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TMI Blog2021 (3) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012-2013 while taxing the recovery of the same in the assessment year 2020-2021 and 2021-2022. Thus, in the light of the subsequent development, the order passed by the CIT(A) requires to be sustained. Appeal filed by the revenue is dismissed. - Tax Case Appeal No.471 of 2018 - - - Dated:- 2-3-2021 - Honourable Mr. Justice T.S. Sivagnanam And Honourable Mrs. Justice R.N. Manjula For the Appellant : Ms.R.Hemalatha Senior Standing Counsel For the Respondent : Mr.Anand Sashidharan JUDGMENT T.S.SIVAGNANAM, J. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 16.10.2017 made in I.T.A.No.1304/Mds/2016 on the file of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by letter dated 27.09.2009 Ms.Sandhya Mulchandani has clearly stated that it was an unsecured interest free loan for the purchase of residential property by her and not for the purpose of assessee's real estate business? 3.We have heard Ms.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant/revenue and Mr.Anand Sashidharan, learned counsel appearing for the respondent/assessee. 4.The assessee had filed their return of income for the assessment year under consideration, 2012-13 on 30.09.2012 admitting a total income of ₹ 27,37,490/-. The said return was processed under Section 143(1) of the Act. Subsequently, the case for selected for scrutiny and notice under Section 143(2) was issued on 12.08.2013 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36[2] of the Act. After making other disallowances, the Assessing Officer had assessed the total income of ₹ 55,24,674/-. The assessee preferred an appeal before the Commissioner of Income Tax [Appeals] [hereinafter referred to as CIT(A) ] which was dismissed by order dated 01.02.2016. Aggrieved by the same, the assessee preferred appeal before the Tribunal which has been allowed. The revenue is before us questioning the correctness of the Tribunal and seeking for an answer to the substantial questions of law framed for consideration. 5.The Tribunal found that the assessee is engaged in the real estate business other than motor racing, etc. and it is therefore clear that one of the activities of the assessee firm is real estate bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.The revenue is before us contending that Ms.Sandhya Mulchandani in her letter has clearly stated that the loan given was interest free and unsecured loan and she would repay the said amount and therefore, the debt could not be a bad debt. Further the Tribunal failed to note that in the books of accounts of the assessee a sum of ₹ 5 Crores has been entered as unsecured loan only and not as advance given for purchase of property. Further, the revenue seeks to dispute the the nature of business activity done by the assessee stating that they are into the business of motor racing and rallying and not in the business of money lending and therefore bad debts does not spring directly from the business of the assessee. On the above groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent and explained that she was unable to repay the advance due to issues faced by her and offered to repay the amount advanced to her. The respondent gladly welcomed the offer. 10.In November 2019, a sum of ₹ 2,00,00,000/- (Rupees Two Crores) was repaid by Mrs.Sandhya Mulchandani to the respondent and this sum was offered as income in the financial year 2019-2020 under Section 41 of the Act. Subsequently, a sum of ₹ 3,00,00,000/- (Rupees Three Crores) was repaid in the Financial Year 2020-2021 and the same has been offered as income and advance tax has been paid on the same. Therefore, the recovered amount forming part of the amount written off has been offered as income under Section 41 of the Act and there is no revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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