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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SRI MAHAVIR SINGH
O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / PER MAHAVIR SINGH, VP: This appeal of the assessee is arising out of order of the Commissioner of Income Tax (Appeals)]-8, Mumbai [in short CIT(A)], in appeal No. CIT(A)-8/IT-551/2015-16 vide dated 13.06.2019. The Assessment was framed by the Income Tax Officer, Ward 3(2)(2), Mumbai (in short ITO/ AO) for the A.Y. 2012-13 vide order dated 22.02.2016 under section 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’).
When this appeal was called for hearing, none was present from assessee but assessee filed an adjournment letter. This matter is coming for hearing on last three occasions and none 2 Mithu G. Hundalani; AY 13-14 was present from assessee’s side. Hence, seen the nature of additions and grounds of appeal, the matter is heard.
3. The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of the Assessing Officer in making addition of long term capital loss on sale of furniture and fixtures. For this, assessee has raised the following ground No.1:-
1. On the facts of the case and as per law, the learned commissioner of Income Tax (A) erred in confirming the addition of Long Term Capital Loss of Rs. 2,50,782/- on sale of furniture and fixtures as the furniture was not for personal use of the appellant and was installed in the flat given on Leave & License and no depreciation was claimed on cost of furniture and fixture.
4. I have heard the learned Sr. Departmental Representative and gone through the facts and circumstances of the case. I noted that the assessee has claimed capital loss from sale of furniture amounting to ₹2,50,782/-. The assessee has purchases this furniture at ₹2,70,782/- and sold the same at ₹20,000/-. The assessee claimed loss on sale of furniture against long term capital gain declared at ₹46,28,711/-. According to Assessing Officer this is not a capital asset and hence, loss cannot be allowed. He disallowed the loss claimed by assessee on sale of furniture amounting to ₹2,50,782/-. The CIT(A) also confirmed the action of the Assessing Officer. Aggrieved, assessee is in appeal before Tribunal.
3 Mithu G. Hundalani; AY 13-14 5. I noted from the facts of the case available on record. The assessee has provided furniture and fixture in Flat No.12, Natural Breeze, Dr. Annie Besant Road, Worli, Mumbai and the flat was given on leave and license basis on which composite rent was received inclusive of furniture. The assessee claimed that this is capital asset because it is not used for personal use of the tax payer. From the facts of the case I noted that the assessee has provided furniture and fixture in the flat and flat was given on leave and license basis on which composite rent was received. Once, this is a fact that the assessee once sold the furniture and fixture, the loss arising out of the same is allowable. Hence, I allow the claim of long term capital loss and direct the Assessing Officer accordingly. This issue of assessee’s appeal is allowed.
The next issue in this appeal of assessee is as regards to the order of CIT(A) confirming the addition of ₹5,44,453/- on account of disallowance of bad debts. For this, assessee has raised the following ground No.2: - “2. On the facts of the case and as per law, the learned Commissioner of Income Tax (A) has erred in confirming the addition of Rs. 5,44,453/- On account of bad debts though the same were business debts and have been written off in the Books of Accounts of the Appellant.”
7. I have heard the learned Sr. Departmental Representative and gone through the facts and circumstances of the case. The assessee is engaged in the business of letting out of cranes on 4 Mithu G. Hundalani; AY 13-14 hire under the proprietary concern of M/s Ganesh Crane Services. The Assessing Officer during the course of assessment proceedings noticed from the computation of income that the assessee has shown business loss of ₹19,62,531/-, which mainly arose on account of claim of bad debts of ₹18,06,382/-. The Assessing Officer has narrated the entire detail of bad debts in its order in para 4.2. The Assessing Officer allow the claim of business loss to the extent of ₹2,76,023/- and disallowed the claim of balance bad debt totaling to ₹15,30,358/- in regard to item No.11 to 17 noted in the assessment order at Para 4.2. Aggrieved, assessee preferred the appeal before Commissioner of Income Tax (Appeals). The CIT(A) restricted the disallowance at ₹5,44,453/- from the following parties:
Sr.No Name of the party to whom advances given Amount in (Rs.) 1. Staff Loan to Ishwar Singh 25000 2. Creative Global 28218 3. Credence Securities Pvt. ltd. 25000 4. Mahadeo Info Synergies 16236 5. Namdeo Dhansal 500000 Aggrieved, assessee came in appeal before Tribunal.
During the course of hearing, now before me, the learned Sr. Departmental Representative vehemently supported the order of the learned Commissioner of Income Tax (Appeals).