Premium Restaurant Pvt.Ltd., Ahmedabad V. The ACIT.,(OSD)Circle-5, Ahmedabad

ITA 1853/AHD/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6189 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 27-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PF JAIN
• Keywords: Capital asset; Depreciation; Opportunity of being heard; Bad and doubtful debts; Corroborative evidences; Revenue expenditure; Capital expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 1853/AHD/2012 / ASSESSMENT YEAR : 2009-2010 PREMIUM RESTAURANT PVT. LTD., 911, SHIROMANI COMPLEX, OPP. OCEAN PARK, SATELLITE, AHMEDABAD-380015 PAN : AAACI 7003 G VS ACIT (OSD), CIRCLE-5, AHMEDABAD ./ ITA NO. 1960/AHD/2012 / ASSESSMENT YEAR : 2009-2010 ACIT (OSD), CIRCLE-5, AHMEDABAD VS PREMIUM RESTAURANT PVT. LTD., AHMEDABAD-380015 PAN : AAACI 7003 G / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P. F. JAIN, AR REVENUE BY : SHRI K. MADHUSUDAN, SR DR / DATE OF HEARING : 13/04/2017 / DATE OF PRONOUNCEMENT: 21/04/2017 / O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER :- THESE ARE THE CROSS-APPEALS FILED BY THE ASSESSEE A ND REVENUE RESPECTIVELY AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XI, AHMEDABAD DATED 25.06.2012 FOR AY 200 9-10. 2. FOLLOWING GROUNDS ARE RAISED BY THE ASSESSEE IN ITS APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS IN UPHOLDING THE ADDITION OF RS.14,01,655/- MADE BY THE AO FOR A LLEGED GAIN ON SALE OF FIXED ASSETS WITHOUT PROPERLY APPRECIATING THE FACT S OF THE APPELLANT. ITA NOS. 1853 & 1960/AHD/2012 ASSESSEE -PREMIUM RESTAURANT PVT LTD AY : 2009-10 2 2. LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDI NG THE ADDITION OF RS.25,55,428/- MADE BY THE AO ON ACCOUNT OF DEBIT B ALANCES WRITTEN OFF WITHOUT PROPERLY APPRECIATING THE FACTS OF THE APPE LLANT AND WITHOUT CONSIDERING THE BALANCES WRITTEN BACK. 3. REVENUE HAS TAKEN FOLLOWING GROUNDS IN ITS APPEA L:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALL OWING THE SET OFF ON UNABSORBED BUSINESS LOSSES AGAINST THE SHORT TERM C APITAL GAIN AS DECLARED U/S 50 OF THE IT ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (A) OUGHT NOT HAVE ACCEPTED THE PLEA OF THE ASSESSEE RAISED DURING THE APPELLATE PROCEEDINGS, FOR SET OFF OF UN ABSORBED BUSINESS LOSSES AGAINST THE SHORT TERM CAPITAL GAIN. 4. THE BRIEF FACTS OF THE CASE, AS CULLED OUT FRO M THE RECORD, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN HOTEL BUSINESS. FO R THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INC OME ON 21.09.2009, DECLARING TOTAL INCOME AT RS.66,52,409/. THEREAFTER, THE CAS E WAS SELECTED UNDER SECURITY BY ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT 18.08.2010. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SOLD THE HOTEL BUILDING AT THE COST OF RS.1,60,00,000/-, ON WHICH THE CAPITAL GAIN WAS SHOWN AT RS.1,11,69,201/-. TH EREAFTER, ON FURTHER VERIFICATION OF THE DEPRECIATION CHART, THE ASSESSI NG OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED RS.14,01,655/- AS WRITTEN OFF IN PROFIT & LOSS ACCOUNT; HOWEVER, THE ASSESSEE DID NOT SHOW THE INC OME BY WAY OF SALE OF THESE ASSETS. THUS, THE WDV OF THE ASSETS OF RS.14, 01,655/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AND CONSIDERED THE SAM E AS SHORT TERM CAPITAL GAIN BY THE LD. ASSESSING OFFICER. 5. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE TH E LD. CIT(A) WHO, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER, BY OBSERVING AS UNDE R:- ITA NOS. 1853 & 1960/AHD/2012 ASSESSEE -PREMIUM RESTAURANT PVT LTD AY : 2009-10 3 3.2 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IT IS SEEN THAT THE APPELLANT DURING THE APPELLATE PROCEEDINGS HAD SUBM ITTED THAT FURNITURE AND FIXTURES, PLANT & MACHINERY AND COMPUTER WAS PART A ND PARCEL OF THE HOTEL BUILDING AND THE SAME WAS SOLD ALONG WITH THE HOTEL BUILDING FOR A LUMPSUM CONSIDERATION OF RS. 1,60,00,000/, THE SUBMISSIONS MADE BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS ARE IN CONTRADICTI ON WITH THE FACTS AVAILABLE ON RECORD AND THE FACTS AS RECORDED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT. IN THE INCOME TAX RETURN THE APPELLANT HAS DECLARED INCOME FROM SHORT TERM CAPITAL GAIN U/S.50 AS RECEIVED FROM SALE OF DEPREC IABLE ASSETS BLOCK I.E. HOTEL BUILDING OF RS. 1,11,69,201/-, THE A.O. HAD CLEARLY MENTIONED THE WORKING OF THE DECLARED SHORT TERM CAPITAL GAIN OF RS.1,11,69, 201/-, IT IS A MATTER OF FACT THAT HOTEL BUILDING WAS SOLD FOR RS. 1,60,00,000/- AND BOOK VALUE OF HOTEL BUILDING IS RS. 48,30,799/-. THIS WAY THE S.T.C.G. ON THE SALE OF HOTEL BUILDING WILL BE RS. 1,11,69,201/- (1,60,00,000 - 4 8.30,799/-). IN VIEW OF ABOVE FACTS, THE APPELLANTS CONTENTION THAT FURNITU RE AND FIXTURES, PLANT & MACHINERY AND COMPUTERS WERE SOLD AS A ONE ASSET FO R A LUMPSUM PRICE OF RS. 1,60,00,0007- CANNOT BE ACCEPTED. 3.3. IT IS A MATTER OF FACT THAT THE APPELLANT HAS CLAIMED ASSETS WRITTEN OFF OF RS. 14,01,655/- IN ITS P & L ACCOUNT. THE WRITTE N OFF EXPENSES CAN BE ALLOWED AS PER THE PROVISIONS OF SEC.36(1)(VII) OF THE IT. ACT AS PER THE PROVISIONS OF SEC.36(1)(VI) OF THE IT. ACT, TO CLAI M DEDUCTION U/S.36(1)(VII) THE FOLLOWING CONDITIONS SHOULD BE FULFILLED. I. IT MUST BE A PROPER DEBT, OR A PART THEREOF II. OF A REVENUE NATURE CONTRADISTINGUISHED FROM CAPITAL NATURE III. WHICH HAS BEEN WRITTEN OFF AS RECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR, IV. (A) WHICH HAS BEEN TAKEN INTO ACCOUNT IN COMP UTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT O F SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARLIER PREVIOUS YE AR, OR (B) WHICH REPRESENTS MONEY LENT IN THE ORDINARY COU RSE OF THE BUSINESS OF BANKING OR MONEY-LENDING WHICH IS CARRIED ON BY THE ASSESSEE. 