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TMI Blog2020 (4) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... o show that the expenditure was related to his business / trading activity and that overdraft was used for the purpose of business. Hence, decline to interfere in the order of the CIT(A). - Decided against assessee. - ITA No.1625/Bang/2019 (Assessment year : 2016-17) - - - Dated:- 14-1-2020 - SHRI A. K. GARODIA, ACCOUNTANT MEMBER Assessee by : None Revenue by : Shri. Ganesh R. Ghale, Advocate Standing Counsel to Department ORDER This appeal is filed by the assessee and the same is directed against the order of the learned CIT(A)-3, Bangalore dated 16.05.2019 for Assessment Year 2016-17. 2. The grounds raised by the assessee are 5 grounds but the grievances are 2 i.e., regarding disallowance of the claim of bad d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an expenditure of ₹ 6,61,216/- as NSEL loss against his income from other sources. The appellant was asked to explain as to how the same was an allowable expenditure as per provisions of Section 57(iii) of the Act. In response to the same the appellant informed that the amount pertained to the bad debts that arose on account of trading on commodities in the National Spot Exchange Limited (NSEL). The appellant submitted that the loss was being written off as irrecoverable in the books of account proportionately from AY 2014- 15 onwards. The appellant submitted that there were total bad debts of ₹ 29.34 lakhs and an amount of ₹ 22.72 lakhs had already been claimed by him in AY 2014-15 and AY 2015-16 and only the balance a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim was erroneous. However, the appellant submitted that the AO should have allowed the same as business expenditure. In order to verify this claim of the appellant, the appellant was asked to produce financials for FY 2013-14 and to show that he satisfied the conditions laid down under Section 36(1)(vii) and under Section 36(2) of the Act. The requisite details were produced by the appellant. A perusal of the same shows that the debts of ₹ 29,33,528/- had already been written off by the appellant in his books of accounts in FY 2013-14 itself and as such no such debts existed as on 31.03.2015 or 31.03.2016. Now as per provisions of Section 36(1)(vii) of the Act only such amount can be allowed as deduction which has been written off a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount is allowable deduction under Section 57(iii) of the Act nor the same can be allowed as business expenditure. 5. In view of the facts of the present case as noted above, I do not find any infirmity in the order of the CIT(A) regarding the decision in respect of both these issues. Regarding bad debts, he has given a categorical finding that this claim is not allowable neither under section 57(iii) nor under 36(1)(vii) of the IT Act, 1961 and regarding disallowance of interest expenditure also, he has given a categorical finding that this amount is not allowable under section 57(iii) of the IT Act, 1961 and it is not allowable as a business expenditure because the assessee has not produced any details to show that the expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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