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While passing the order dated 12th March 2019, in the aforesaid 12.03.2019 for AY 2013-14 there is mistake apparent from record crept in Paras 5,6,8 & 9 and the same is corrected and may be read as under: - Para 5 may be read as under: - “5. Before us, ld Counsel for the assessee filed copy of Tribunal order for the assessment years 2009- 10 & 2010-11 in & 6331/Mum/2013 order dated 30.10.2015, wherein, the Tribunal exactly on identical issue dismissed the claim of the assessee vide para 5 as under:
5. After going through the rival submissions and the material before us we find that the business of the assessee involves acquiring NPAs from banks or financial institutions. These NPAs are loan amounts of various types of parties where loss is outstanding against the party and such party has also given certain assets as security to the bank/ financial institutions. The charge of such securities also comes to the assessee with NPAs. Either the NPA loan is recovered from the party and automatically the charge of the assets by which the loan was secured comes to an end. But generally such loans are bad accounts therefore assessee has to realize the money by disposing of the assets secured against such loan. Any profit or loss at the end of the entire process of recovery and disposing of the assets is charged/credited to the Profit & Loss Account. This is a long drawn process and may involve a few years. There is uncertainty about the amount to be realized and the period during which it would be realized. In view of this the assessee wants to claim the expenses relating to recovery and maintaining of such NPAs to Profit & Loss Account as revenue expenditure. Assessee has practical difficulties in valuing such NPAs because it is not certain as to how much will be the realization and when. It may be difficult to even partially realize the revenue or determine the profit. Therefore the assessee is not crediting Profit & Loss Account with recovery as and when made whereas that is transferred to NPA A/c. and only at the end, net profit or loss is transferred to the Profit & Loss Account. Therefore the expenditure incurred during the recovery process relates to the recoveries which are to be accounted for in the NPA account either in this year or in future whenever the recoveries are made. Therefore, as per matching principle of accountancy they are not matching with the revenue realized before the NPA is settled. Such expenditure should be treated as work-in-progress with each NPA and transferred to Profit & Loss Account only when the NPA is finally settled. Accordingly CIT(A) was justified in rejecting the claim of the assessee on this account. This reasoned findings of the CIT(A) need no interference from our side because such expenses should be treated as work-in-progress with each NPA and transferred to Profit & Loss Account only when the NPA is finally settled. Accordingly the appeal filed by the assessee is dismissed.