2017 (10) TMI 1076

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..... advanced in the course of business which is a sine qua non for deductibility of the said amount as bad debt. However, so far as debits on account of interest charged on the said amount are concerned, as long as assessee can demonstrate that these interest debits, at the time of corresponding credit to interest income, were offered to tax, the assessee will be fully entitled to claim deduction in respect of the write off an income which never fructified. On this aspect of the matter, deem it fit and proper to remit the matter to the file of the Assessing Officer with a direction to allow deduction in respect of writing off interest debited to the account of M/s Contacts, in case the assessee can demonstrate that the corresponding interest in .....

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..... rst, of ₹ 11,155 in respect of Nandlal Arvind and Co; - second, of ₹ 1,014 in respect of Shrenikbhai Sheth Mehsana; and- third, of ₹ 14,95,279 in respect of M/s Contracts. The copies of accounts of these persons were duly furnished. It was noted that so far as M/s Contacts was concerned, the assessee had advanced ₹ 5,00,000 in the month of June 1998 and interest @ 24% pa was charged on the same till 2003-04 when the interest was scaled down to 18% pa, and finally, effective assessment year 2004-05, no interest was charged thereon at all. The interest income earned by the assessee was offered to tax from time to time. However, as the said concern was not traceable, eventually the amount outstanding was written off by .....

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..... t the said amount was advanced in the course of business which is a sine qua non for deductibility of the said amount as bad debt. However, so far as debits on account of interest charged on the said amount are concerned, as long as assessee can demonstrate that these interest debits, at the time of corresponding credit to interest income, were offered to tax, the assessee will be fully entitled to claim deduction in respect of the write off an income which never fructified. On this aspect of the matter, I deem it fit and proper to remit the matter to the file of the Assessing Officer with a direction to allow deduction in respect of writing off interest debited to the account of M/s Contacts, in case the assessee can demonstrate that the .....

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