was it a loan or debt incurred in respect of the business - Held that:- Recording of such transaction by itself would not render it an allowable expense either as bad debt or as a business loss. If it was only a fee paid for arranging loan for the assessee’s business, the amount need not have been shown as debt due with name of commission agent. Partner has suffered a personal loss, and trying to charge such loss in the accounts of the assessee by claiming it as bad debt. Issue decides in favour of revenue Addition on account of unexplained cash - Cash introduced by one of the partner in a firm – AO basis for addition was that the partner could not give any explanation – Held that:- As relevant transaction are available in books of introducing partners. Capital introduced was by the partner and hence it would not come within the definition of “cash credit” automatically. If the partner was unable to give explanation which was satisfactory, an addition no doubt could have been made in the hands of said partner. Thus, in our opinion, addition made in the hands of the assessee cannot be justified. Issue decides in favour of assessee
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