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2011 (4) TMI 504 - AT - Income TaxLoss on sale of repossessed assets - The assessee is a non-banking financial company (NBFC) engaged inter alia in the business of auto finance, lease and hire purchase. - Held that:- Although the appellant company has used the nomenclature as "loss on Sale of Repossessed Assets" as provide under NBFC norms but the fact of the matter is that it is a "write off of bad debts." - When the customer makes default in payment of loan the vehicle is reprocessed and sold. - It is not a case of trading loss u/s 28 - Deduction claimed by the assessee was admissible u/s 36 of the Income-tax Act - Decided in favor of the assessee Regarding non-offer of interest income on sticky loans and advances - Accrual or receipt basis - It was submitted that the recovery of the loan and advance itself was in dispute or was doubtful and the assessee is an NBFC and has to follow the norms prescribed by the RBI - High Court in the case of CIT vs. Vasisth Chay Vyapar Ltd. (2010 -TMI - 202354 - Delhi High Court) has held that if in any enactment the provisions contained a non-obstante clause, that would override the provisions of the Income-tax Act and it was held that Section 45Q of RBI Act having a non-obstante clause will prevail over the Income-tax Act - An essential criterion for the recognition of revenue is that the consideration receivable for the sale of goods, the rendering of services or from the use of others of enterprise resources is reasonably determinable - Supreme Court itself has held that when there is a provision in other enactment which contains a non obstante clause, that would override the provisions of Income-tax Act - Decided in favor of the assessee Regarding advertisement and business promotion expenses - it was observed by the Assessing Officer that a major part of the expenses have been spent on advertisement in print and electronic media which directly contribute towards brand promotion which relates to Maruti Udyog Ltd - If any expenditure is incurred on the ground of commercial expediency, it shall be treated as normal business expenditure even if somebody other than the assessee is also benefited by the said expenditure - The genuineness and the actual incurrence of these expenditures have not been doubted by the Assessing Officer - According to the case law relied upon by the assessee before the CIT (A), it has been clearly laid down that if the expenditures are incurred for the purpose of business of the assessee and if incidentally those expenditure benefit the other party, then also no part of those expenditures could be disallowed on the ground that the assessee did not incur such expenditure wholly and exclusively for the purpose of its business - Decided in favor of the assessee
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