Market value in lease deed for stamp duty is not unexplained investment u/s 69 absent ownership transfer; bad debt deduction u/s 36(1)(vii) requires only prior income inclusion and book write-off, not recovery proofs.

ORDER

PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER:

These two appeals filed by the Revenue against the separate orders passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre Delhi [hereafter “the Ld. CIT(A)] all dated 25.09.2025, DIN & order Nos. ITBA/NFAC/S/250/2025-26/1081151946(1) and ITBA/NFAC/S/250/2025-26/1081151474(1) for the Assessment Years 2022-23 and 2023-24 respectively.

2. The revenue has raised the following grounds of appeal inITA No. 2755/Kol/2025:

“1. Whether the Ld. CIT(A) erred in fact as well as in law by allowing the appeal of the assessee and by deleting addition of Rs. 2,77,75,360/- in violation of provision of Rule 464 of the Income Tax Rule, 1962 without appreciating the fact that in course of assessment proceedings, assessee failed to divulge that the impugned transaction was related to lease agreement and thereby failed to take the ground which was taken in course of appellate proceedings.

2. Whether the Ld. CIT(A) erred in fact as well as in law by allowing the appeal of the assessee and by deleting addition of Rs. 2,77,75,360/-in violation of provision of Rule 46A of the Income Tax Rule, 1962 without appreciating the fact that in course of assessment proceedings, assessee failed to produce the asset register for the relevant year and also failed to produce registered lease deed dated 13.08.2021 which were otherwise produced in course of appellate proceedings for the first time.

3. That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds hereinabove before or hearing of this appeal.”

2.1. The Revenue has raised the following grounds of appeal in ITA No.

2823/Kol/2025:

“1. Whether the Ld CIT(A) erred in fact as well as in law by deleting addition of Rs. 88.95 Cr. on account of Bad Debt written off solely on the basis of filing of list of debtors to that extent without appreciating the fact that sole list of debtors is not sufficient to prove that such "debt" was taken into account in computing the income of the assessee in an earlier year and as such does not satisfy the condition laid down in the provision of section 36(2) of the Act

2. Whether the Ld. CIT(A) erred in fact as well as in law by deleting addition of Rs 88.95 Cr. on account of Bad Debt written off solely on the basis of filing of list of debtors to that extent without appreciating the fact that the assessee company failed to furnish complete list of such debtors both in course of assessment proceedings as well as in course of appellate proceedings and as such failed to prove the veracity of such claim of bad debt.

3. That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds hereinabove before or hearing of this appeal.”

3. Briefly stated the facts of the case are that the assessee engaged in insurance business in the name and style of National Insurance Company Ltd. at Kolkata, West Bengal, filed its return of income on 19.10.2022 declaring loss of Rs. 15,46,35,94,616/-. Later on the case was selected for scrutiny and statutory notices were issued to the assessee. The assessee filed detailed written submissions and documents as per notice u/s 142(1) of the Act along with questionnaire. The AO made various additions against which the assessee filed appeal before the Ld.CIT(A). The Ld. CIT(A) partly allowed the appeal of the assessee. The main grievance raised by the Revenue before us against the deletion of unexplained investment towards purchase of immovable property u/s 69 of the Act as per para 9 of the assessment order of Rs. 2,77,75,360/-. The income tax department received i