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TMI Blog2016 (3) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... f our directions and observations as above, after giving yet another opportunity of hearing to the assessee on this point, in accordance with the law and by way of a speaking order. We direct so.- Decided in favour of assessee Admissibility of deduction in respect of debts written off - Held that:- So far as the onus, of proving that amounts have actually become bad and unrecoverable, is concerned, the matter is now settled, in favour of the assessee, by Hon'ble Supreme Court in the case of TRF Limited vs. CIT [2010 (2) TMI 211 - SUPREME COURT]. As long as the assessee has actually written off the debts, which is not even in dispute before us, the assessee is eligible for deduction under section 36(1)(iii). That leaves us with only two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LHI High Court), suffice to say that the short issue in that case was whether fee for enhancing share capital can indeed be amortised under section 35D(2)(iii) and that is not even the claim of the assessee before us. - Decided in favour of assessee - ITA No. 3624/Mum/2002, ITA No. 3541/Mum/2002 - - - Dated:- 29-2-2016 - Pramod Kumar, AM And Pawan Singh, JM For the Appellant : Alok Johri For the Respondent : Hiro Rai ORDER Per Pramod Kumar AM, 1. These cross appeals challenge correctness of the learned CIT(A)'s order dated 8th February, 2002, in the matter of assessment under section 143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for the Assessment Year 1998-99. These appeals were disposed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure related to the same is capital in nature . 2. We will take up these grounds of appeal one by one. 3. As regards ground of appeal no.6, filed by the assesse, is concerned, it is directed against the disallowance of ₹ 87,58,803/- as prior year's expenses. 4. So far as this grievance of the assessee is concerned, only a few undisputed material facts need to be taken note of. This amount of ₹ 87,53,803/- represents the expenditure incurred by a part of expenses on advertisements given in the newspapers. While these advertisements were carried during the financial year 1996-97, the assessee claimed the expenses as deduction in the financial year 1997-98 i.e. period relevant to the assessment year before us now. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvations as above, after giving yet another opportunity of hearing to the assessee on this point, in accordance with the law and by way of a speaking order. We direct so. 7. Ground no.6 of the assessee is thus allowed for statistical purposes. 8. Coming to ground no.10 of the assessee i.e. with respect to admissibility of deduction in respect of debts written off to the extent of ₹ 81,31,389/-. Out of this amount of ₹ 81,31,389/-, bad debts amounted to ₹ 68,49,376/- but the same has not been allowed as deduction as the assessee failed to prove that these debts have become bad during the relevant previous year. This write off included ₹ 12,00,000/- which represented amount of advance of ₹ 12,00,000/- to M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of business and the amounts have actually become bad and recoverable. Such being the undisputed facts, in our considered view, the loss being incidental to carrying on the business, the assessee is entitled to deduction of these amounts as business loss. In view of these discussions, the assessee's grievance against the disallowance of ₹ 81,31,389/- is upheld. 11. Ground no.10 is thus allowed. 12. We now take up ground no.6 of the Assessing Officer i.e. grievance against disallowance of Rs.53,74,474/-, being 1/10th of ₹ 5,37,44,740/- incurred by the assessee on Global Depository Receipts, without appreciating that the GDR is nothing but increase in the capital and expenses relating to the same is capital in na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/10th expenditure on this account has already been allowed by the A.O. in the A.Y. 97-98 as because, this expenditure was incurred in F.Y. 96-97 relevant to A.Y. 97-98. They have further submitted that the company has issued shares in the international market which have been purchased by the persons of various countries abroad. They have, therefore, submitted that this claim is covered under the provisions of section 35D of the I.T. Act and on that basis, 1/10th portion has been claimed as expenditure for each assessment year. 18.1 Considering the facts and arguments of the case, I am also of the view that this is the expenditure covered by the provisions of section 35D of the Act, and, therefore, as per the provisions of that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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