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TMI Blog2010 (12) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... ates from the order of Commissioner of Incometax (Appeals)-V, New Delhi, passed in appeal no. 58/09-10 on 18.06.2010 relating to assessment year 2007-08. The corresponding assessment order was framed by the Deputy Commissioner of Income-tax, Circle-2(1), New Delhi, on 29.09.2009 under the provisions of section 143(3) of the Income-tax Act, 1961. The assessee has taken up two grounds, the sum and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 2,24,500/-, being the advance paid to Municipal Corporation of Faridabad in respect of open bid for purchase of land for the purpose of constructing shops thereon. The assessee could not pay further installments, therefore, the amount was forfeited. Accordingly, the amount was written of as bad debt. The assessee was required to explain how the amount is deductible in computing the total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture in computing the total income, reliance was inter-alia placed on the decision of Hon ble Supreme Court in the case of Empire Jute Co. Ltd. Vs. CIT, 124 ITR 1. The ld. CIT(Appeals) mentioned that the aforesaid advance was not shown by way of stock-in-trade in the profit and loss account or the balance-sheet. It was merely shown as advance in the balance-sheet. The expenditure was incurred in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss account or balance-sheet as stock-in-trade but only as an advance. Therefore, on forfeiture of the amount by the Municipal Corporation of Faridabad, the loss occurring to the assessee is on capital account. 5. We have considered the facts of the case and submissions made before us. The AO has clearly mentioned in paragraph 2 of the assessment order that the assessee is carrying on the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also not obtained any advantage of enduring nature so as to constitute the expenditure to be capital expenditure. Accordingly, it is held that the loss has been incurred in revenue field in the course of business. Therefore, the same is deductible in computing the total income. 5.1 We, however, agree with the findings of the lower authorities that it is not a case of bad debt, covered under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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