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Issues involved:
The judgment involves issues related to the deletion of bad debts written off and the treatment of expenditure incurred on renovation of electrical fittings. Deletion of Bad Debts Written Off: The Assessing Officer disallowed the claim of bad debt amounting to Rs. 3,63,31,432/- as the debts related to the years 2003 to 2006 when the web portals were run by the holding company. The assessee claimed eligibility for deduction as a successor to the business of the web portals acquired pursuant to a demerger, citing relevant case laws. The Ld. Commissioner of Income Tax (A) allowed the claim based on the precedent set by the Hon'ble Apex Court in similar cases. The ITAT affirmed the decision, stating that the case laws relied upon were applicable to the facts of the case, and hence, the claim of bad debt was allowed. Treatment of Expenditure on Renovation: The Assessing Officer disallowed the expenditure of Rs. 26,29,614/- incurred on renovation of electrical fittings as capital expenditure. The Ld. Commissioner of Income Tax (A) directed the Assessing Officer to treat the expenditure as revenue expenditure based on the argument that the expenses were incurred to create a better working environment and facilitate the company's operations without acquiring any enduring benefit. The ITAT remitted the issue back to the Assessing Officer to consider the ownership of the premises and make a finding denovo. In conclusion, the appeal filed by the Revenue was partly allowed for statistical purposes, with the ITAT affirming the decisions regarding the deletion of bad debts written off and remitting the issue of expenditure treatment back to the Assessing Officer for further consideration.
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