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TMI Blog2022 (10) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... S HIGH COURT] where as clearly held that any profit or loss arising from the chit subscription activity is liable for taxation and consequent loss of chit is a allowable deduction. The finding of facts recorded by the Ld. CIT(A) in light of decision of Jurisdictional High Court of Madras, V. Raj Kumar vs CIT is uncontroverted by the Revenue. Therefore, we are inclined to uphold the findings of the Ld. CIT(A) and reject ground filed by the Revenue. Unexplained credit u/s. 68 - AO has made addition towards unsecured loan taken from M/s. D.S. Metal (P) Ltd and M/s. Shakthi Metals and Steels, on the ground that the assessee could not submit necessary evidence including confirmation letters from the party - CIT(A) deleted addition on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to assessment year 2012-13. 2. The Revenue has raised the following grounds of appeal: 1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case. 2. The ld.CIT(A) erred in allowing the claim of chit loss even when running chit fund was not assessee's business and the contributions made to the chit fund cannot be treated as revenue expenditure, nor indeed the payment and receipt of any amount to and from the chit fund are the business activity of the assessee. 3. The ld.CIT(A) erred in relying on the decision of the jurisdictional Hon'ble High Court in the case of V.Rajkumar Vs CIT (2006) in TCA No.2601 of 2006 even when facts of the instant case are not similar as the question b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the confirmation letters from M/s.DS Metals submitted during the appellate stage, the outstanding balance of Rs.3,21,53,296/- was towards sale of goods. 9. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer be restored. 3. The brief facts of the case are that, the assessee is engaged in the business of manufacturing and wholesale trading in iron steel scraps and finished goods, filed its return of income for the assessment year 2012-13 on 19.09.2012 admitting total income of Rs. 1,52,05,529/-. The case has been selected for scrutiny and the assessment has been completed u/s. 143(3) of the Income Tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and incurred loss. The assessee has claimed chit loss as business loss on the ground that the chit fund has been used for the purpose of business. The AO had disallowed chit loss on the ground that the subscription to chit is mutuality and any gain on chit fund is exempt from tax and consequently, loss on chit cannot be allowed as deduction. 6. We have heard both parties and considered relevant materials available on record. We find that, the CIT(A) has deleted the addition by following decision of Hon ble Madras High Court in the case of V. Raj Kumar vs CIT (2006) in TCA No.2601 of 2006, where the Hon ble High Court clearly held that any profit or loss arising from the chit subscription activity is liable for taxation and consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to comment on additional evidence filed by the assessee. Therefore, on this ground itself, the addition made by the AO cannot be sustained. Be that as it may, the CIT(A) has discussed the addition made by the AO in light of confirmation letters filed by the assessee and has recorded categorical finding that the assessee has proved unsecured loan, claims to have been received from M/s. D.S. Metal (P) Ltd and M/s. Shakthi Metals and Steels. The factual findings recorded by the Ld. CIT(A) is uncontroverted by the Revenue. Therefore, we are of the considered view that there is no error in reasons given by the CIT(A) to delete addition towards unexplained cash credit and thus, we are inclined to upheld the finding of the CIT(A) and reject the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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