3.4 THE FACTS AVAILABLE ON RECORD INDICATE THAT THE APPELLANT HAS WRITTEN OFF WDV OF ASSETS OF RS 14,01,655/- THIS BEING SO, THE FIXED ASSETS ARE CAPITAL IN NATURE AND THEY CANNOT BE TAKEN AS REVENUE IN NA TURE SECONDLY, THE INCOME PERTAINING TO AMOUNTS PROPOSED TO BE WRITTEN OFF HAS NEVER BEEN DECLARED BY THE APPELLANT AS INCOME ON ANY EARLIER OCCASION. THIS WAY THE BASIC ELIGIBILITY CONDITION OF SEC. 36(1)(VII) ARE NOT FULFILLED. ACCORDINGLY ITA NOS. 1853 & 1960/AHD/2012 ASSESSEE -PREMIUM RESTAURANT PVT LTD AY : 2009-10 4 I AM OF THE CONSIDERED VIEW THAT THE APPELLANT CANN OT WRITE OFF ASSETS OF RS.14,01,655/- AND CLAIM A DEDUCTION IN THE P & L A CCOUNT. ACCORDINGLY, ADDITION OF RS.14,01,655/- IS CONFIRMED. THIS GROUN D OF APPEAL IS DISMISSED. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE LD. COUNSEL CONTENDED THAT THE SALE REALIZATION OF THE HOTEL BUILDING WAS SOLD ON 'AS IS WHERE IS BASIS' FOR RS.1,60,00000 AND ALL THE FURNITURE, FITTINGS, ELECTRIFICATION, AC PLANT AND OTHER ATTACHMENTS WER E ALSO SOLD ALONG WITH THE BUILDING FOR THIS LUMP-SUM AMOUNT FOR ALL THE ASSETS. HE ALSO CONTENDED REGARDING WRITTEN OFF WDV OF ASSETS OF RS 14,01 ,655/- THAT THESE WERE NOT PART OF THE LUMP-SUM ASSETS SOLD AS A PART OF THE HOTEL BUILDING. WE HAVE PERUSED THE RECORD AND NOTICED THAT THE DETAIL OF T HE ASSETS SOLD AS A LUMP- SUM AS A PART OF THE HOTEL BUILDING WERE NOT SPECIF IED. THESE FACTS WERE ALSO NOT EXPLAINED BY THE REPRESENTATIVE IN THE APPELLAT E PROCEEDINGS BEFORE US. FURTHER WE NOTICED THAT THERE WAS NO EVIDENCE TO SU PPORT THE CLAIM OF THE ASSESSEE THAT WRITTEN OFF WDV OF ASSETS OF RS 14 ,01,655/- WAS NOT PART OF THE LUMP-SUM ASSETS AS A PART OF THE HOTEL BUILDING . THE ASSESSEE HAS ALSO NOT DISCLOSED ANY EVIDENCE INDICATING WHAT AMOUNT W AS REALIZED ON THE SALE OF ASSETS HAVING W.D.V. OF RS.14,01,655/- AND WHERE IT WAS SHOWN IN THE INCOME. DURING THE COURSE OF APPELLATE PROCEEDI NGS BEFORE US THE ASSESSEE COULD NOT PROVIDE SUPPORTING MATERIAL TO J USTIFY ITS CLAIM OF WRITING OFF THESE CAPITAL ASSETS IN THE P& L A/C. WE HAVE ALSO OBSERVED THAT THE COMPLETE DETAILS OF THE ASSETS SOLD AS A LUMP-SUM A S A PART OF THE HOTEL BUILDING HAS NOT BEEN EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WE ARE, THEREFORE, OF THE CONSIDERED OPINION THAT, IN THE INTEREST OF JUSTICE, THE MATTER MAY BE SET ASIDE TO THE FILE OF ASSESSING OFFICER ITA NOS. 1853 & 1960/AHD/2012 ASSESSEE -PREMIUM RESTAURANT PVT LTD AY : 2009-10 5 FOR FRESH ADJUDICATION AFTER VERIFYING THE SUBMISSI ONS OF THE ASSESSEE AND THE SUPPORTING PROOF THEREOF SUBMITTED BY THE ASSESSEE. WE ACCORDINGLY SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICE R FOR DECIDING THE SAME AFRESH ON THE BASIS OF THE SUPPORTING EVIDENCES SUB MITTED BY THE ASSESSEE, AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTI CAL PURPOSES. 