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TMI Blog2012 (6) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... , which was subsequently not recovered is a business loss and thus allowable as revenue expenditure - Decided in favor of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... e technology." The assessee has further submitted before the Assessing Officer that "it had invested the amount with M/s.Shankar Applied Technologies Pvt. Ltd. for their joint venture." The D.R. submitted that the amount invested by the assessee, in view of the above submissions of the assessee, is investment. The terms used by the assessee such as 'development', 'investment' in the submissions clearly indicate the intention of the assessee to make investment with M/s.Shankar Applied Technologies Pvt. Ltd. Thus, any loss on account of investment cannot be written off as bad debts. At the most, the assessee can claim capital loss. To support his contentions, he relied on the judgement passed by the Hon'ble Delhi High Court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er would show that the assessee in his written submissions has taken a categoric stand before the Assessing Officer that an amount of ₹ 15.00 lakhs has been advanced by the assessee to M/s.Shankar Applied Technologies Pvt. Ltd. to develop the product and also that once the product is developed it can earn revenue out of marketing of that product as early as possible. The Assessing Officer however, ignored the submissions made by the assessee and has proceeded to treat the loss suffered by the assessee on account of nonrecovery of ₹ 15 lakhs as capital loss. 7. On appeal, the CIT(A) after hearing the submissions of both the parties has held as under:- "3.4 Further the Assistant Commissioner has proceeded to disallow on the sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of investment is discussed in the said agreement. Accordingly, in line with the principle of substance over form, the said amount has been paid for furthering the interest of the business of the Appellant company only and will not thus partake the character of investments and thus the aspect of Capital Loss, as concluded by the Assessing Officer is not correct. 3.5 On the basis of above analysis, I hold, that the action of the Assessing Officer in adding a sum of ₹ 15 lakhs being the advance made to M/s. Shankar Applied Tech. (P) Ltd. is not justified. Consequently, I allow the claim of sums totaling ₹ 15 lakhs in the computation of total income for the assessment year 2005-06 in the total acceptance of the Grounds of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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