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2012 (8) TMI 82 - AT - Income TaxAllowability of deduction in respect of write off of advances - assessee had participated in promotion of EECL, in order to safeguard its business of explosives and detonators in West Bengal – Held that:- Advances made by the assessee to EECL is incidental to carrying on the business by the assessee itself and consequently, the borrowed money should be considered as having been utilized for the purpose of business of the assessee - advances, thus, having been made in the normal course of business of the assessee, when written off, have to be held as falling in the revenue field, and consequently, such amounts of advances written off, are allowable as deduction either as bad debt or as business loss, incidental to carrying on the business by the assessee – In favor of assessee Deduction in respect of amount advanced to a sick company – Held that:- There is only the order of BIFR to wind up the EECL, but the EECL has not been actually would up by that date - Loss on account of investment in the shares of EECL cannot be considered in the year under appeal, and the same can be considered only in the year in which the EECL has actually been wound up or the rights of the shareholders are extinguished Expenditure in R&D - assessee had an approved R&D Unit, approved by the Government, even though the approval for the current year was not produced – Held that:- question whether any part of the expenditure claimed, constituted the expenditure on scientific research or not, has to be referred to the prescribed authority, in terms of Explanation below the provisions of S.35(1) of the Act - issue is remitted back to the file of the assessing officer - assessee’s appeal is partly allowed.
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