8. THE SECOND ISSUE RELATES TO THE ADDITION OF RS.2 5,55,428/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEBIT BALANCES WRIT TEN OFF. WITH REGARD TO THIS ISSUE, THE ASSESSING OFFICER FOUND THAT THE AS SESSEE HAD CLAIMED DEBIT BALANCE WRITTEN OFF OF RS.25,55,428/- IN THE HEAD O F ADMINISTRATIVE AND OTHER EXPENSES; HOWEVER, HE NOTICED THAT THE ASSESS EE HAS NOT EVEN PRODUCED THE COPY OF THOSE ACCOUNTS. THEREFORE, TH E ASSESSING OFFICER HAS DISALLOWED THE BAD DEBTS WRITTEN OFF OF RS.25,55,42 8/- AS THERE WAS NO REASON FOR WRITTEN OFF THE DEBTS U/S SECTION 36(1)( VII) OF THE ACT. 9. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE TH E LD. CIT(A) ON THIS GROUND; BUT WITHOUT ANY SUCCESS. THE RELEVANT OBSE RVATIONS MADE BY THE LD. CIT(A) SUSTAINING THE ADDITION MADE BY THE ASSESSIN G OFFICER OF RS.25,55,428/- ON ACCOUNT OF DEBIT BALANCE WRITTEN OFF ARE REPRODUCED HEREUNDER:- 4,2 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBM ISSIONS. IT IS SEEN THAT THE APPELLANT HAS WRITTEN OFF THE FOLLOWING THREE AMOUN TS IN ITS P & L ACCOUNT SR. NO. AMOUNT WRITTEN OFF NATURE OF DEBIT BALANCE 1. RS.10,00,000 SECURITY DEPOSIT WITH BIG BAZAAR 2. RS.15,00,000 FRANCHISE DEPOSIT WITH BLUE FOODS P VT LTD 3. RS.55,428 TDS RECEIVABLE FROM M/S. TAILORS POINT PVT LTD TOTAL RS.25,55,428 4.3 IT IS SEEN THAT THE APPELLANT HAS WRITTEN OFF S ECURITY DEPOSIT OF RS.10,00,000/- WITH BIG BAZAR. THE APPELLANT HAS CL AIMED THIS EXPENSE AS BAD ITA NOS. 1853 & 1960/AHD/2012 ASSESSEE -PREMIUM RESTAURANT PVT LTD AY : 2009-10 6 DEBTS AS PER THE PROVISIONS OF SEC.36(1 )(VII) OF T HE I.T. ACT. TO CLAIM BAD DEBTS AS PER THE PROVISIONS OF SEC.36(1)(VII), THE APPELLANT HAS TO FULFILL THE FOLLOWING CONDITIONS :- I. IT MUST BE A PROPER DEBT OR A PART THEREO F II. OF A REVENUE NATURE CONTRADISTINGUISHED FR OM CAPITAL NATURE, III. WHICH HAS BEEN WRITTEN OFF AS IRRECOVERABLE I N THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR, IV. (A) WHICH HAS BEEN TAKEN INTO ACCOUNT IN COMP UTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT O F SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARLIER PREVIOUS YE AR, OR (B) WHICH REPRESENTS MONEY LENT IN THE ORDINARY CO URSE OF THE BUSINESS OF BANKING OR MONEY-LENDING WHICH IS CARRIED ON BY THE ASSESSEE. 4.4 IT IS SEEN THAT THE APPELLANT HAS MADE SECURIT Y DEPOSIT OF RS. 10,00,000/- WITH M/S. BIG BAZAAR. SINCE IT IS A SECURITY DEPOSI T, IT CANNOT BE SAID TO BE A REVENUE EXPENDITURE AND THE INCOME IN RESPECT OF TH E PROPOSED BAD DEBT WAS NEVER DECLARED AS INCOME IN THE P & L ACCOUNT OF TH E APPELLANT ON ANY EARLIER OCCASIONS. ACCORDINGLY, THE ELIGIBILITY CRI TERION OF SEC. 36(1)(VII) IS NOT FULFILLED AND I HOLD THAT THE APPELLANT IS NOT ENTI TLED TO CLAIM BAD DEBT U/S.36(1)(VII) IN RESPECT OF SECURITY DEPOSIT OF RS . 10,00,000/-. 