9911796707
TMI Blog2016 (8) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... from capital asset to stock in trade. In this situation, we decline to accept and approve the conclusion of the AO to treat the income from sale of said property as business income. Per contra, we are of the considered opinion that the finding and conclusion of the ld. CIT(A) in the impugned first appellate order are quite justified, correct and sustainable and we are unable to see any perversity, ambiguity or any other valid reason to interfere with the same and thus we uphold and confirm the same. Consequently ground of the Revenue being devoid of merits is dismissed. Transaction of sale of shares - Held that:- Transaction of sale of shares had actually taken place with Shri Lalit Jain and he actually paid consideration of ₹ 79 lakhs through two account payee cheques. It is also very clear that after purchase of these shares, that the shares were actually transferred in the name of the buyer Shri Lalit Jain on 29.3.2009 and also that the shares were physically received by the buyer immediately after such sale and that reason to make investments including distinctive number of shares had been admitted by the buyer Shri Lalit Jain in his statement. On the basis of foreg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r And Shri L. P. Sahu, Accountant Member Appellant by : Shri Rajesh Kumar Bhoot, CIT- DR Respondent by : Shri C.S. Aggarwal, Sr. Adv Shri Ravi Mall, Adv Shri Brijesh Luthra, FCA ORDER Per Chandra Mohan Garg, Judicial Member This appeal filed by the Revenue is directed against the order of the CIT(A)-IX, New Delhi, dated 30/09/2013 for A.Y 2009-10. 2. The Revenue has raised the following grounds of appeal: 1. Whether on the facts and circumstances of the case in law, the Ld. CIT(A) has erred in holding that the income earned on sale of property is taxable under the head income from Capital Gains and not as Business Income completely ignoring the intention of the assessee which was not to hold the property as investment as discussed in detail in the assessment order? 2. Whether on the facts and circumstances of the case in law, the Ld. CIT(A) has erred in allowing the claim of Long Term Capital Loss of ₹ 13,10,06,344/- by selling the Shares of ₹ 7.90 cr to a related person at ₹ 79 lakhs by completely ignoring the fact that it was Colourable Transaction to reduce the tax burden of Long Term Capital Gain, claimed in the same as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld as investments. The A.O has noted the difference reasons for revising the return of its income. In any case, there is no dispute on this fact about revision of the return of income and the AO has taken into cognizance the revised return while passing his order and appellant has disputed the facts only on the merits of the issue. 3.2 Aggrieved, the assessee carried the matter before the first appellate authority and appeal of the assessee was allowed on all the three issues as raised by the Revenue in the grounds reproduced hereinabove. 4. Now, the aggrieved Revenue is before the Tribunal in this second appeal challenging the grant of relief to the assessee by the ld. CIT(A). Ground No. 1 5. We have heard the arguments of both the sides and carefully perused the relevant material placed on record before us. The ld. DR has drawn our attention towards assessment order page 6 and submitted that the assessee company had entered into an agreement for development of a multi storey project at the property situated at 27, Curzon Road, New Delhi [hereinafter referred to as the property ]. The ld. DR further pointed out that the assessee tried to develop the property by ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed against the said assessment order dated 29.8.2000, it is clear that the said addition of ₹ 31 crores stand confirmed by the ld. CIT(A). 5.3 The ld. DR took us through page 13 of the assessment order for A.Y 2009-10 at para IV.14 and submitted that after considering all the submissions, documents and evidence, the AO rightly concluded that the real character of the transaction and intention of the assessee company was in purchasing and selling the properties. Therefore, income arising out of the said property has to be assessed as income from business and profession. The ld. DR pointed out that the conclusion recorded by the ld. CIT(A) in this regard at page 20 of the impugned first appellate order are not sustainable. The ld. DR also contended that the ld. CIT(A) entertained the documents at the appellate stage without any legal basis and reason and granted to the assessee on the basis of same which is not a proper approach as required u/r 46A of the Income-tax Rules, 1962. 5.4 The ld. DR also submitted that the assessee acquired 100% rights in the property in the year 1987 and sale agreement was registered in favour of the assessee by the legal heirs of Dr. Rag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble High Court of Delhi in the case of CIT Vs. Central News Agency Pvt. Ltd. Reported at 373 ITR 399 [Del] submitted that the test to determine whether profits from sale are assessable as business income has to be decided on various counts but it is the main parameter that whether the transaction undertaken by the assessee which accrued income to the assessee is adventure in the nature of trade. The ld. DR strongly supported the conclusion of the AO and contended that the ld. CIT(A) granted relief to the assessee by considering the irrelevant facts and circumstances of the case and on the wrong premise and therefore the impugned order on this issue may be set aside by restoring that of the AO. 6. Replying to the above, the ld. Sr. counsel for the assessee submitted that the grounds of the Revenue are not in accordance with the provisions of section 253(2) of the Act as the same has been framed in the form of a question. However, the ld. Sr. Counsel further submitted that the grounds of appeal as per Form No. 36 of the Revenue may be decided as per its letter and spirit. The ld. Sr. Counsel further pointed out that admittedly and undisputedly the property was sold in F.Y. 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office of the assessee. 6.4 The ld. AR further pointed out that the said property was also recognised as fixed assets in the books of account of the assessee and since then the said property was always disclosed under the head fixed assets continuously in all the subsequent years. The ld. AR reiterated its written submissions dated 4.5.2012 made before the first appellate authority and submitted that during the period 1987 till date of sale of subject property during the relevant F.Y, the assessee treated the same as fixed assets and thus entered into a collaboration agreement with certain developers to construct commercial building thereon in lieu of retaining specific area in the constructed/developed building. The ld. Sr. counsel also pointed out that the agreements with various collaborators, as noted by the AO in the assessment order para IV entered into from time to time were never executed and accordingly the same were cancelled because the required terms and condition for execution of said agreements, construction on the said property were not satisfied by the said collaborators. The ld. AR further pointed out that the main object of the assessee company, in entering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so contended that in this judgment, their Lordships held that if the transaction is in ordinary line of assessee s business, there would be hardly any difficulty in concluding that it was trading transaction but where it is not, facts must be assessed to discover whether it was in the nature of trade. The ld. AR further contended that surplus realised on the sale of property/shares shown as fixed assets/investment would bring either long term capital gain or short term capital gain. He also contended that such an investment, though motivated possibility of enhancing value does not render investment a transaction in the nature of trade or adventure. The ld. AR also placed reliance on the decision of the Hon'ble Supreme Court in the case of Karamchand Thapar Vs. CIT reported at 82 ITR 899 [SC] and submitted that the manner of disclosure in the balance sheet though not conclusive but it is very relevant circumstances for determining that whether the said property was kept as stock in trade or as in investment/fixed asset in the books of account of the assessee. 6.7 The ld. AR further drew our attention towards pages 355 to 364 of the assessee s paper book II i.e. written subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was converted into freehold property from leasehold. On 28.4.2008, agreements between the assessee and the VERKA was cancelled lifting riders on the title of the assessee and finally on 28.4.2008 the assessee sold the said property for a consideration of ₹ 200 crores which gave birth to the issue of business income as held by the AO, v/s long term capital gain as claimed by the assessee and allowed by the ld. CIT(A) by passing the impugned order. In the next para, the AO also tabulated the cost of acquisition and improvement on the said property and calculated the cumulative value of the property and ₹ 88,71,22,952/- at the end of financial year 2008-09 i.e. at the time of sale of property and the same is not disputed by the assessee. 7.1 Further, the AO noted that it is not a case that the assessee company has not brought a property in one outright purchase. The AO further observed that the assessee had to incur cost of getting the same vacated and settling other issue relating to the property, which have been mentioned in agreements dated 19.5.1980 and supplementary agreements dated 4.6.1980, 20.8.1984 and 21.9.1986. But this analogy is not acceptable as there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see treated the property or investments in its books of account and financial statements during the period when the property/investment was with the assessee. Thus, the said basis of conclusion of the AO is not tenable and we dismiss the same. 7.3 Further, from para IV.14 of assessment order it is also clear that the AO noted correct and relevant proposition applicable to the issue in hand but in subsequent para IV.15 and IV.16 he directly jumped to the conclusion without any adjudication on the explanation and documentary evidence submitted by the assessee, that the income from sale of property is assessable and taxable under the head of Income from business and profession instead of long term capital gain [LTCG] as claimed by the assessee. This is not a right and correct approach for drawing a meaningful and justified sustainable conclusion by a quasi judicial authority. 7.4 At the same time, when we analyse threadbare the impugned first appellate order, then we note that the ld. CIT(A) in paras from 6.7 to 7.1 dealt with the admissibility of additional evidence filed by the assessee u/r 46A of the Income-tax Rules, 1962 [for short, the Rules ]. The said relevant paras sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve not been controverted by the ld. DR and thus we are in agreement with the conclusion of the ld. CIT(A) in this regard that the AO himself in the Wealth tax proceedings held that the said property did not represent stock in trade but was capital asset and thus liable to Wealth tax Act. 8.1 Obviously, capital assets includes investment in fixed assets and thus the stand of the assessee is found correct that the AO in the Wealth Tax proceedings treated the said property as capital asset/investment in fixed assets and not as stock in trade of the assessee. 8.2 Further, next for adjudication is that the ld. CIT(A) vide order dated 9.5.2003 has upheld the conclusion of the AO in assessment order dated 27.9.2002 for the block period from 1.4.1990 to 29.8.2000 u/s 158BC of the Act wherein addition of ₹ 31 crores has been confirmed by the ld. CIT(A) by observing that the amount in question was not really in the nature of advance of but the appellant had derived the right to receive the amount in the course of its business. In this regard, the ld. Sr. Counsel pointed out that the principle of res judicata does not apply to tax proceedings. He further contended that the said or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Verka also deposited a sum of ₹ 29 crores (approx.) with the appellant. The only time such an attempt was made by the appellant was in AY 1988-89 with TATA. Such action was held to be giving rise to' capital gains by the department in the relevant A.Y. Finally nothing was held taxable due to subsequent event of cancellation of the agreement with TATA. It has thus been submitted when the transaction of development in respect of this property in AY 1988-89 was held to be giving rise to capital gains, it can by no stretch of imagination, be treated as business income when the same property is sold 20 years after that event. It has further been submitted that the appellant has always disclosed this asset under the head fixed assets in its audited Balance Sheets. Such Balance Sheets have been a part of the records of the department in the respective years. It has also been submitted that intention of the appellant was crystal clear when in 1983 itself appellant passed resolutions to transfer the advances to fixed assets. Further after the property was purchased in 1987, it was declared fixed assets and since then have been continuously been shown as fixed assets. Regarding c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that - That the flat had been held as a capital asset. The Tribunal had held that the decision to sell the property was necessitated to improve the cash flow of the assessee. The decision of the Commissioner (Appeals) holding that the income from the sale of the 10th floor in the same building in the year 1991-92 was capital gains had been accepted by the Revenue. Therefore the Tribunal was right in holding that the profit earned by the assessee on sale of portion of the property was assessable under the head Capital gains and not under the head Income from business 7.5 Regarding the observation of AO that appellant has got into development agreements with APIL, Verka and TATA, it can be seen that such agreements are based on existing dispute between legal heirs of Dr. Raghunath APIL. It was APIL who assigned its right in favour of Verka wherein appellant had to agree as confirming party. Thus AO s findings that appellant got into these development agreements to carry on the business as a developer or dealer of land are not supported by any fact. The development agreement with TATA goes against the findings of AO as on this agreement the AO held the asset as ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come under which it is taxable which is held to be taxable under the head Capital gains . Accordingly, appellant would be entitled to the benefit of cost inflation index on the cost incurred by it on purchase of the property as per law. In the facts and circumstances of the case and as per law, this ground of appeal is allowed and AO is directed to treat the income as Capital Gain . 8.4 The ld. Sr. Counsel pointed out that regarding clause No. 31 in the Memorandum and Articles of Association of the assessee, such a clause reflects and creates an overall authority in which assessee can engage on its incorporation but the actual business activity carried on has to be decided on actual available facts as per records. In this regard, the conclusion of the ld. CIT(A) as noted in para 7.3 and 7.4 is that there is no dispute that a single transaction can be treated as an adventure in the nature of trade and profit arising therefrom can be taxed as business income and this proposition is well accepted. Further, the ld. CIT(A) noted that the most important factor that the courts have applied to determine the character of transaction is the intention of the tax payer which cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional High Court, their Lordships held that there was no change in the character of the said plot from the year of its allotment till the year flats were constructed thereon and there was no material on record from which it could be said that the assessee ever had the intention to exploit the plot as commercial venture. Their Lordships considering the facts of that case held that merely because six flat had been constructed and out of four were sold to friend it would not show that it was an adventure in the nature of trade . In this decision, their Lordships after considering all the relevant propositions of Hon'ble Supreme Court and Hon'ble High Courts almost settled the issue. The relevant operative para, being words of wisdom and light house in our path of dispensing justice, are being respectfully reproduced below: 10. The principal question to be decided is whether in the facts and circumstances of the case, it may be said that having sold two flats that fell to her share pursuant to the collaboration agreement with the Builder, the Assessee had undertaken an 'adventure' in the nature of trade warranting the receipt to be treated as business income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'adventure in the nature of trade' leading to the resultant receipt as business income in her hand. Further the Assessee offered the long term capital gains arising out from the same flats to tax and filed her return on that basis. 15. Consequently, the question is answered in the negative i.e. in favour of the Assessee and against the Revenue. The impugned order dated 20th March, 2003 of the ITAT and the corresponding orders of the CIT (A) and the AO hereby set aside. The appeal is allowed but in the circumstances with no order as to costs. 9.2 Furthermore, from the recent decision of the Hon'ble Jurisdictional High Court of Delhi, as relied on by the ld. Sr. Counsel dated 21.12.2015 in ITA No. 11/2004 in the case of Rajdulari Bhasin Vs. CIT we also observe that their Lordships after referring to the decision in the case of Shanti Banerjee Vs. DCIT [supra] and other relevant decision on the subject reiterated the said proposition as was rendered in the case of Shanti Banerjee [supra] after considering the facts of that case held that where the construction and sale of the flats do not change the character of the asset and there was no material to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns of income there is no challenge by the AO about the treatment. Merely because the assessee making further payments to the developers to settle the claims on development rights tantamount to business cannot be held a logical and correct a this is not only a relevant fact and surrounding circumstance to determine the main character of the transaction. We may point out that the other assessee has to make some payments to meet the liability of performance of conduct arising out of relevant contracts and agreements pertaining to fixed assets but it does not make the transaction as business transaction or adventure in the nature of trade . It may be a corroborative or surrounding fact being important element to determination of real character of transaction but not a sole basis to conclude against the assessee. 9.4 The AO also observed that the assessee has got into development agreements with the TAT, AIPL and VERKA. We note that the root cause of those agreements was existing dispute between the legal heirs original owner of Dr. Raghunath and the developers and the assessee was under compelling situation to agree with these agreements as confirming party to save and protect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and after sorting out various disputes between the legal heirs of the original owner Dr. Raghunath and various developers i.e. TATA, AIPL VERKA the assessee could be able to get the complete right in the said property on 28.4.2008 when the agreement between VERKA and the assessee was cancelled and 25% rights of VERKA and 40% right of AIPL were acquired by the assessee. It is pertinent to note that the assessee could get the property muted in its name on 20.9.2005. It is also relevant to note that neither the AO nor the ld. DR could demonstrate us that on such point of time the assessee changed the character of the property by putting the same from investment in fixed assets to stock in trade, which could empower the AO to tax the income