SIGN IN SUBSCRIBE

News Update

Cus - When there is nothing on record to show that appellant had connived with other three persons to import AA batteries under the guise of declaring goods as Calcium Carbonate, penalty imposed on appellant are set aside: HCCongress fields Rahul Gandhi from Rae Bareli and Kishori Lal Sharma from AmethiCus - The penalty imposed on assessee was set aside by Tribunal against which revenue is in appeal is far below the threshold limit fixed under Notification issued by CBDT, thus on the ground of monetary policy, revenue cannot proceed with this appeal: HCGST -Since both the SCNs and orders pertain to same tax period raising identical demand by two different officers of same jurisdiction, proceedings on SCNs are clubbed and shall be re-adjudicated by one proper officer: HCFormer Jharkhand HC Chief Justice, Justice Sanjaya Kumar Mishra appointed as President of GST TribunalSale of building constructed on leasehold land - GST implicationI-T - If assessee is not charging VAT paid on purchase of goods & services to its P&L account i.e., not claiming it as expenditure, there is no requirement to treat refund of such VAT as income: ITATBengal Governor restricts entry of State FM and local police into Raj BhawanI-T - Interest received u/s 28 of Land Acquisition Act 1894 awarded by Court is capital receipt being integral part of enhanced compensation and is exempt u/s 10(37): ITATCops flatten camps of protesting students at Columbia UnivI-T - No additions are permitted on account of bogus purchases, if evidence submitted on purchase going into export and further details provided of sellers remaining uncontroverted: ITATTurkey stops all trades with Israel over GazaI-T- Provisions of Section 56(2)(vii)(a) cannot be invoked, where a necessary condition of the money received without consideration by assessee, has not been fulfilled: ITATGirl students advised by Pak college to keep away from political eventsI-T- As per settled position in law, cooperative housing society can claim deduction u/s 80P, if interest is earned on deposit of own funds in nationalised banks: ITATApple reports lower revenue despite good start of the yearI-T- Since difference in valuation is minor, considering specific exclusion provision benefit is granted to assessee : ITATHome-grown tech of thermal camera transferred to IndustryI-T - Presumption u/s 292C would apply only to person proceeded u/s 153A and not for assessee u/s 153C: ITATECI asks parties to cease registering voters for beneficiary-oriented schemes under guise of surveys
 
I-T - Even if one of objects of assessee is to lend money, a single loan transaction is no business and hence, writing off bad debts is not allowable: ITAT

 

By TIOL News Service

CHENNAI, SEPT 03, 2018: THE ISSUE IS - Whether even though one of the company's objects includes money lending business but a single instant of loan cannot be acceptable as part of business and hence write off of bad debts cannot be allowed. YES IS THE ANSWER.

Facts of the case

The assessee company, publisher of newspaper and magazines, had filed return for relevant AY. One of the objects of the assessee company was to do money lending business. The assessee had granted advance of Rs. 1.60 Crores to one Mr. Sanjay Khemani during the FY 2000-01 against security of shares. The party had refunded a part of such amount by the end of the year 2001-02, and had also paid interest thereon. But the party did not refund any money after the year 2001- 02, and therefore the Board of the assessee decided to write off the loan as bad debt. During assessment, AO was of the view that only a trading debt could be written off. The assessee contended that since the loan given by the assessee fell within its objects, it could be only considered as a trading debt. But AO did not agreed and made disallowance of bad debts write off. On appeal, CIT(A) upheld the order of AO.

On appeal, Tribunal held that,

++ though assessee say that one of its objects is to carry on business of money lending, obviously, it was only one of the incidental and/or other object and not its main object. That apart, it was found that the loan given to Mr. Sanjay Khemani was the sole instance of a loan given to any person other than those who were not related to its main business assessee. Hence, assessee's claim that it had advanced loan to Mr.Sanjay Khemani as a part of its business is not acceptable. As for the judgment of the Apex Court in the case of M/s TRF Ltd., relied on by the AR their Lordships did not hold that conditions set out in sections.36(1)(vii) and Sec.36(2) were not required to be satisfied while effecting a write off of bad debts. Therefore, the lower authorities were justified disallowing claim as bad debt write off. No reason was found to interfere with the orders of the lower authorities. In the result, the appeal filed by the Revenue is allowed, whereas the Cross-Objection filed by the assessee is dismissed.

(See 2018-TIOL-1413-ITAT-MAD)


POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube
Shri N K Singh, recipient of TIOL FISCAL HERITAGE AWARD 2023, delivering his acceptance speech at Fiscal Awards event held on April 6, 2024 at Taj Mahal Hotel, New Delhi.

TOP NEWS

AR not Afar by SK Rahman

VISION 360



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.

TII LATEST

TIOLCORPLAWS LATEST