4.5 THE APPELLANT HAS ALSO CONTENDED THAT RS, 10 LA CS BE TAKEN AS AN EXPENSE AND BE ALLOWED AS PER THE PROVISIONS OF SEC.37(1) O F THE IT. ACT I AM NOT INCLINED TO AGREE WITH THE APPELLANTS CONTENTION AS PROVISIONS OF SEC.37(1) ATTRACTED TOWARDS REVENUE EXPENSES AND NOT TOWARDS CAPITAL EXPENDITURE. SECONDLY ALLOWANCE U/S.37(1) CAN ONLY BE CLAIMED, I F THE EXPENSES ARE INCURRED DURING THE YEAR UNDER CONSIDERATION. IT IS A MATTER OF FACT THAT THE SECURITY DEPOSIT OF RS. 10,00,000/- WAS MADE ON 1/4 /2004, WHICH IS MUCH BEFORE THE CURRENT ASSESSMENT YEAR. IN VIEW OF ABOV E, I HOLD THAT THE APPELLANT IS NOT ENTITLED TO CLAIM AN EXPENSE OF RS. 10,00,00 0/-AGAINST SECURITY DEPOSIT WITH BIG BAZAAR. 4.6 THE APPELLANT HAS ALSO CLAIMED BAD DEBTS WRITTE N OFF AGAINST FRANCHISE DEPOSIT OF RS. 15,00,000/- WITH M/S, BLUE FOODS PVT . LTD AND IDS RECEIVABLE OF RS. 55,428/- FROM M/S. TAILORS POINT PVT. LTD. D URING THE APPELLATE PROCEEDINGS IT WAS CONTENDED THAT THE DEBIT BALANCE OF RS.15,00,000/- AND RS. 55,428/- WAS ADJUSTED AGAINST THE CREDIT BALANCE OF RS. 17,90,813/- IN THE CASE OF BLUE FOOD PVT. LTD. AND CREDIT BALANCE OF R S.3,82,500/- AGAINST TAILOR POINT PVT. LTD. THE APPELLANT SUBMITTED THAT SINCE THE DEBIT BALANCES AND CREDIT BALANCES WERE IN THE NAME OF SAME PARTIES AN D THE HOTEL BUSINESS WAS CLOSED, ACCORDINGLY BOTH THE ACCOUNTS WERE SQUARED OFF. SINCE THE CREDIT BALANCE WERE MUCH MORE THAN THE DEBIT BALANCES, ACC ORDINGLY, THE APPELLANT ITA NOS. 1853 & 1960/AHD/2012 ASSESSEE -PREMIUM RESTAURANT PVT LTD AY : 2009-10 7 CONTENDED THAT THERE IS NO JUSTIFICATION FOR DISALL OWANCE OF BAD DEBT OF RS. 15,55,428/-. TAKING IN VIEW THE ENTIRETY OF FACTS, I AM NOT INCLINED TO AGREE WITH THE CONTENTIONS OF THE LD. A.R. IT IS SEEN THA T IN THE P & L ACCOUNT, THE APPELLANT HAS DECLARED INCOME FROM BLUE FOODS PVT. LTD. AND TAILOR POINT PVT. LTD. THE APPELLANT HAS ALSO SEPARATELY CLAIMED DEDUCTION TOWARDS BAD DEBT OF RS. 15,55,428/- AGAINST THESE TWO PARTIES. THIS WAY THE SUBMISSION MADE BY THE APPELLANT DURING THE APPELLATE PROCEEDI NGS IS IN CONTRADICTION OF ITS OWN ACCOUNTING PRACTICE AS REFLECTED IN THE BOO KS OF ACCOUNTS AND DULY VERIFIED IN THE INCOME-TAX RETURN. SECONDLY, THE AP PELLANT HAS NOT FURNISHED ANY EVIDENCE THAT M/S. BLUE FOOD PVT. LTD. AND M/S. TAILOR POINT PVT. LTD. HAS AGREED TO SET OFF THEIR DEBIT BALANCE AGAINST C REDIT BALANCE. THIRDLY THERE IS NO EVIDENCE AVAILABLE ON RECORD THAT SUCH ADJUST MENT OF-DEBIT BALANCES AND CREDIT BALANCES HAS BEEN MADE BY THE APPELLANT DURI NG THE REGULAR COURSE OF BUSINESS. IN FACT THE EVIDENCES AVAILABLE ON RECORD INDICATE THAT BOTH THE DEBIT BALANCE AND CREDIT BALANCES IN THE CASE OF THESE TW O PARTIES WERE MAINTAINED SEPARATELY BY THE APPELLANT. IN VIEW OF THIS, THE A PPELLANTS CONTENTION IS NOT ACCEPTABLE. THE ALLOWANCE OF BAD DEBTS OF RS.15,55, 428/- IN RESPECT OF DEBIT BALANCE OF M/S. BLUE FOOD PVT. LTD. AND TAILOR POIN T PVT. LTD, IS TO BE EXAMINED AS PER THE PROVISIONS OF SEC.36(1 )(VII). TO CLAIM EXPENSES AS BAD DEBT THE APPELLANT HAS TO FULFILL FOUR CONDITIONS A ND THE SAME HAS BEEN MENTIONED IN PARA 4,3 OF THIS ORDER. THE APPELLANT HAS MADE A FRANCHISE DEPOSIT OF RS. 15,00,000/- WITH M/S. BLUE FOOD PVT LTD. SINCE IT IS A SECURITY DEPOSIT, IT IS