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TMI Blog2023 (7) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, Ld. AO should have invoked Section 37 and allowed the write off as an expenditure. There is no material on record to show as to what was the nature of agreement or transaction entered into and how though services which were sought were related to the purpose of business of assessee. In fact as the advances were paid in the year 2010-11 then in the relevant previous year 2014-15, the recovery of amount for non-provision of service, would also become time barred and which also needed the examination on facts. The assessee at this stage cannot seek relief to allow the claim u/s 37 of the Act merely because some relief has been given by Ld. CIT(A) in regard to other addition. Thus, ground no. 1 is decided against the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing grounds; 1 That having regard to the facts and circumstances of the case , the Ld CIT (Appeals)-I, Gurgaon has erred in law and on the facts of the case in confirming the addition made by the Ld. ACIT Circle 4(1), Gurgaon rejecting the claim of the appellant for write off of the outstanding due from Sh Sanjay Aggarwal of Rs 4,00,000/- charged to Profit Losss Account. 2 That having regard to the facts and circumstances of the case , the Ld CIT (Appeals)-I, Gurgaon has erred in law and on the facts of the case in confirming the addition made by the Ld. ACIT Circle 4(1), Gurgaon rejecting the claim of the appellant for write off of the outstanding due balance of Hughes Communications Ltd of Rs. 6,71,417/-by charging to Profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if under a mistake of misconception a wrong section has been cited that cannot be basis for denying the deduction. He also relied judgment of the Tribunal in Altus Group (India) Pvt . Ltd ., New Delhi v . DCIT , New Delhi . ITA 1226 / DEL / 2016 order Dated 14-11-2019. 4. As with regard to ground of disallowance of Rs. 67,147/- returned to M/s. Hughes Communications Ltd. pursuant to court cases, Ld. Counsel submitted that sum of Rs. 7,81,481/- was received from this entity which had made a wrong payment and the appellant considered the credit in the bank account as its income and raised an invoice on 24.09.2011. However this entity filed a Civil Suit and in settlement of said Civil Suit a sum of Rs. 9,00,000/- was paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Court decree. Ld. CIT(A) has held that as Rs. 4 lakhs was not trading debit and was never taken into account as part of income of any previous year in such circumstances write off advance of Rs. 4 lakhs is not allowable deduction u/s 36(1)(vii) of the Act. 7. There is no doubt that within the provisions of Section 36(1)(vii) of the Act the deduction was not allowable. A perusal of the submissions of assessee before Ld. CIT(A) and the grounds raised in the first appeal before Ld. CIT(A) show that assessee had not made any specific claim that instead of provisions of Section 36(1)(vii) of the Act, Ld. AO should have invoked Section 37 and allowed the write off as an expenditure. The submissions reproduced by Ld. CIT(A) on page no. 3 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Tax Authorities have failed to allow. Thus Bench is of considered view that the assessee at this stage cannot seek relief to allow the claim u/s 37 of the Act merely because some relief has been given by Ld. CIT(A) in regard to other addition. Thus, ground no. 1 is decided against the assessee. 8. In regard to Ground no. 2 it can be appreciated that Ld. CIT(A) has considered the amount of Rs. 7,81,481/- as an advance received by the appellant and accordingly the interest was allowed u/s 37 of the Act. Ld. Tax Authorities have failed to appreciate that the amount was in fact not an advance but was received mistakenly and which under a Court decree had to be returned with interest. If interest was allowable u/s 37 of the Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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