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2011 (7) TMI 542 - HC - Income TaxDebts due from debtors - whether be treated as trading loss? - Held that:- As regards the disputed amount due from the debtors it represented rebates and discounts asked for by the parties - Case of MADRAS INDUSTRIAL INVESTMENT CORPORATION LIMITED v. C.I.T. [1997 (4) TMI 5 - SUPREME Court] and Section 37 enjoins that any expenditure not being expenditure of the nature described in sections 30 to 36 laid out or expended wholly and exclusively for the purposes of the business should be allowed in computing the income chargeable under the head 'profits and gains of business' - In sections 30 to 36, the expressions 'expenses incurred' as well as 'allowances and depreciation' have also been used - The Apex Court pointed out that the expression 'expenditure' as used in Section 37 of the Income Tax Act, 1961, cover an amount which is really a 'loss' even though the said amount has not gone out from the pocket of the assessee - Therefore, set aside the order of the Tribunal in this regard and direct the Tribunal to consider the claim of the assessee in respect of sum of Rs.4,75,307/- as to whether the said claim can be considered as a trading loss in the light of the decisions of the Apex Court.
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