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2017 (5) TMI 157

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..... ding merit in the arguments of ld.DR that the documents relating to TDR were not before the AO and the matter should be restored back to AO for verification of claim of the assessee on the basis of the said papers. Therefore, it would be in the interest of justice, if the order of the FAA is set aside and the AO is directed to consider the issue of allocation of TDR denovo with fair and reasonable opportunity of hearing to the assessee. Accordingly, we set aside the order of Id. CIT(A) and direct the AO to decide the issue on the basis of material available on record and also evidence as supplied by the assessee in the set aside proceedings and allow the claim of the TDRs were found to be brought in by the partner as capital contributio .....

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..... ck in hand of the firm coming over from the earlier years as the firm is in the business of construction and therefore TDR has direct connection with the business of the firm. The ld.AR submitted that the amount receivable on account of TDR is recognized as income in the profit and loss account in the earlier years at the time of generation of TDR and the resultant income stands assessed to tax though in the hands of one of the partners. It was also submitted that the period of more than 10 years have elapsed and amount of TDR was not received in favour of the assessee and therefore the amount was rightly written off during the year. The AO observed that the TOR was generated in the financial year 2000-2001 on completion of a rehabilitation .....

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..... cussed in the table above. Once it is found that the said TDR of 380 sq.m in respect of Shiv Shaktl project was granted not to the appellant but to Akruti Nirman Pvt. Ltd. which is a separate assessable entity, it is hard to understand as to how the appellant can write off the value of the said TOR in its own books of account and claim the same as a business loss u/s.28(i) of the Act. In these circumstances, there is no hesitation in holding that not to speak of proving that the said business loss had arisen or occurred during the accounting period relevant to the A.Y. under consideration, the appellant has not even been able to establish the primary fact that it had suffered the aforesaid business loss of ₹ 12.27,085/- on account of .....

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..... accordingly as per the evidences. 6. We have heard the rival contentions and perused the material placed before us including the impugned orders. After examining the records before us we are of the considered view that the partner in the assessee firm brought these TDR s into the firm as its capital contribution and was treated as part of stock in trade over the years before being written off during the year. We are not in agreement with the conclusion the first appellate authority on this issue that claim of the assessee remained unsubstantiated. In our considered view the assessee has to be allowed write off of the said TDR when it finally became bad. But finding merit in the arguments of ld.DR that the documents relating to TDR were .....

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