1996 (1) TMI 2 - SC - Income Tax

Held that in cases of sticky advances what could really be done is that on the assessee writing off the advances the same would become bad debt and could be so dealt by the assessee as permitted by the relevant section of the Income-tax Act 1961 - on the advances becoming bad debts refund of tax paid on the interest could be claimed by the assessee in accordance with law

Summary

The Supreme Court clarified that the observation regarding the refund of tax on interest in a previous judgment was incorrect. The Court stated that on advances becoming bad debts, the assessee can take steps in accordance with the provisions of the Income-tax Act related to bad debts. The applications were disposed of with this clarification.