S.K. Yadav, JM. - (1.) THESE appeals are preferred by the assessee as well as the revenue against the orders of the CIT (A) pertaining to the assessment years 1995-96 and 1996-97. Since common issues are involved in these appeals, these were heard together and being disposed of by this single consolidated order.
(2.) We have heard the rival submissions and carefully perused the orders of the authorities below and the documents placed on record. ITA No. 5725/Del/1998: This appeal is preferred by the assessee assailing the order of the CIT (A) on various grounds which are enumerated hereunder: "(1) That on the facts and circumstances of the case and in law the CIT (A) erred in sustaining the disallowance of the sum of Rs. 1,59,275 written off in the account of Shri H.C. Kohli. (2) That on the facts and circumstances of the case and in law the CIT (A) erred in confirming the disallowance out of travel expenses incurred on trip of Mrs. Naveen Kohli to Singapore. (3) That on the facts and circumstances of the case and in law the CIT (A) erred in confirming the action of the assessing officer in not excluding the sum of Rs. 1,56,699 from the total income on account of unclaimed balances written back in the profit and loss account. (4) That on the facts and circumstances of the case and in law the CIT (A) erred in not excluding from the total income the sum of Rs. 23,73,415 credited to the profit and loss account by way of provision no longer required written back towards unrealized profit for earlier year which was added back in the assessment year 1994-95 and instead restoring the matter to the assessing officer for passing a speaking order." During the course of hearing, the learned counsel for the assessee opted not to press ground No. 4. Accordingly, ground No. 4 is dismissed as not pressed.
(3.) APROPOS Ground No. 1, it is noticed from the break up of the written off sums that the major sum of Rs. 1,59,275 was an outstanding amount in the name of Shri H.C. Kohli, Ex-Director of the assessee company. In response to the query of the assessing officer as to how this amount would qualify as a business loss as this was in the nature of an advance to the Ex-Director of the company, it was submitted that the sum of Rs. 3.50 lakhs was advanced to Shri H.C. Kohli in March, 1987 as interest- free loan when he was a director of the company. This amount remained unpaid and meanwhile Shri H.C. Kohli resigned from the Board of directors of the company on 29-10-1988. The payment to the extent of Rs. 1,90,724.73 was recovered from Gujarat Hitech Limited owned by Shri H.C. Kohli and the balance amount of Rs. 1,59,275.27 remained unpaid which was written off in the assessment year 1995-96. The learned lower authorities did not find any business need of advancing this loan to Shri H.C. Kohli and they did not consider it to be a business loss. The CIT (A), accordingly confirmed the disallowance of this claim of the assessee.;