IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No.1082/Bang/2024 Assessment year : 2020-21 Adarsh Developers, Vs. The Deputy Commissioner No.2/4, Langford Garden, of Income Tax, Richmond Town, Central Circle 2(1), Bangalore – 560 025. Bangalore.

PAN: AAGFA 3674G APPELLANT RESPONDENT ITA No.1160/Bang/2024 Assessment year : 2020-21 The Deputy Commissioner Adarsh Developers, of Income Tax, Vs. No.10, Vittal Malya Road, Central Circle 2(1), Bangalore – 560 001.

Bangalore. PAN: AAGFA 3674G APPELLANT RESPONDENT Assessee by : Shri Hemant Pai, CA Revenue by : Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru.

Date of hearing : 08.04.2025 Date of Pronouncement : 29.04.2025

O R D E R

Per Prashant Maharishi, Vice President

1. M/s Adarsh Developers (assessee) and The Deputy Commissioner of Income tax CIT, CC 1(2), Bangalore [The ld. AO ] has preferred cross appeal against the appellate order passed by the Commissioner of Income Tax (Appeals)-15, Bangalore [ld. CIT(A)] dated 30.3.2024 for AY 2020-21 wherein the appeal filed by the Assessee against the assessment order passed by the ld AO was partly allowed. Both the parties are aggrieved and are in appeal before us.

2. At the time of hearing, the ld. AR submits that in appeal of the assessee in ITA No.1082/Bang/2024 dispute has been settled under Vivad Se Vishwas Scheme, 2024 (VSVS) and Form 4 has also been issued on 25.1.2025 and therefore the appeal does not survive.

3. On examination of the above Form, it is correct that the dispute in appeal filed by the assessee has been settled and therefore ITA No.1082/Bang/2024 is dismissed as withdrawn.

4. Now only appeal in ITA No.1160/Bang/2024 filed by the ld. AO survives, wherein the appeal filed by the assessee against the assessment order passed by the AO u/s. 143(3) of the Act dated

20.9.2022 was partly allowed.

5. The grievance of the ld. AO is as per the following grounds of appeal:-

“1. Based on the facts and circumstances of the case, the learned CIT(A) was not correct in deleting the addition made by the AO

2. The CIT (A) erred in deleting the addition made on account of write off of Sundry Advances given to M/s Adarsh Reality and Hotels P Ltd (ARHPL) without appreciating the fact that the advances had not become bad as the advances was being regularly repaid by ARHPL and the outstanding was reducing year on year.

3. The CIT(A) erred in deleting the addition made on account of write off of Sundry Advances U/s 37 when the advances made related to capital advances given on account of transfer of land and licences to ARHPL by the assessee.

4. The CIT(A) erred in deleting the addition made on account of write off of sundry advances U/s 37 just on the ground that the advances were written off in the books of account which applicable only to trade receivables written off under section 36

5. The CIT(A) erred in deleting the addition made on account of write off of sundry advances on the ground that the amount written off is offered to tax by M/s ARHPL, when the same could/ not be offered to tax as per provisions of section 28 by M/s ARHPL

6. The brief facts of the case show that assessee is a partnership firm, engaged in the business of construction, filed its return of income on 15.2.2021 declaring total income of NIL. This return was processed u/s. 143(1) at Rs.11,54,94,482. Subsequently return was picked up for scrutiny for 6 reasons and notice u/s. 143(2) was issued on 29.6.2021. The assessment proceedings were concluded by passing the assessment order u/s. 143(3) of the Act on 20.9.2022 wherein the total income of the assessee was assessed at Rs. 489,90,33,206. Many additions/ disallowances were made by the ld. AO, however only dispute before us is concerning allowability of deduction on account of the write off of advances of Rs. 468,80,84,462. There were certain other additions/disallowances made to the total income of assessee, but same were not chal