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TMI Blog2016 (5) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, the assessee replied that Rs. 5,80,000/- was deposited out of cash in hand which was accepted by the Learned AO. For balance sum of Rs. 36,50,036/- , the assessee replied that one of the businesses of assessee firm is money lending and during the course of money lending business, it had advanced monies to the three parties and the said balances were outstanding for more than 10 years. During the assessment year under appeal, after lot of continued efforts from the assessee, the following three parties directly deposited cash into the bank account of the assessee towards repayment of their respective loan dues :- ( Figure in Rs.) M/s Raj Enterprises 5,89,959 M/s Brand Alloys Ltd 22,53,810 Mr.Vinay Baid 8,06,267 36,50,036/- Out of the three parties, the assessee was able to produce confirmation letter from Mr.Vinay Baid together with his PAN details. With regard to the other two parties, the assessee provided the last known address available with the assessee to the Learned AO for his verification. The Learned AO could not trace those two parties. The assessee also produced the ledger accounts of all those parties commencing from Asst Year 2003-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to write off the bad debt and hence deduction for the same should be given as genuine business loss. Thereafter ,this business loss would go to set off the other sources income and in either way, it would only be revenue neutral. The Learned CIT(A) however upheld the view of the Learned AO. Aggrieved, the assessee is in appeal before us on the following grounds:- 1) That the Learned C.I.T. appeal erred in confirming the addition of Rs. 36,50,036/- being the sums received back from M/s. Brand Alloys amounting to Rs. 22,53,810/-, M/s. Raj Enterprises Rs. 5,89,989/= and Vinay Kumar Baid Rs. 80,62,627/- which is due from them to the appellant since last more than Ten years and reflected as Sundry Debtors ( Loans & Advances) in the Balance Sheet. The aforesaid additions is unwarranted, bad in law and not sustainable. 2) That the Income-Tax Officer erred in invoking provisions of Sec.68 of I.T. Act and the Learned CIT(Appeals) erred in agreeing the same, which is not applicable in the Appellants case and hence the addition of Rs. 36,50,036/- is bad in law. 3) That confirmation letter along with PAN No. and source of advance etc had been furnished during the Asst. year 1997-98, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 73 ; (v) copy of tax audit report together with audited accounts for Asst Year 1999-2000 vide pages 74 to 105 ; (vi) copy of IT return acknowledgement and assessment order us 143(3) of the Act for the Asst Year 1998-99 vide pages 106 to 113 and (vii) copy of audited balance sheet as on 31.3.1998 together with tax audit report vide pages 114 to 140 . 6.1. We find that the addition has been made the Learned AO on the ground that the assessee could not obtain the confirmation from M/s Raj Enterprises and M/s Brand Alloys Ltd. It is not in dispute that the assessee had indeed furnished confirmation from Mr.Vinay Kumar Baid together with his PAN details which fact is also mentioned in the assessment order. The assessee had claimed that the source of cash deposits are nothing but realization of loan dues from the three parties in cash which were deposited into the bank account of the assessee. It is not in dispute that the assessee had indeed requested the Learned AO to issue summons to M/s Raj Enterprises and M/s Brand Alloys Ltd to make verification of the subject mentioned receipts. But the said summons could not be served on the parties at the address given by the assessee to Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s indeed engaged in money lending business also. We also find that the assessee had duly shown the amounts receivable from the aforesaid three parties (i.e Raj Enterprsies, Brand Alloys Ltd and Vinay Kumar Baid) as loans and advances in the balance sheet as on 31.3.2008 (immediately preceding asst year) with the balances of Rs. 36,50,036/- in total of these three parties. This goes to prove that the assessee had continued its money lending business. During the asst year under appeal, the balances from these three parties are shown as nil in view of recoveries made by the assessee from them, according to assessee , which fact is also evident from the balance sheet as on 31.3.2009 filed in the paper book. However, the realization of monies from these loan parties have been disbelieved by the Learned AO and we have already given our finding in that regard hereinabove in favour of the revenue. But one more fact cannot be swept under the carpet that the assessee had brought the loan balances from these three parties to Nil as on 31.3.2009 in its books of accounts. It is not in dispute that the assessee was indeed carrying on money lending business in the past and had derived interest in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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