accrued on sale of such property as business income instead of long term capital gain validly dismissing the claim of the assessee. Thus, we are also in agreement with the conclusion of the ld. CIT(A) that in the absence of any facts indicating that the assessee has converted capital asset into stock in trade during the relevant A.Y [or during some any other earlier financial period] it has to be held that same fact continue to A.Y 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside by restoring that of the AO. However, the ld. DR fairly accepted that the AO did not make any enquiry, from the two allotter companies i.e M/s PFL KFL regarding redemption of said shares as to whether the shares were redeemed and if redeemed, then who was the ultimate beneficiary either the allottee assessee company or the buyer Shri Lalit Jain. The ld. DR also took us through para V-17 of assessment order and contended that admittedly the assessee had given interest free loans to Shri Lalit Jain, his wife Smt Neelam Jain and M/s Tina Organics Pvt. Ltd a company run by Shri Lalit Jain. The ld. DR also pointed out that the assessee shown receipt of ₹ 79 lakhs from Shri Lalit Jain as sale consideration without actually giving him delivery of shares and without transferring the same in the name of buyer Shri Lalit Jain. The ld. DR strenuously contended that the assessee had used this sham transaction as colourable device to reduce its taxable income for the year under consideration arising from sale of property. The ld. DR strongly supporting the action of the AO contended that considering the fact that no delivery of shares sold was given during the year and shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [F.Y. 2008-09] the assessee approached one of its debtors Shri Lalit Jain, also a friend of Shri Rakesh Mahajan [the director of the assessee company] and he accepted the offer of the assessee company and purchased such shares. The ld. AR also pointed out that after the sale by the assessee the shares were physically delivered to Shri Lalit Jain and the same were duly registered and transferred in the name of Shri Lalit Jain on 29.3.2009. The ld. AR vehemently contended that the AO proceeded to make disallowance by recording perverse findings and only on the basis of statements of Shri Lalit Jain recorded on 26.12.2011 which had been retracted by him. 12.5 The ld. AR further contended that the ld. CIT(A), in para 8.6 has properly considered the submissions of the assessee and also the allegations of the AO has been properly rebutted by the assessee and the first appellate authority has also considered the same while granting relief to the assessee. The ld. Senior Counsel also contended that the assessee received sale consideration in respect of sale of shares by two account payee cheques totalling ₹ 79 lakhs and advancing of loans and repayment of different and detached tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alance of ₹ 9 lakhs was outstanding on 31.3.2008 against Shri Lalit Jain. The ld. CIT(A) also noted that the buyer Shri Lalit Jain paid sale consideration of ₹ 79 lakhs to the assessee through two separate cheques totalling ₹ 79 lakhs. The transaction of advance was expected much earlier i.e. before 7-8 years upto F.Y. 2007-08 and the transaction of sale of shares was independently undertaken in F.Y. 2008-09 and these two are separate transactions and there is no linkage between these transactions which are purely separate and independent. We are of the view that merely because some amount of ₹ 9 lakhs of advance was due in the beginning of financial period the transaction of sale of shares cannot be alleged as colourable device by wrongly observing that the seller assessee advanced interest free loans to the assessee enabling him to buy shares. In view of the above, we are of the opinion that the findings of the AO are baseless that the assessee had treated the amount received as consideration from the sale of shares against recovery of amount earlier given as advance during F.Y. 2000-01 and 200102 and the same was rightly rejected by the ld. CIT(A) and we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter without any cogent or justified reason merely by observing that the statement on oath cannot be discarded by filing a simple letter which is not a proper approach for a quasi judicial authority. The AO can very well discard the retraction letter but for that the AO is duty bound to bring on record some substantial evidence or allegation that the buyer Shri Lalit Jain resold the shares to the assessee during the next financial period and to demolish details as per balance sheet and the statements of account filed by Shri Lalit Jain alongwith the said letter dated 27.12.2011 supporting the fact that he never resold these shares to the assessee. 13.6 In view of the above noted observations we are in agreement with the conclusion of the ld. CIT(A) that the transaction of sale of shares had actually taken place with Shri Lalit Jain and he actually paid consideration of ₹ 79 lakhs through two account payee cheques. It is also very clear that after purchase of these shares, that the shares were actually transferred in the name of the buyer Shri Lalit Jain on 29.3.2009 and also that the shares were physically received by the buyer immediately after such sale and that reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehemently disputed the conclusion of the ld. CIT(A) in para 9.6 page 35 of the impugned order and submitted that the loss accrued to the assessee due to assignment of debit outstanding from M/s VHEL was capital loss which has arisen from interest bearing inter corporate loan and the same is capital loss which cannot be treated as bad debts. 13.10 The ld. DR lastly contended that the ld. CIT(A) allowed the claim of deduction on bad debts to the assessee u/s 36(1)(vii) of the Act and there is a rider under the provision of clause (i) of section 36(2) of the Act because the money was not lent in the ordinary course of money lending business. 13.11. Per contra, the ld. Sr. Counsel for the assessee submitted that the assessee filed its detailed reply dated 19.10.2011 and 14.12.2011 and categorically explained that M/s VHEL Industries Ltd borrowed money by way of short term advance/loans/bill discount and agreed to pay a sum of ₹ 3 crores. The ld. AR further explained that during the year under assessment, the assessee company had assigned its debts of ₹ 3 crores recoverable from M/s VHEL Industries Ltd to Hanuman Construction Corporation Ltd for a sum of ₹ 75 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat else is required. It is further interesting to note that the interest of ₹ 21,05,278 accrued on this very ICD is also claimed as a bad debt and the AO has allowed the same. Therefore, considering the facts of the case, the claim of the assessee for deduction of ₹ 1 crore is allowed. 13.13 The ld. Sr. Counsel vehemently contended that the assessee offered interest receipts from VHEL Industries I Ltd for tax a business income in the earlier years and the AO while disallowing the claim of the assessee did not make any addition with regard to the interest of ₹ 1,06,027/- accrued thereon as bad debt. Therefore, the ld. Sr. Counsel submitted that the issue is clearly covered in favour of the assessee by the above noted judgment of the Hon'ble Jurisdictional High Court and ITAT Hyderabad Bench [supra]. 13.14 The ld. DR also placed rejoinder to the above submissions of the assessee and contended that in case of interest bearing loan or advance there are two exceptions viz. If the assessee is in the business of banking and money lending, then the bad debts arising therefrom may be allowed u/s36(1)(vii) of the Act. Otherwise, if the loans/advanced has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in the instance case as the facts are different in this case. Reliance is placed on following judgements: (12) Assessee's claim for bad debt of a loan given by him was held not allowable as the assessee was found to be not a money-lender [K.J. Somaiya Sons Pr. Ltd. v. CIT, (1985) 155 ITR 605 (Bom)]. (14) The loan written off as bad was held not allowable as bad debt because the loan was not incidental to the carrying on of the business of supply of goods by the assessee [indequip Ltd. v. CIT, (1993) 202 ITR 417, 422 (Bom)]. 14.1 We further observe that the assessee again filed its letter on this issue dated 19.12.2011 explained as under: This has reference to the discussion with the undersigned wherein you had asked why amount of ₹ 2,26,06,027/- claimed to be written off in the books of accounts be not disallowed. In this regard we have to submit as under: As explained earlier, during the year under assessment the assessee company had assigned its debt of ₹ 3 crore recoverable from VHEL Industries Ltd. to Hanuman Construction Corporation Ltd. of ₹ 75,00,000/- thus suffering a loss of ₹ 2,25,000,00/- which the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), we note that the fact pertaining to the issue has not been disputed by the AO that the assessee advanced ₹ 3 crores interest bearing loan to M/s VHEL Industries P. Ltd and the same was assigned to M/s Hanuman Construction Corporation Ltd for ₹ 75 lakhs under tripartite agreement and thus there was short fall of ₹ 2.25 lakhs which was claimed by the assessee as deduction u/s 36(2)/36(1)(vii) of the Act. The assessee also contended that rider created by clause (i) to section 36(2) of the Act does not come in the way of the assessee since the money was lent in the ordinary course of money lending carried out on the assessee which is an inter corporate deposit [ICD] and in view of the order of the Hyderabad ITAT Bench in the case of ITW Signode I Ltd [supra] the claim of the assessee is allowable as bad debt u/s 36(1)(vii) of the Act. 14.3 The controversy remains that whether the claim of the assessee with regard to the bad debts arising from VHEL Industries Ltd is allowable u/s 36(1)(vii) of the Act and requirement of section 36(2) of the Act are satisfied. In the present case, undisputedly, the assessee had given inter corporate deposit on interest to M/s VHE ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