CAPITAL IN NATURE AND NOT REVENUE. S ECONDLY, INCOME AGAINST THE PROPOSED BAD DEBT WRITTEN OFF OF RS. 15,00,000/- WA S NEVER DECLARED AS INCOME IN THE P & L A7C. OF THE APPELLANT ON ANY EA RLIER OCCASION. THIS WAY THE BASIC ELIGIBILITY CRITERION OF SECTION 36(1)(II I) ARE NOT FULFILLED AND I HOLD THAT APPELLANT IS NOT ENTITLED TO CLAIM THE EXPENDI TURE AGAINST THIS BAD DEBT. 4.7 AS FAR AS TDS RECEIVABLE OF RS. 55,428/- FRO M TAILOR POINT PVT LTD. IS CONCERNED THE SAME IS ALSO A BALANCE SHEET ENTRY. I T HAS NEVER BEEN ROUTED THROUGH THE P & L ACCOUNT. THIS WAY THE BASIC ELIGI BILITY CRITERION OF SEC.36(1 )(VII) ARE NOT FULFILLED IN THIS CASE ALSO . IN VIEW OF ABOVE, IN THIS CASE ALSO THE APPELLANT IS NOT ELIGIBLE TO CLAIM DEDUCTI ON U/S.36(1)(VII). 4.8. IN VIEW OF ABOVE FACTS, DISALLOWANCE OF RS.25 ,55,428/- MADE BY THE AO AGAINST BAD DEBT WRITTEN OFF IS CONFIRMED. THIS GR OUND OF APPEAL IS DISMISSED. 10. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE A SSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 11. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE LD. ITA NOS. 1853 & 1960/AHD/2012 ASSESSEE -PREMIUM RESTAURANT PVT LTD AY : 2009-10 8 COUNSEL CONTENDED THAT THERE WERE REVENUE NATURE EX PENSES PAYABLE BY THE ASSESSEE TO THE PARTIES FROM WHOM THE WRITTEN OFF S UMS WERE RECEIVABLE. WE HAVE GONE THROUGH THE MATERIAL ON RECORD TROUGH THE ASSISTANCE OF THE REPRESENTATIVE BUT COULD NOT FIND THE ACCOUNTS AND DETAIL INDICATING THE NATURE OF EXPENSES PAYABLE BY THE ASSESSEE AGAINST THE WRITTEN OFF PAYMENT. WE FIND THAT THIS ASPECT WAS NOT VERIFIED AND EXAMI NED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WE, THEREFORE, SET ASIDE TH IS ISSUE ALSO TO THE FILE OF THE LD. ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, T HIS GROUND OF APPEAL OF ASSESSEE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 12. WITH REGARD TO REVENUES APPEAL, AS WE HAVE ALR EADY SET ASIDE THE ISSUE PERTAINING TO THE SALE OF PART OF THE ASSETS TO THE FILE OF THE LD. ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER T HE NECESSARY VERIFICATION AND EXAMINATION OF RELEVANT DETAILS AT THE LEVEL OF ASSESSING OFFICER AS MENTIONED ABOVE, THE ISSUE RAISED IN REVENUES APPE AL REGARDING THE SET OFF OF UNABSORBED BUSINESS LOSSES AGAINST THE SHORT TER M CAPITAL GAIN AS DECLARED U/S 50 OF THE ACT IS ALSO SET ASIDE TO THE FILE OF THE LD. ASSESSING OFFICER TO DECIDE THE SAME AFRESH IN ACCORDANCE WIT H LAW. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTI CAL PURPOSES. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE AS WELL AS REVENUE, BOTH ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 21 ST APRIL, 2017 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (AMARJIT SINGH) ACCOUNTANT MEMBER AHMEDABAD; DATED 21/04/2017 *BIJU T. ITA NOS. 1853 & 1960/AHD/2012 ASSESSEE -PREMIUM RESTAURANT PVT LTD AY : 2009-10 9 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD