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TMI Blog2016 (6) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. has wrongly assumed the jurisdiction u/s. 147 of the Act, without appreciating the fact that the A.O. had reason to believe that income has escaped assessment and that mere production of books of a/c or a foot-note in the computation of income does not necessarily amount to disclosure within the meaning of first proviso to sec. 147 as mentioned in Explanation 1 to sec 147 of the Act." 2. "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in treating the 'Loss on sale of investment' amounting to Rs. 7,30,31,599/- as business loss, without appreciating the fact that the loss pertained to sale of long term investment as exhibited in schedule E of the Balance Sheet, being a capital loss." 3. "On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10,97,05,670/- on account of written off interest on OCD's. Assessee was asked to explain why the same should not be disallowed. From the records, it was found that the assessee has made provision for doubtful recoverable during the year immediately proceeding the year under consideration. While computing the assessable income, assessee also claimed the same deduction during the year under consideration. Assessee claimed the same as bad debts. Since the assessee has not written off the same as bad debts, the Assessing Officer disallowed the sum of Rs. 10,97,05,670/- and added the same to the income of assessee. The assessment u/s.147/143(3) of the Act was completed on 29.12.2010 determining total income at Rs. 18,27,37,269/-. 2.1 Mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.Y. 1992- 93 and A.Y. 1993-94 Assessing Officer treated the sale of shares as business income/loss and completed the assessment u/s 143(3) of the Act. The said orders have also been confirmed by the CIT(A) for both the years. Thereafter, assessee has been consistently showing the sale of shares as business income or loss which has also not been disturbed by the Assessing Officer till A.Y. 2005-06. The return of income filed for the assessment year 2005-06 contain a footnote in the computation of total income that the company is holding shares, debentures etc. as investments in group companies and the gain or loss on disposal of shares/debentures have been treated as business income/loss as per the last assessments. Once such note has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares. Assessee has been showing the shares as investments in the balance sheet, however, for A.Y. 1992-93 and A.Y. 1993-94, Assessing Officer treated the sale of shares as business income/loss and completed the assessment u/s.143(3) of the Act. The said orders have also been confirmed by CIT(A) for both the years. Assessing Officer himself had assessed the income or loss on account of sale under the head 'profit & gains from business' instead of 'income of capital gains' shown by assessee, which has been followed by assessee consistently. Assessing Officer has not given any reason except stating that the assessee had shown the said shares as long term investments in the balance sheet. In this regard, CIT(A) observed that assessee has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed as deduction. During A.Y. 2005-06 assessee has written off interest receivable and claimed the same as allowable deduction in the computation of income. Since the provision was debited in P&L account last year the same was not debited once again in the P&L account this year. Instead the assessee claimed deduction only in the computation of income for A.Y. 2005-06. Assessee explained necessary entries were passed in the books of account with reference to write off of bad debts. The entries passed by assessee have been verified and found to be correct. So, following the decision of Hon'ble Supreme Court in the case of TRF Ltd. vs CIT [323 1TR 397], the addition made on account of bad debts written off of Rs. 10,97,05,670/- was rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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