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2012 (8) TMI 160 - HC - Income TaxDenial of claim of loss - advance given for supply of chlorine gas cylinders - supplier went into liquidation - Held that:- To allow the claim of loss as desired by assessee it is required to whether an expenditure is on the capital account or on revenue - whether the unrecoverable advances given to Supplier were in order to secure a capital advantage and thereby create an asset of enduring nature or if it was in the normal course of business for acquiring stock in trade no factual material about the life of the cylinders, the number of times they are used, and the average time they are held before their replacement by the assessee has been given - Undoubtedly, they are necessary to supply the finished product to the assessee’s customers yet, these facts by themselves are insufficient and not helpful for discerning a complete picture, essential to decide the main issue - matter is remanded back to the appropriate AO to ensure a just ascertainment of the nature of the expenditure incurred.
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