Bad Debts - Loans advanced to the Group Company utilized for ...

Income Tax

February 29, 2024

Bad Debts - Loans advanced to the Group Company utilized for purchase of properties and shares - The High court holds that it's not necessary for the assessee to establish that the debt went bad during the relevant previous year. If the assessee can demonstrate a bona fide belief that the debt had become bad and is written off accordingly, the claim should be allowed. - The High court concurs with the ITAT's finding that the nature and quality of the transaction, not just how it's recorded in the books, are crucial in determining its character. The fact that the transaction was recorded as a loan in the books does not negate its potential qualification as a bad debt.

View Source

← Previous Next →

Bad Debts - Loans advanced to the Group Company utilized for ...

Income Tax

February 29, 2024

You may also like:

Deemed dividend u/s 2(22)(e) - assessee is a major share holder in loan granting company - Advance given for purchase of property - The words “loans or advances”...

TDS u/s 194A - TDS on deemed dividend - loan advanced by the assessee company to the other group companies - Even if, the appellant company hold 100% shares in these...

Advances to subsidiary company – Allowability as bad debt – the loss of advance by the assessee company to its 100% subsidiary company is to be allowed as a business loss - AT

Claim of bad debts – advance given for purchase of capital assets are not allowable as bad debts/business loss - AT

Bad debts in respect of chit groups - Bad debts can be allowed to the extent of instalments defaulted by the prized subscribers and written off as bad debt - AT

Business loss or Bad Debts - written off of advances – advances given for material supply – held as business loss instead of bad debts - claim allowed - AT

Disallowance of Interest Expenses related to Interest free Advance/loan given to its subsidiary company - The loan advanced to subsidiary company is financed from...

Provision for bad and doubtful debts u/s 36(1)(viia) against the advances of rural branches - The circular mentions that the provisions of new clause (viia) of section...

TP Adjustment - associated enterprises (AEs) - Business advances cannot be construed as loan advanced to the assessee company. Once the same is excluded and the loans...

Deemed dividend u/s 2(22))e) - repayment of loan or advance by the Company

Bad debts - Advance given to Subsidiary Company for Job work - The subsidiary company was in absolute financial stringency and there was no possibility of any recovery...

Bad debts - Writing off of Loan to farmers - The treatment of the write-offs of such loans would then have to be viewed probably as bad debts, though this may not be...

Reduction of share capital - Even though the public shareholders/non promotor shareholders had objected to the reduction of share capital in the EGH but the majority...

Addition u/s.69 or 68 - assessee has paid on-money towards purchase of property to the seller - The assessee is only owner of 1/3rd share in the property purchased. -...

Speculation loss u/s 73 - it is apparent from computation that no part of the business of the assessee company consists of purchase and sale of the shares - Merely...

Quick Updates: